Lessons From the Tax Bill Fight

In the weeks after Republicans in the U.S. House of Representatives proposed to tax graduate student tuition waivers, many students were stunned by the potential for a big tax bill and unsure about how to respond.

“We were approached by a lot of students who didn’t really know how to engage in the process,” said Brenna Lin, director of internal affairs for Student Advocates for Graduate Education (SAGE).

House GOP proposals would have stripped out a number of student benefits from the tax code, including the tax-free status of graduate students’ tuition waivers. But over the following weeks, SAGE and the larger National Association of Graduate-Professional Students directed that frustration into a furious campaign, with graduate students at the forefront, which helped win the removal of the tuition waiver provision from a final package Congress passed last month.

Grad students in exchange for work as teaching or research assistants typically receive a tuition waiver from their college. That doesn’t mean they actually see any more money in their pockets, but the House proposal would have treated those waivers as taxable income -- potentially making graduate education unaffordable for many students, higher ed organizations said.

Although they may have initially been caught off guard by the proposal, student groups organized call-in days and letter-writing campaigns and met personally with lawmakers and their staff. Professional higher ed lobby groups say the organizing by students themselves was likely key in winning the removal of those provisions from a final tax bill.

As the Senate inches toward an update of the federal law governing higher education, the graduate students’ campaign may provide something like a blueprint for higher ed groups as they think through how to wage legislative fights in the future. And their leadership on the tax reform fight could presage a larger role for student groups in the battle over a reauthorization of the Higher Education Act.

As they did with the tax bill, Republicans in the House rolled out their HEA proposal with zero input from Democrats and little chance for the public or interest groups to weigh in on the bill. And with markup of the House plan completed, focus will shift once again to discussions on the Senate side.

Response to Tax Reform

The tax proposal laid out by the House GOP on Nov. 2 put many student benefits squarely on the firing line.

The same day they were notified of the proposal, Sam Hernandez, director of legislative affairs at the National Association of Graduate-Professional Students, and Surya Aggarwal, the chair of the group’s advocacy board, formulated a strategy to push for its removal. Their strategy had two parts: national call days where members on campuses across the country would dial the offices of their members of Congress and a simultaneous social media campaign targeting members who hadn’t supported a change to the tuition waiver language.

Hernandez said the group was playing catch-up from the beginning of its advocacy efforts on the bill. Without an opportunity to weigh in before its release, graduate students had little chance of shaping what would emerge from markup weeks later, she said. Republicans, however, had for years discussed dropping the waiver.

“We knew it was going to come out of markup and wasn’t going to be a good situation for us. We needed it to be registered already with general members, not just on [the Ways and Means Committee],” Hernandez said. “It’s kind of like a warning shot, like, hey, we are mobilizing on this.”

After the first national call-in day, the group met with every GOP member of the Ways and Means Committee in person. And they began getting indications that the message was having an impact during conversations on Capitol Hill.

The message wasn’t just aimed at House members, Hernandez said. It was also for the Senate, where that chamber’s finance committee was in the midst of drafting its own tax reform package.

NAGPS continued with the call-in days and social media campaign every week for a month until the Senate plan was released. The association even hand-delivered a letter to each member of Congress -- a tactic that allowed Hernandez and the group’s leadership to meet directly with staff members and lawmakers themselves.

When the Senate released its version of a tax reform plan on Nov. 9 without the tax on tuition waivers, it was an early sign that those efforts were paying off. But the group kept the pressure on as the House and Senate drew closer to a vote on their respective tax bills over the following weeks. During the week of Thanksgiving, campus-level members made visits to the local offices of lawmakers to press them on the tax-free status of tuition waivers. And the group kept up the phone calls, getting assistance at points from organizers for the March for Science and from the Michael J. Fox Foundation.

The Political Backlash

Before student groups became involved in pushing back on the provision, the higher ed lobby had for years pressed Republican lawmakers not to repeal section 117(b) of the tax code. Steven Bloom, director of government affairs at the American Council on Education, said lawmakers didn’t understand the importance of the provision or the political backlash they would generate by attempting to eliminate it.

“I will say they got hit with a bucket of cold water by NAGPS and other groups about the importance of that provision to graduate students,” he said.

Bloom said it was impossible to know why the Senate decided to leave the proposal out of their plan. But pressure from graduate students -- who attracted a growing amount of media attention as the weeks passed -- likely played a part.

Beth Buehlmann, vice president of public policy and government affairs at the Council of Graduate Schools, said lobbying by both NAGPS and SAGE was effective because the efforts were so consistent. The council advised the student groups early in the process to work with graduate school deans and to stay on message. As a result, lawmakers and their staff members didn’t hear different concerns from student groups, college presidents and higher ed lobby groups.

By the time lawmakers were preparing for conference negotiations over a final bill, that message was being reflected in the words of members themselves. In a December letter to House leaders, Representative Pete Sessions, a Texas Republican, urged that the repeal of the tax-exempt tuition waivers be dropped, citing many of the same arguments used by higher ed groups.

Buehlmann said the story students themselves told also played a role in getting the graduate tax provision dropped.

“The students were able to provide that face, that picture of the personal impact,” she said.

The Next Legislative Battle

The tax bill fight revealed to the student groups, which before had operated mostly independently, the value of tapping into a network of national higher ed lobby groups and professional associations for intelligence on developments in Washington. Lin, a doctoral student in educational psychology at Texas A&M University, said that during the course of the campaign she connected with the government affairs staff from the American Psychological Association. Since the final tax legislation’s passage, SAGE has continued to communicate with APA and other professional academic organizations on topics like the reauthorization of the Higher Education Act.

“We’re trying to think of ways we can partner with other advocacy groups, because they’re already doing so much and they know more than we do about what’s coming down the line,” she said.

The House education and work-force committee last month completed a marathon markup of the PROSPER Act, their proposed HEA rewrite. The bill would make the biggest change to the financing of graduate student education since 2005. Where graduate students can now borrow an unlimited amount up to the cost of attendance, the provision would limit federal lending to graduate students to $28,500 annually.

Student advocates and graduate education groups, including the Council of Graduate Schools, have warned that those limits could shut many less privileged students out of graduate programs or force them to take out private loans with less generous benefits.

SAGE and NAGPS are making plans to weigh in as HEA discussions heat up and are paying special attention to proposals that affect graduate education. Hernandez said NAGPS, which was originally formed in response to a 1997 tax bill, has had regular discussions with larger higher ed lobby groups since the passage of the tax bill. And the organization continues to follow policy issues that affect its members, including Title IX, student loans and health insurance.

And HEA promises to be at the top of the agenda for higher education in D.C. this year. Senator Lamar Alexander, the Tennessee Republican who chairs the Senate education committee, has said reauthorizing the higher ed law is a top priority for 2018.

Bloom of ACE said groups like NAGPS had now built up an infrastructure that could be used in the future.

“I suspect they learned what platforms they can use and how they can best organize themselves,” he said.

Both graduate student groups found that they could be effective mobilizing large numbers of students to register their opinions, even if they don’t have the status of Beltway insiders. Hernandez said the biggest lesson of the tax bill fight was how effective their organization could be with little in the way of big-time lobbying power.

“We may not have unlimited monetary resources, but as graduate students we have unlimited talent,” she said. “We will mobilize around that and we will use our talents when called upon.”