Ohio University students — particularly teaching assistants, research assistants and resident assistants — could face higher taxes and a more expensive education if the proposed GOP tax plan becomes law.
Currently, Americans in low- and middle-income tax brackets are eligible for up to $2,500 a year in student loan interest deductions. Under the proposed House legislation, that provision would no longer exist by 2018, meaning the cost of a college education could increase for many students.
It’s graduate students, however, would feel the brunt of the plan’s impact.
Under the plan, which passed through the House on Nov. 16, tuition waivers — typically provided to graduate student employees and resident assistants — would be taxed. Currently, graduate students only pay income taxes on their stipends.
According to a report released earlier this year by the OU Graduate Employee Organization, the minimum stipend for a graduate assistant at OU who works 15 to 20 hours a week is $7,200 per year. The organization is that amount.
As of 2012, nearly 55 percent of graduate students in the U.S. made about $20,000 or less, according to a report from the U.S. Department of Education. Nearly 87 percent had incomes of $50,000 or less.
An estimated 145,000 graduate students and 27,000 undergraduates, most of whom work as resident assistants, currently receive qualified tuition reductions, according to the College of University Professional Association for Human Resources.
The tax plan has drawn criticism from OU students and faculty.
Members of the OU Graduate Student Senate participated in a mass phone call event in early November during which they called elected officials, urging them to oppose the legislation.
“We would be paying double taxes, basically, and that’s kind of why we’re calling,” GSS Vice President for Legislative Affairs Zachary Watts said in a previous report. “We’re trying to make people understand that we don’t get paid a lot, so now you’re going to be asking us to pay the majority of our salaries in taxes.”
The OU Student Senate passed a bill at its Nov. 15 meeting opposing sections of the tax plan — specifically those that would tax tuition waivers, which Senate believes would adversely affect graduate students.
“Given the average stipend of a graduate or professional student, the proposed policy will lead to a situation where students can barely survive on their stipends,” the letter reads. “This will also make it difficult for universities to recruit graduate-professional students. Ultimately, this hinders the progress of research and innovation at these institutes of higher learning.”
OU President Duane Nellis issued a statement to students and faculty Nov. 13 that criticized the plan’s “detrimental” provisions affecting higher education. The current version of the plan, he wrote, would make college education more expensive for students and their families.
“It also would reduce our ability to provide quality education for economically disadvantaged students,” Nellis wrote. “The reforms contain changes that are financially detrimental to University employees.”
Nellis also shared his concerns with U.S. Rep. Pat Tiberi, R-Ohio, and Rep. Jim Renacci, R-Ohio, both of whom serve as delegation members on the House Ways and Means Committee. The congressmen are both vocal supporters of the tax plan.