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Lipinski Leads Effort to Oppose Tax Bill Provision That Would Raise Taxes Substantially on Graduate Students and Hurt Our Economic Future

Congressman Dan Lipinski (IL-3) is leading a bipartisan group of 42 colleagues in opposing a provision in the House version of the tax bill that would result in a significant tax increase on graduate students.  The current bill would eliminate the exclusion of “qualified tuition reductions” from taxable income.  The effect would be to tax the value of tuition waivers that graduate students receive in exchange for serving as teaching or research assistants during their course of study.  Tuition waivers are money that students never see, and by including it in their taxable income, some could see their tax bills double or worse. 

“The United States is one of the most innovative countries in the world thanks in no small part to our top-notch graduate education system,” said Rep. Lipinski in a letter to House and Senate Leaders.  “American graduate students go on to become top scientists, engineers, researchers, and leaders that generate many of the innovations that drive our economy.  The effect of this bill would be to make graduate school unaffordable for thousands of students, lowering the research output of our universities and starving us of our next generation of professors and scientists.”

The value of a tuition waiver can be significant.  For example, graduate school tuition at Duke University is typically over $50,000 per year.  Adding this amount to a student’s taxable income would have serious tax consequences.  With 55% of graduate students nationwide earning an adjusted gross income of $20,000 or less, and 87% earning $50,000 or less, they cannot afford a major increase in their tax burden.

Graduate Student Tuition Waiver Letter (12/12/1706:53 PMET )