The effects on American innovation would be devastating. The American Council on Education reports that 57 percent of waiver recipients are graduate students in science, technology, engineering and math disciplines. TCJA would decimate the population of American graduate students, and the impact on tech-related fields would be particularly dire. But we’re just two people out of hundreds of thousands of grad students who would be affected. If TCJA passes, my fiancé and I would be forced to drop out of grad school we could not afford to live in Cambridge on $46,000 a year.
Frankly, all Americans should be losing sleep over the unintended consequences of this misguided tax scheme. This keeps me awake at night - and not just because of the obvious personal finance issues. Under the new tax bill, our tuition waivers count as income, so instead of paying taxes on $77,436, we’d look like a couple who earns $177,436 each year, and face a tax bill of more than $30,000. Under the current tax system, about $7,500 of our income goes toward taxes.
If we were paying for our MIT classes, my fiancé and I would rack up $100,000 in tuition debt each year. (Of course, many Americans get by with far less TCJA would hurt them, too, by eliminating deductions for basics like student-loan interest and medical expenses.) That may sound like a lot, but cost-of-living calculators estimate that a single person needs $3,700 a month, after taxes, to live here in Cambridge, Mass. After we’re married in December, our gross combined income will be $77,436 a year. My fiancé - who is also an MIT grad student with an undergraduate degree from a public university - earns a $3,600 monthly stipend. In exchange for this effort, MIT pays me $2,853 per month, covers my health insurance and waives my tuition. Many of my peers also teach classes, grade homework assignments and coordinate workshops, in addition to their lab work and course loads. The effects of this ill-considered legislation aren’t hypothetical for me I’m one of tens of thousands of middle- and working-class grad students who would be forced to abandon their studies if this bill becomes law.Īs a graduate student at the Massachusetts Institute of Technology, I spend 60 to 80 hours a week conducting research, on top of the challenging course load that I take toward earning my degree.
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