Fourth-year MIT grad student Ryan Hill lives cheaply on a $30,000 stipend from the university, sewing clothes for his baby and going without dental insurance. "It's been already very hard to just emotionally get through this time of life because we have to be so frugal," he tells NPR. The newly introduced House Republican tax plan could make it even harder. Nearly 150,000 grad students in the US receive reduced or waived tuition. Under the new tax plan, the tuition they're not paying—approximately $50,000 per year at MIT—would be taxed like income, potentially increasing the taxes paid by Hill and grad students like him by 400%. "I think we're all shocked," says fellow MIT grad student Tamar Oostrom. "It's absolutely crazy."
In an opinion piece for the Washington Post, Princeton grad student David Walsh says he'd be paying taxes on $80,000 of income despite only actually earning $32,000 from his stipend—effectively giving him a tax rate of 35%. Between state and federal taxes, a Notre Dame tax law expert tells the Harvard Crimson that Harvard students could end up spending half their annual stipend on taxes if the House tax plan passes. And that's not just potentially bad news for students. "Graduate students play a critical role ... in the US economy," Walsh writes. "The GOP tax plan ... would cripple that role." Economists say the plan could keep Americans from getting advanced degrees at a time when a better-educated workforce is most needed. "The government makes much more money if people have more education," a senior fellow at the Urban-Brookings Tax Policy Center tells NPR.