If you dig just a little into every bill the GOP has put out over the last ten years, you’ll find one very simple principle: entrenchment of the upper class. Making Grad school harder for kids who don’t have parental financial support fits perfectly with everything else they have done.
Sickening, isn’t it?
Income is money or other valuables received for providing goods and services. If you don’t work for the school district then your receiving school vouchers is not income. If you don’t work for the fire department than receiving fire protection is not income.
In the grad student case, the students are being offered a job. In exchange for their work they are offered something of value, tuition waivers. Therefore the tuition waivers are income. If your employer offers school vouchers or fire protection as part of your compensation then it is income. Simple and easy to understand.
Actually it’s not quite that simple. Your mortgage or car loan bank writing off that debt constitutes taxable income to you. Despite the fact you’ve never worked for them providing goods or services.
You’ve certainly outlined the general logical accounting definition. But tax law is all about tacking arbitrary exceptions plus and minus onto the neat logical categories provided by ordinary accounting.
You may well be right that written-off mortgage balances and K-12 schooling logically *ought not *be taxable income. But one is and one isn’t under current law. And either could change to the opposite tax treatment at the whim of Congress.
Well, that definition (something received for providing goods and services) doesn’t seem right to me. Interest received from bonds you hold is considered income. Capital gains may be income, depending on the holding period. Social security is income, legal settlements may be depending on the circumstances, life insurance payments can be considered income if you don’t have an insurable interest in the life that’s insured. Debt that’s forgiven is considered income. What good or service did you provide in those cases?
On the other hand, my employer offers lots of benefits that are not considered income, including paying for most of my health insurance and big chunk of life insurance, none of which shows up as income for me.
And, for a long time, tuition waivers were not considered income.
I would argue that income is what the tax laws say it is. Tuition waivers may be income if that’s what the law says. Similarly, tuition vouchers could just as easily be considered income.
Moderator Note
TruCelt, political jabs are not permitted in General Questions. No warning issued, but don’t do this again.
Colibri
General Questions Moderator
I’m curious. Why are we assuming that the value of the services provided is commensurate with the amount of tuition? A university doesn’t say, “Let’s see, you’ll be teaching precisely one and five-eighths of an introductory-level course per semester, as the value of that work will exactly match the amount of your tuition.”
I’m not sure we are. In my industry we receive “imputed income” on our W2 for the difference between the discounted price we pay to buy our company’s products and the lowest price the company offers that product to the public at large.
The amount of “discount” that tuition waivers amount to versus the lowest retail price is certainly a computable number. It need not have any relationship to the effort of teaching.
IOW: some grad student get $10K worth of tuition discounts vs. discounted retail price, and he/she is paid $12K for the labor of teaching undergrads. That person’s total taxable compensation is therefore $22K.
Note I’m not advocating for taxation of tuition remission. I’m just explaining how the idea might be implemented within the existing structure of US income taxation.
We aren’t. Graduate assistants are paid a stipend for their services, and they also receive a waiver on tuition. In my son’s case, the tuition is much higher than the stipend he receives.
And a little checking shows that if they were combined and counted as income, it would be more than is earned by a full-time assistant professor in the same field.
Yeah, more like $30k and $20k. The actual pay depends a bit on cost of living.
I was just making up round numbers to give neliebly a concrete example of the concept. I should have made that more clear. Thanks for putting more realistic figures into the thread.
I know. I would point out that the wage is very low, but not unliveable if no family and frugal. A full time grad student is also officially a 20 hour job, but it’s salaried so usually more time is put in. The tuition is generally higher, YMMV.
I would say that if you son is of Cherokee, Caucasian, and Andorian ancestry, he is probably entitled to some pretty sweet scholarships. 
A lot of schools are putting caps on Andorian admittance nowadays.
That’s not universal, though. At the state university my daughter just got her grad degree from, students selected as TA’s get a stipend that’s applied toward tuition, and that’s it.
Most graduate students use a combination of grants, stipends/waivers, and loans. According to student loan hero, 40% of the $1 trillion student loan debt is used to finance graduate degrees. If lazybratsche’s figures are correct, and they certainly seem to be, this is an odd group to milk more tax money from, given the paltry $160 million revenue gained.
I don’t know how much tax revenue would be lost under the GOP plan in terms of income taxes, assuming many of those would-be grad students will end up with lesser-paying jobs than those they would have had if they could have afforded grad school. Or is the supposition that most students will simply assume even more debt?
I may misremember, it has been 30+ years, but weren’t tuition waivers taxed before?
My wife and I graduated law school in 86. We both had assistantships paying stipends and tuition waivers. She was a research assistant, I was a teaching assistant and had 2 research assistantships. All 3 of mine would’ve given me tuition waivers, but I just got 1. 
Did have 3 offices, tho! 
As I recall it, we paid taxes on our stipends, but not our waivers. But my vague recollection was that there was a change in the law such that the year after we graduated, tuition waivers were going to be taxed. Anyone have any memory/info on that? Of course, at that time, tuition was nowhere near what it is now. (I believe around $1300.)
Like I said, this might simply be misremembering, but if so, my wife and I both misremember the same thing.
There are grad students and then there are grad students. Re: tuition waivers we’re generally discussing students in terminal degree programs. This is *mostly *a different pool from the graduate students who might be taking out loans, who are typically in professional schools or just getting a master’s.
Now granted, when I was visiting programs I’d been accepted into, a chemistry PhD student at Emory with the typical full tuition waiver and stipend told me he was still taking out student loans “because I like to play golf.” So as always YMMV.
Thats kind of the way I see it also.
I remember they were also taxing generous insurance programs.
They sometimes pay property taxes and other city or local taxes especially since they depend on the city for fire and police.
Personally back when I was in college I wasnt so hot on the graduate teaching assistants anyways. They were given little or no teaching training and didnt do so well as teachers. Many could barely speak english. Being that they were working only for scholarships and basic stipends you really cant blame them for doing a weak job.
I would much rather colleges used actual salaried teachers in the classrooms.
Many collegea use adjuncts, who are people with doctorates, but get underpaid and no benefits but often that’s all that’s available in the current market.
One dirty secret about college level instruction is that even the full professors have almost no teaching training. Many have years of experience to know what works and what doesn’t, but most degree programs are for research first and teaching a distant second.