Graduate students raising support for taxing situation

Graduate student representatives from the University of
California Student Association and the National Association for
Graduate and Professional Students continue to build support for
current legislation on making academic fellowships tax exempt.

Hanish Rathod, vice president of external affairs of the
Graduate Student Association and member of UCSA, said that because
fellowships have increased relatively little in all departments,
tax exemption would provide immediate benefits to graduate
students.

“Fellowship money is granted to graduate students to
perform research, it does not grant us employee status for us to be
taxed,” he said.

Rathod said graduate students need to meet their everyday living
expenses in order to perform their research.

Those who advocate tax exemption say graduate students
contribute up to about $200 monthly to their federal income tax,
depending on the size of the fellowship.

According to the Department of Education, the average annual
cost of graduate school attendance is $26, 300. But the average
amount of aid received through academic fellowships and grants is
about $19, 521.

Some graduate students remain unaware of the national movement
to make fellowships tax exempt.

Along with his coursework and research, Richard Bielman, a
second-year medical student, said he did not know efforts were
underway to make fellowships exempt.

“Holding two jobs on the side, plus my academics and
research, keeps me busy. I had no clue this was a serious
issue,” he said.

Though UCSA and NAGPS continue to make progress in the national
movement for tax exemption, some graduate students with family
obligations oppose the idea.

Thoue Lee, a second-year dental student, said that being a
graduate student does not mean escaping the reality of paying
taxes.

“As a mom and wife, I feel that being taxed on fellowships
is a taste of real life and a real test of responsibility,”
she said.

Graduate students were not taxed on fellowships prior to 1986.
That year, in an attempt to restructure and simplify the tax code,
Congress made several changes, including removing tax exemption for
government stipends.

Republican Congressman John Lewis of Florida tried to overturn
parts of the changes in the code that related to graduate
students’ stipends. The measure he introduced was never voted
on by Congress.

Alik Widge, legislative coordinator of NAGPS, said that the
current measure 26 USC 117, the legislation that UCSA and NAGPS
support, applies a two-part system on taxing graduate students
through fellowships.

Widge said tuition and required fees are educational expenses,
and the portion of a fellowship that pays for them is exempt from
federal income tax. He said non-research expenses used from
fellowships are not exempt.

Supporters for tax exemption say that it would assist graduate
students in meeting their monthly financial expenses, such as rent
and utility bills.

“The majority of graduate students have trouble paying
their rent, and getting anywhere from $100 to $200 back could make
a big difference,” Widge said.

Alex Arteaga, director of legislative affairs of UCSA, said
students were met with strong support from both the House of
Representatives and the Senate.

“I am optimistic in that this bill will be introduced on
the floor,” he said.

For more information on the national movement towards fellowship
tax exemptions, visit www.nagps.org and www.ucsa.org.