Question about tuition waivers

rwmurphy
Posts: 3
Joined: Wed Feb 20, 2013 12:33 am

Question about tuition waivers

Postby rwmurphy » Thu Feb 21, 2013 3:34 pm

Hi all,

This is probably more directed towards people in admission committees, but here's the question:

Does a physics department actually pay for your tuition when you get accepted into grad school?

Example: I got an acceptance from Indiana stating that my package is worth ~50k, with ~27k going towards my tuition waiver since I would be an out of state student. Do they actually take that money from the physics department's budget? Or do they just boast those numbers to make it seem like I'm getting a lot more money than I actually am?

Any insight is helpful since I'm just curious.

twinb87
Posts: 35
Joined: Sun Jul 26, 2009 12:11 am

Re: Question about tuition waivers

Postby twinb87 » Thu Feb 21, 2013 6:40 pm

I believe where the money comes from depends on whether you are a teaching assistant or if you a research assistant. If you are a teaching assistant, you are working for the department in which case the department pays the tuition. If you are working for a professor as a research assistant, I believe the tuition comes out of their funds. I could be wrong about this and this may vary from school to school but I am pretty sure that's how things work where I am.

admissionprof
Posts: 364
Joined: Sat Feb 02, 2008 7:50 pm

Re: Question about tuition waivers

Postby admissionprof » Thu Feb 21, 2013 9:20 pm

twinb87 wrote:I believe where the money comes from depends on whether you are a teaching assistant or if you a research assistant. If you are a teaching assistant, you are working for the department in which case the department pays the tuition. If you are working for a professor as a research assistant, I believe the tuition comes out of their funds. I could be wrong about this and this may vary from school to school but I am pretty sure that's how things work where I am.



This is correct. Often, the graduate school waives the tuition for teaching assistants....or maybe the department pays the graduate school and the graduate school then reimburses the department There's a lot of funny money that way. Just subtract the 27K from the 50K to get the stipend -- it's a pretty shameless way to make an offer sound better. Of course, check to make sure the 27K isn't taxable (it shouldn't be, but check)

rwmurphy
Posts: 3
Joined: Wed Feb 20, 2013 12:33 am

Re: Question about tuition waivers

Postby rwmurphy » Thu Feb 21, 2013 10:06 pm

admissionprof wrote:
twinb87 wrote:I believe where the money comes from depends on whether you are a teaching assistant or if you a research assistant. If you are a teaching assistant, you are working for the department in which case the department pays the tuition. If you are working for a professor as a research assistant, I believe the tuition comes out of their funds. I could be wrong about this and this may vary from school to school but I am pretty sure that's how things work where I am.



This is correct. Often, the graduate school waives the tuition for teaching assistants....or maybe the department pays the graduate school and the graduate school then reimburses the department There's a lot of funny money that way. Just subtract the 27K from the 50K to get the stipend -- it's a pretty shameless way to make an offer sound better. Of course, check to make sure the 27K isn't taxable (it shouldn't be, but check)


No, I don't believe there were being disingenuous, they clearly stated that I got ~23k for my TA stipend (taxable) and the ~27k for my tuition waiver (nontaxable). I was just curious if they actually paid that 27k to the school from their budget or the graduate school just waives the tuition all together (aka no money changes hands).

astroprof
Posts: 95
Joined: Fri Feb 15, 2008 4:47 pm

Re: Question about tuition waivers

Postby astroprof » Fri Feb 22, 2013 11:19 am

The actual mechanism of the tuition waivers will vary by school. At my institution, the College of Arts and Sciences provides the funds for tuition "waivers" for all graduate student teaching assistants in their associated departments, but they expect to recoup those funds when students enroll in classes in those same departments. In this regard, it is "funny money" that leaves and returns to the same entity. However, if students choose to enroll in courses in other branches of the University (at, say, the Business School or Law School), then the money is no longer "funny," but represents actual real dollars that are leaving the College. This leads to only minor restrictions in course enrollments - for example, our graduate students cannot use their tuition waiver to apply to gym courses, whereas our undergraduate students often take 1-2 credits of martial arts or other such courses to pad their enrollment hours.

For students on an RA, the funds for the tuition "waiver" are charged to the research grant. For students at state schools, there are sometimes large differences in the associated costs for graduate student RAs depending on whether or not the grant is charged tuition at the "in-state" rate or the "out-of-state" rate. In particular, some schools have policies that make it nearly impossible for an international student to qualify for the in-state rate, and thus the admission requirements for international students are likely to be much more stringent than for domestic students, because international students will cost significantly more to support during their degree program. At other state schools, even domestic students cannot qualify for in-state rates if they moved to the state specifically to pursue further education. In any event, these tuition waivers do still represent real money that is transferred from one account to another (and, yes, could be spent on other things if the tuition was actually "waived").

Regardless of the mechanism, or the source, of the tuition waiver, you should not have to pay taxes on it (you will have to pay taxes on your stipend, though). As this can be particularly disconcerting when the tuition waiver is more than your stipend (as is often the case), it does not hurt to verify this fact with the graduate program before you accept an offer.

Lavabug
Posts: 66
Joined: Tue Mar 27, 2012 6:19 pm

Re: Question about tuition waivers

Postby Lavabug » Wed Apr 10, 2013 3:55 pm

admissionprof wrote:This is correct. Often, the graduate school waives the tuition for teaching assistants....or maybe the department pays the graduate school and the graduate school then reimburses the department There's a lot of funny money that way. Just subtract the 27K from the 50K to get the stipend -- it's a pretty shameless way to make an offer sound better. Of course, check to make sure the 27K isn't taxable (it shouldn't be, but check)

Is that right? I think 1 or 2 gradschool handbooks I've read suggested stipends were taxable. Can any grad students chime in? How does this situation change between US citizens, US permanent residents?

bfollinprm
Posts: 1197
Joined: Sat Nov 07, 2009 11:44 am

Re: Question about tuition waivers

Postby bfollinprm » Wed Apr 10, 2013 4:41 pm

The extra money is reportable to the IRS (it appears on the 1098-T (tuition payment form) as part of your stipend. On the same form, however, is the 'qualified' tuition charged. This includes all enrollment fees, but might not include such things as student insurance (which are covered by your tuition at some schools). You will not owe taxes on scholarship, stipends, or work study that covers qualified tuition. So, it's possible that some amount of the extra stipend is taxable, but definitely not all of it.

To be clear, it is possible (I'd say likely) the full difference between stipend awarded and qualified tuition charged is taxable, but it might not be. You need to ask a certified tax preparer. It's my understanding from several years of grad school (and speaking with several other grad students as well as my tax preparer) that this is a fairly ambiguous portion of the tax code. It's probably true that the IRS (and the school) means for the stipend (after tuition expenses) to be taxable in (almost) every circumstance, but, depending on the structure of the funding, in some cases it's not clear that the tax code actually requires taxes to be paid.




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