Question

Hello deans,

Recently news has circulated that a draft tax code could, if implemented, remove the tuition waiver for grads, double our taxable income, and thereby increase our federal taxes two- to threefold. The November 6, 2017 Graduate School newsletter had one explanation for why this wouldn’t technically affect Cornell grads, but nonetheless I and many of my friends are worried.

It is unclear to me exactly how tuition write-offs function now, let alone how they’ll function under a new code. The bill is after all just a draft, and when—or if—it ever passes the results could be better or even worse for grads than currently reported.

Though right now it may not seem like it to the school’s lawyers, lawmakers have already shown willingness to target tuition waivers and the tax plan could still change in unexpected ways. My question is: If the worst happens and Cornell grads face an increased tax burden, will the Graduate School commit to increasing wages or decreasing tuition in order to provide stable take-home wages? To be clear: I am not asking whether you or your lawyers think it will happen, I am asking what the Graduate School will do if it happens.

Yours,
A worried grad

Response

Dear Worried Grad,

Thank you for your Ask a Dean question. 

As you note, U.S. Congressional discussions regarding tax reform legislation are quite fluid, and likely will be for the next several weeks. The House bill was marked up in committee last week, and the recently-introduced Senate bill is scheduled to be marked up this week. After passage on the floor of each chamber, if the two versions are different (and currently there are notable differences between the two bills), a conference committee will meet to reconcile differences before final consideration in Congress and eventual transmission to the President.

Because there are so many unknowns and uncertainties, the Graduate School is not at this point spending time analyzing possible procedure changes the university would make in response to the variety of hypothetical changes that may or may not occur in the tax code. Instead, we are devoting our efforts to working with Cornell’s government affairs office and others to actively work toward achieving tax code provisions that will support, rather than erode, graduate education nationwide.

Warm regards,

Barb

Barbara A. Knuth
Senior Vice Provost and Dean of the Graduate School