If you are planning to pursue higher education in American universities or colleges, here is a sad news for you! In the latest, US House of Representatives has passed a tax bill that is possibly going to affect the Indian students studying in the USA. It has been found that the Tax Cuts and Jobs Act, Section 117(d)(5) of the current tax code, which is an essential provision for the students who are pursuing masters and doctorates and are not wealthy, has been revoked. The severity of this was explained by Erin Rousseau, in an opinion piece written for the The New York Times. In this opinion piece, Erin writes being a graduate student at MIT, to ensure that they are able to pursue their education, he and his peers work for 40 to 80 hours a week as classroom teachers and laboratory researchers. In return for their work, they are being provided with tuition waivers, which helps them to keep away from paying almost $50,000 every year. Under Section 117(d) (5), this is not counted as taxable income. But now, with this newly passed tax bill, their waivers will be taxed, which will, in turn, make their living impossible in the country.
Explaining the new development, Erin writes, an MIT graduate will have to pay taxes on $80,000 annual salary, when they actually earn $33,000 a year – which is an increase in their tax by $10,000 annually. Further, this newly passed tax bill will only affect the students who are not wealthy and have been doing extra work to pay their fees. With this, the students might have to leave the academia completely. Speaking to The Indian Express, Furqan Qamar, secretary general of Delhi-based Association of Indian Universities said that the researchers who are dependent on fellowships and scholarships are going to be the victims of this new tax bill- as they will have to pay tax and this will make pursuing education expensive and impossible.
Speaking to The Indian Express, Indian diplomats in Washington DC said that they are keeping an eye on the developments of the US Congress. Furthermore, they have engaged with American lawmakers and officials on these issues. They further said that they are assessing the impact of this tax bill on Indian students and are possibly trying to protect the interest of their students. However, coming to this newly passed tax bill and to what Eric thinks, this bill will decimate the competition at the universities as only wealthy students will be able to study.