GOP tax plan worries N.H. students, officials in higher education

  • In this photo taken Wednesday April 6, 2016 students walk past the historic Thompson Hall at the University of New Hampshire in Durham, N.H. The water system serving the University is among more than two dozen in New Hampshire that have exceeded the federal lead standard at least once in the last three years. (AP Photo/Jim Cole) Jim Cole

Monitor staff
Thursday, December 07, 2017

As congressional Republicans work out the differences between House and Senate versions of a sweeping tax reform bill, Nathaniel Stafford is bracing himself.

The Ph.D. candidate in the psychology department at the University of New Hampshire is one of millions of students who stand to lose if the congressional tax reform bill becomes law.

For his work as a teaching assistant – studying the neurobiology of stress – he gets a $20,000 stipend, and UNH also waives about $27,000 in tuition he would otherwise have to pay. Under the House’s version of the tax bill, that tuition waiver would count toward his taxable income.

Graduate stipends already make for meager living, Stafford said. But for him at least, it was worth it for the mentorship, research and career opportunities. Being taxed as if he were paid an extra $27,000 might have changed that calculus for him, and Stafford said he might have opted out of graduate school entirely.

“If we were to make $50,000 a year, it would be appropriate for us to be taxed on $50,000. But if we make half that – there’s no rationale to me that makes that argument logical or appropriate,” Stafford said. “I feel like it’s an absurd abuse of power, to be totally honest with you.”

UNH Financial Aid Director Joel Carstens said taxing tuition waivers would likely negatively impact enrollment, although it’s difficult to predict how much. It would also put graduate education out of the realm of possibility for lower-income students.

“I don’t know that it’s in the nation’s best interest to eliminate graduate school for an entire income strata,” he said.

More broadly, the House version of the tax bill eliminates the deduction for paying off student loan interest, up to $2,500 a year. The measure would be felt particularly acutely in New Hampshire, where college graduates have the highest average student debt load in the country. In 2015, 80,000 Granite Staters used the deduction, according to the New Hampshire College and University Council.

Writing in the Monitor earlier this month, Mike Vlacich, the president of the council, wrote that the House’s proposal would have “grave consequences for tens of thousands of New Hampshire households.”

“Put simply, it could push a college education out of reach for many who already have a hard enough time making ends meet,” he said.

Paying for college is already no easy feat. On average, college tuition increased about 8 percent per year, which is nearly triple the rate of inflation. An 8 percent year-over-year increase means the cost of college doubles every nine years, according to calculations from the College Board.

By most measures, the federal tax reform stands to make an expensive investment for students even more so.

Both tax plans would double the standard deduction for charitable donations. Nonprofits and schools have all warned this will mean far fewer Americans will itemize their deductions – and have an incentive to give, undercutting fundraising.

Both the House and Senate versions of the tax reform legislation would also tax endowment earnings of a certain size. The move would impact only a select number of private institutions with the biggest endowments in the country. Only one New Hampshire school – Dartmouth College – would be affected, according to an analysis by the Chronicle of Higher Education.

“Dartmouth is following closely the development of the proposed tax plan and evaluating possible impacts on the College, our students, and their families,” a spokeswoman for the school said Monday.

(Lola Duffort can be reached at 369-3321 or lduffort@cmonitor.com.)