Tuition Waiver for Grad Students and Tax Bill

Thousands of graduate students...across the country fear that their tax bills will climb dramatically if a proposal to end exemptions for tuition benefits makes it into the tax overhaul legislation that Republicans hope to send to President Trump by Christmas. Budding anthropologists, historians, scientists, and engineers who receive tuition waivers for working as teachers or research assistants could soon see those benefits counted as income. If that happens, earning an advanced degree could become significantly more expensive, students and universities warn...

But the tax bill approved by the Republican-led House of Representatives, which aims at cutting taxes and simplifying the tax code, calls for ending the exemption on those tuition waivers. Under the plan, those discounts would be considered income for tax purposes, even though students never see that money in their bank accounts. The Senate, which approved its tax reform package early Saturday morning, did not touch the graduate tuition exemption. The House and Senate will now negotiate the final legislation...

Critics argue that universities could lower their tuitions, since many of them provide students with waivers anyway. Or universities could convert the tuition waivers into scholarships, which aren’t taxed...

Full story at http://www.bostonglobe.com/business/2017/12/04/tax-reform-fight-reaches-graduate-students/htZ6Z0TVJEUKco0JZdUuaK/story.html

Yours truly's uninformed guess is that the Senate version will prevail. But there is an oddity in the argument raised by the defenders of getting rid of the tuition waiver. The last paragraph above suggests that universities could easily do a work-around. But if that were so, the waiver elimination wouldn't raise any money since no grad students would in fact pay the extra tax. The rationale for eliminating the waiver is that it raises tax revenue, however. You can't have it both ways. A tax provision that is easily avoided can't raise revenue.