Tuition waiver taxes unlikely to make it into final Tax Cuts and Jobs Act, admins say

Endowment returns tax nearly certain to stay, however

The Graduate Student Council’s meeting yesterday evening began with a Q&A on the Tax Cuts and Jobs Act with MIT Washington D.C. Director David Goldston, Chancellor Cynthia Barnhart PhD ’88, Vice Chancellor Ian Waitz, and Vice President and General Counsel Mark DiVincenzo. All members of the forum agreed that the post-reconciliation bill would most likely not include the portion of the bill taxing graduate student tuition waivers.

Goldston said that generally there was “reason for optimism about the graduate student tax” because it is only present in the House, not Senate, version of the bill.

In an email to The Tech, MIT political science professor Charles Stewart concurred that this section is “obviously mean-spirited, and the fact that the Senate took it out means that they will now look mean if they agree to putting it back in.”

However, "the tax on big university endowment returns is in both bills, so that’s pretty much guaranteed to stay," Stewart added. The forum members also echoed these concerns during the meeting.  

Goldston also applauded graduate students’ “enormously helpful and important efforts” against the bill. In an email to The Tech, GSC President Sarah Goodman stated that the GSC sent a team of four graduate students to D.C. to meet with senators and representatives last week and is continuously monitoring the bill. Students speaking out against the bill have also been profiled in NPR and Time and written op-eds in The New York Times and Deseret News.

However, Goldston emphasized that “anything can still happen” and reminded students to “keep the pressure on.” According to DiVincenzo, MIT is currently lobbying with various groups that represent higher education institutions, including the Association of American Universities, Association of Public Land Grant Universities, and the American Council of Education. President L. Rafael Reif has also been in contact with presidents of other universities.

Students had various suggestions during the meeting. One student suggested sharing their personal stories with legislators; another suggested contacting large tech companies that hire many MIT graduate students to lobby on their behalf. Both the GSC and the forum emphasized the importance of continuing to call representatives. Goldston suggested that students could also “get family to write and make phone calls…especially in red states.”

Along with continuing lobbying against the bill, the administration is preparing for the worst case scenario that graduate student tuition waivers will be taxed. DiVincenzo said that because this bill applies differently to different students, the administration is putting together profiles to measure the effect on individuals.

The administration is also trying to determine if they can recharacterize some of the funding for students’ tuitions. This would take advantage of the bill’s taxation of only qualified tuition reductions but not qualified scholarships. Asked if MIT could offset the tax by reducing graduate student tuition to nominally zero, Goldston replied, “Among other things, it is not clear this would be legally possible.”