Bring back tax-exempt stipends | The Triangle

Bring back tax-exempt stipends

Joshua Samuels

The general image of a graduate student is rarely a positive one. Eating Ramen noodles, which I must say are anathema to me, and desperately taking your dates out to the cheapest possible restaurants in Philadelphia. Sure, we do not pay tuition. I, in fact, have no idea what the tuition rates are at Drexel, and I am most certain I do not want to know. Yes, we even get stipends each month to cover the cost of living, but let us take this fully into account. The typical graduate student stipend at Drexel is … actually, I have no answer. I just know the amount I get each month. But I also know that I make a different amount than other people in my department, and even different from people within my lab. There is no single, set amount. Surely, if a stipend is designed to cover the cost of living, and we all live in the same city, there should be some relative standard for monthly pay. Furthermore, I have started my third year as a doctoral student without once receiving a raise, while new incoming doctoral students make more than I do. We have a reverse pay scale where the newest make the most. I have tried to address this issue with Drexel University but have not made significant progress. In fact, it seemed to me that I had a better shot at changing national policy than I did at changing Drexel policy. And therein lays the rub.

Looking at my monthly stipend, I see a nice, even dollar amount reduced by three taxes. Yes, we are in America, and we pay taxes because I like roads, policemen, firemen and public libraries. But then I started to look a bit deeper at the taxation. The Pennsylvania state tax code makes an exemption for graduate students. Yes. Graduate students in Pennsylvania who are being paid to do work directly related to their thesis (i.e., doing research for your doctorate in biomedical engineering) are to pay zero state taxes. Go across the street to the University of Pennsylvania and find out that none of their graduate students in engineering pay any state income taxes. The same is true at Carnegie Mellon, Penn State and the University of Pittsburgh. Drexel unintentionally seems to have let around $600 of my yearly salary slip through the cracks on a categorical technicality, which I am hoping we can work together to correct. But $600 is not that much. The federal income tax is the big one.

Did you ever wonder why they call them “stipends?” I know I once got a stipend to do work over the summer during my undergrad, and it was tax-free. Stipends generally are, in fact, tax-free. Stipends represent work that is normally done by someone on a volunteer basis. They have them for religious organizations and for small research internships where you get one flat stipend for the work. This was the original intention of graduate student stipends. In 1986 Ronald Reagan signed the Tax Act of 1986, which declared that graduate student stipends would no longer be tax-exempt. Therefore most of the professors at Drexel who got their doctorate in the U.S. did not pay federal taxes on their stipends. I do not need to get all “99 percent-er” and “Occupy Drexel” on this matter, but most graduate students at Drexel, between the Philadelphia wage tax, state tax and federal tax are paying nearly 20-percent tax rates, which is higher than what most millionaires and billionaires pay. We are doing good, valuable work. We do not get performance-based pay. We never get raises. We are not in the same income position as all other working professionals. To tax us the same skews the system and does a detriment to this country as it struggles to get young men and women into graduate education programs. Is a few hundred dollars the difference between going to grad school and not for many students? Likely not but is the reinstatement of tax-exempt status of graduate student stipends a worthwhile cause? I think so. This is why I set up the national petition to reinstate the tax-exempt status of graduate student stipends at and why I intend to work with Drexel to ensure that those students who should not be paying Pennsylvania state tax are not losing out on money that the state has already decided we should keep. Thank you for supporting the cause.

Joshua Samuels is a Ph.D candidate in biomedical engineering. He can be reached at [email protected].