The recently passed House version of the tax bill decreases taxes for the 50 to 60 Iowans (most of whom are not farmers or small business owners) who pay estate taxes, but increases taxes for more than 3,000 ISU graduate students who receive tuition scholarships/waivers by treating those scholarships as earned income.

Perhaps Republican House members have forgotten, or never considered, the many reasons we, at a university of science and technology, need to encourage graduate studies. 

Here are just six reasons why this tax bill is harmful to graduate students and our university as a whole. 

1. We struggle NOW to recruit excellent graduate students. We need them for a strong future in research and development, which drives our economy.
2. Many graduate students planned on non-taxable tuition waivers in order to make ends meet. 
3. If students cannot earn a living wage for work that is vitally important to the future of the U.S., they will go to other countries to further their education.
4. Many students – particularly in engineering – come to graduate school from industry, motivated by a commitment to teaching because they believe they can better serve the public in that role. Why penalize idealistic students who want to contribute to the greater social good?
5. When faculty are awarded grants, the university charges what are called indirect costs to cover administrative and other operating costs of running the university. Indirect costs are typically over 50 percent of the total amount of the contract. Without graduate students, Iowa State will not have personnel to carry out the research work promised in grant applications, and will lose the substantial operating revenue grants provide. The loss will curtail professors’ research agendas, students’ research training, ISU’s research reputation and decrease our university budget.
6. Other countries are already ahead of the U.S. in their investments in research and development. Making graduate school unaffordable will put us behind in other technical areas and diminish our ability to compete.

The Senate version of the tax bill passed early Saturday morning with no hearings, no time to read it and many last-minute scribbled marginal comments. It does not make tuition scholarships taxable, but the outcome of reconciliation between the House and Senate versions is completely unpredictable. 

Both Iowa Senators said they support tuition scholarships remaining non-taxable, but neither has committed to that being a deal-breaker. In fact Chuck Grassley said clearly he’ll vote for the final bill that emerges even if it does make those scholarships taxable.

What do the senators’ votes say about their priorities?