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PHILADELPHIA -- Olivia Harding holds academic accomplishments that her 10 siblings can look up to. Pursuing a doctorate in cell and molecular biology at an Ivy League institution, after all, is no casual feat.
But she remained “naïve” about finances, she said, until after she finished her undergraduate degree, when she started earning money through her stipend as a graduate student at the University of Pennsylvania.
Her undergraduate degree was financed by a combination of her parents' money and scholarships, and if she wants her siblings to have the same opportunities she’s had, she’s realized she’ll have to pitch for their education -- which makes her concerns about Republican-led tax reform all that more acute.
“It effectively doubles [what I’m taxed for], but it doesn’t change what I see in my bank account,” Harding said.
Harding was one of about 50 Penn students who gathered Wednesday to protest the tax plan passed in the House of Representatives, holding a “grade-in” in an administrative building on campus. After gathering outside, graduate students sat in the lobby of a building to demonstrate what they do on a daily basis and make their case to the university -- and those who might be watching in Washington -- for how valuable their work is.
Similar “work-ins,” grade-ins and rallies were scheduled around the country Wednesday as students protested the tax plan. Penn’s protest was organized by activists with its graduate student unionization campaign, which, like other unionization efforts at private universities, has been grappling to gain recognition from the university.
Doctoral students often work for relatively small stipends, but the upside for some of them is that their tuition is waived by their university. The House tax plan would count tuition waivers as taxable income, meaning that although Harding only earns about $32,000 a year from the stipend she receives from her work as a graduate student, she would be taxed as if she earned about double that, since her program’s tuition would be added into her income.
The tuition-waiver provisions only exist in the House plan, and graduate students gathered in protest took a break from their work to call Pat Toomey, the state’s Republican senator, urging him to keep the tuition waiver out of any final legislation. He’s expressed optimism on tax reform, though the future of the tuition-waiver taxes remains uncertain.
“Neither the House and Senate plan are finalized,” Toomey’s office said in a statement to Inside Higher Ed. “When looking at a tax reform package, it is important to remember that it extends beyond singular changes and deductions. So while both the House and the Senate plans adjust tax treatment for certain entities and eliminate certain deductions, they both also lower rates, double the standard deduction and increase the child tax credit, resulting in a net tax cut for millions of working-class and middle-income Pennsylvanians.”
The tuition-waiver taxes, however, remained a nonstarter for many of the graduate students at Penn.
“It makes graduate school prohibitively expensive for many graduate students, all but the most wealthy,” said Zach Smith, a doctoral candidate in political science and one of the organizers of the protest.
For Joseph Wuest, also a doctoral candidate in political science, the House tax plan is a “direct attack on higher ed and graduate student education.”
“While Penn will be hit really hard, and some people won’t be able to pay their bills here, the less affluent a university is and the less stipend a grad student is getting, it’s going to make it increasingly impossible for them to pursue their education,” Wuest said. “I budget for things pretty well, but I don’t know how I’m going to budget for thousands and thousands of extra dollars in taxes.”
A student at Harvard University told NPR that he already tries to save money by living in an attic, and a student at the University of Maryland told the public radio station that she has had to take out loans to cover things like rent and utilities.
“To put it simply, it will devastate many of us,” Kaylynne Glover, head of the University of Kentucky Graduate Congress, told the Lexington Herald Leader.
Penn President Amy Gutmann has spoken out against the tax plan, but students at Penn are hoping for more concrete promises of what the university will do if the tuition-waiver provision goes through.
“Graduate tuition waivers were one among many things that Penn said [it was] concerned about,” Smith said. “But they have not been willing to put anything in writing in terms of a plan to protect graduate students if these efforts succeed.”
Penn students suggested that the university could pledge to reduce the tuition charged and waived for graduate programs -- in an effort to decrease the amount students would be taxed for earning -- or to increase students’ stipends to help them overcome potentially increased tax burdens.
Penn spokesman Rob Ozio said that the university is still continuing to lobby against the bill.
“We share the students’ concerns and are actively working with legislators, our peers and higher education associations to address concerns across an array of proposals that would have a negative impact on higher education and Penn,” he said in an email. “We continue to encourage students to contact their members of Congress to express their concerns about these proposals.”
Whether tuition-waiver provisions from the House tax plan become law or not, Harding is hoping for some sort of assurance from Penn.
“It’s a very wealthy institution,” she said, adding that documents from the Paradise Papers leak reported by the International Consortium of Investigative Journalists showed that the university invested funds into offshore accounts located in tax havens.
“How about putting my tuition in offshore accounts so I don’t have to pay taxes on it?” Harding said.