The Republican tax reform plan in the U.S. House of Representatives has some members of Westminster College’s community concerned about the future of higher education and who can obtain a degree.
Among other things, the House’s tax plan would consider tuition waivers — which makes some students’ tuition tax free — as taxable income. That means many students could pay significantly higher taxes than they do now, which some argue could make it difficult for those from lower socio-economic backgrounds to obtain a degree.
“The reality is that it really looks like it’s an assault on higher education,” said Peter Ingle, an associate professor of education at Westminster.
The Senate passed a tax reform bill early Saturday morning 51-49 and have now started work on reconciling it with the House bill. Republicans say they will have a final proposal for President Donald Trump to sign before Christmas, according to The Washington Post.
Ingle said the new tax plan would not only affect students looking to pursue a graduate degree but also those who work for colleges and universities and receive free tuition for their dependents.
“This used to be money allocated to help students get through grad school that they were not going to be taxed on,” Ingle said. “Students used to count on that.”
Ingle said the plan, if passed, would limit the number of people considering higher education because they would need even more wealth to attend.
Calen Smith, a junior neuroscience major planning to attend a grad school, said he’s been seriously considering attending a program in Europe ever since he became familiar with the House’s tax reform proposal.
“There’s no way I would be able to afford grad school in the U.S with that system in place,” he said.
Smith’s plan throughout college was to attend graduate school, but he wasn’t expecting to pay for tuition while receiving his Ph.D. Because the stipend given to graduate students is barely enough to live on, graduate school in the U.S is not a viable option for him if the tuition itself is taxed, he said.
Katherine Fredrickson, a sophomore English major, said she would likely go straight into a career instead of graduate school —which would ultimately lead her to a lesser income —if the plan passed.
However, she said she was already planning on waiting several years to attend grad school because she can’t afford it right away.
“The new tax implementations would further deter me from pursuing a graduate degree,” she said.
Max White, a sophomore economics major, also said he is planning on attending graduate school but agreed the proposal creates a deterrent against entering higher education.
“To tax any stipend given to students will just push many away from opportunities of bettering their lives,” he said.
White said many students already struggle to pay for their undergraduate degree, so paying taxes on money received for certain graduate programs would likely create an even greater struggle.
But Brian Jorgensen, an associate professor of marketing who received his Ph.D. at UCLA, said people who want a specific degree are probably going to find a way to to do that — even if there are some adverse tax consequences.
“I would think for a lot of people, pursuing the career you want is enough to overcome the tax issues,” Jorgensen said.
If the plan is approved, students should consider what they plan to do with their education, he noted.
“Some of the careers with a Ph.D. will pay higher than others, so part of it is what you expect to be earning when you finish your degree,” Jorgensen said.
The years during a Ph.D. are not going to be high earning years, he said, which is already a big sacrifice. Determining if a graduate program is worth it based on earning potential is one option, but what the student ultimately wants to do career wise is more important, he said.