Republicons say, "Bye bye tuition exclusion - phased out by 2002

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Van

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Jul 9, 1997, 3:00:00 AM7/9/97
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In article <33ce932b...@news.infohwy.com>,
lawr...@arthes.com (Robert W Lawrence) wrote:
>
> xjv...@usa.net (Van) wrote:
>
> <>Buried in the republicons tax proposal is the following.
> <>
> <> (c) PHASEOUT OF EXCLUSION FOR QUALIFIED TUI-
> <>TION REDUCTIONS.
> <>
> <>Subsection (d) of section 117 is amended by redesignating the last
> <>paragraph as paragraph (4) and by adding at the end the following new
> <>paragraph:
> <>
> <>''(5) PHASEOUT OF EXCLUSION."
> <>''(A) TERMINATION."Paragraph (1) shall not apply to any qualified
> <>tuition reduction for any course of instruction beginning after De-
> <>cember 31, 2001.
> <>
> <>''(B) PHASEOUT.
> <>"The amount excludable from gross income under paragraph (1) for any
> <>course of instruction beginning in a calendar year after 1997 and
> <>before 2002 shall not exceed the applicable percentage (determined in
> <>accordance with the following table) for such calendar year of the
> <>amount which would be so excludable but for this subparagraph:
> <>In the case of The applicable calendar year: percentage is:
> <>
> <>1998 ........................... 80
> <>1999 ........................... 60
> <>2000 ........................... 40
> <>2001 ........................... 20.''
> <>
> <>
> <>Pay your taxes so the rich don't have to
>
> By what ratioanal to you contend that my tax dollars should be used to
> subsidze your education?

Maybe that an educated workforce benefits our entire culture? Maybe
that this bill would force some highly motivated people to drop out of
school? Maybe that enormously increasing taxes on the group that
barely ekes out an existence is really tacky and self serving.

BTW, the exemption for employer paid tuition assisstance is also on
the Republicons chopping block as they nickle and dime the tax code to
gin up money for things like raising the ineritance tax exemption to a
cool million and indexing capital gains.

I'm sure grad students living on a 9k or 10k a year stipend could
tell you better than I what folding the cost of their paid tuition
into their gross income would do to their taxes. Something to think
about the next time some smiling a@@hole says how the Republicon plan
is geared toward the lower incomes.

"We don't pay taxes, the little people pay taxes." - Leona Helmsly

Van
--

.
-----------------------------------------------------------
To live is to battle with trolls
in the vaults of heart and brain
To write: that is to sit
in judgement over one's self.

-Ibsen
------------------------------------------------------------


Michael Zarlenga

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Jul 10, 1997, 3:00:00 AM7/10/97
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Van (77j...@usa.net) wrote:
: Maybe that an educated workforce benefits our entire culture? Maybe

Many things benefit our culture.

It benefits our culture when people can afford their own retirement
without becoming a drain on taxpayers. Do you favor or oppose making
FICA voluntary, allowing for other, private retirement accounts?


: that this bill would force some highly motivated people to drop out of


: school? Maybe that enormously increasing taxes on the group that

I guess they weren't that motivated after all. Or is this another
Van-ism, like where you claim that voting on a Tuesday "forces" some
highly motivated citizens not to vote?


: barely ekes out an existence is really tacky and self serving.

The fellow who makes $10K in income and gets $10K per year in educa-
tional bennies will pay almost NO TAXES on that second $10K. What's
the tax brakcet for $20K in income?

The fellow who gets $50K and an additional $10K in edu. bennies will
pay taxes on that $10K.

Why are you trying to protect this loophole?

--
-- Mike Zarlenga
finger zarl...@conan.ids.net for PGP public key

"Government is like a fire. It is a dangerous servant and a
fearful master." George Washington.

Eleanor Rotthoff

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Jul 10, 1997, 3:00:00 AM7/10/97
to

77j...@usa.net (Van) wrote:

>BTW, the exemption for employer paid tuition assisstance is also on
>the Republicons chopping block as they nickle and dime the tax code to
>gin up money for things like raising the ineritance tax exemption to a
>cool million and indexing capital gains.

This kind of thing, folks, is exactly why we have an Internal Revenue
Code of 9,000+ pages which is impossible for any normal human being to
cope with. "We have to get rid of every one of those mean, evil,
special interest provisions in the tax code -- BUT NOT MINE!!"

Eleanor Rotthoff

Eleanor Rotthoff

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Jul 11, 1997, 3:00:00 AM7/11/97
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volt...@worldnet.att.net (Jim Kennemur) wrote:
>erot...@io.com (Eleanor Rotthoff) wrote:

>>This kind of thing, folks, is exactly why we have an Internal Revenue
>>Code of 9,000+ pages which is impossible for any normal human being to
>>cope with. "We have to get rid of every one of those mean, evil,
>>special interest provisions in the tax code -- BUT NOT MINE!!"

>But it sure keeps your job secure, doesn't it?

You betcha. I make a heck of a good living out of the idiocy of this
monstrous tax code which results from special interest pleadings
exactly like the one Van made to start the thread from which you
extracted this. They multiply faster than a particularly malignant
cancer while everyone in our society howls about "the power of the
special interests" while simultaneously howling to preserve their own
special interest tax breaks.

It's madness. If it's not stopped our entire system of taxation will
collapse completely, and the only way to stop it is to fundamentally
reform the entire tax code. I support reform, even though it would
probably cost me a lot of money. As long as people like you defend
the present system, however, I'll keep on making a good living. So
thanks for all your efforts to preserve and defend my income.

Eleanor Rotthoff

Van

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Jul 11, 1997, 3:00:00 AM7/11/97
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erot...@io.com wrote:
>
> 77j...@usa.net (Van) wrote:
>
> >BTW, the exemption for employer paid tuition assisstance is also on
> >the Republicons chopping block as they nickle and dime the tax code to
> >gin up money for things like raising the ineritance tax exemption to a
> >cool million and indexing capital gains.
>
> This kind of thing, folks, is exactly why we have an Internal Revenue
> Code of 9,000+ pages which is impossible for any normal human being to
> cope with. "We have to get rid of every one of those mean, evil,
> special interest provisions in the tax code -- BUT NOT MINE!!"

Oh, so the raising of taxes on grad student and on people who are
receiving tuition assistance from their employer is merely an
incidental byproduct, as the noble Republicons work at the thankless
task of streamlining the tax code. Yeh, right.

...and it has nothing to do with ginning up money for the cap gains or
inheritance tax cuts - though I would think if only streamlining was
the goal, counting capital gains as regular earned income would be
the way to go.

Van
--


> Eleanor Rotthoff

Van

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Jul 11, 1997, 3:00:00 AM7/11/97
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In article <5q1at7$4...@paperboy.ids.net>,


zarl...@conan.ids.net (Michael Zarlenga) wrote:
>
> Van (77j...@usa.net) wrote:
> : Maybe that an educated workforce benefits our entire culture? Maybe
>
> Many things benefit our culture.
>
> It benefits our culture when people can afford their own retirement
> without becoming a drain on taxpayers. Do you favor or oppose making
> FICA voluntary, allowing for other, private retirement accounts?

Everybody wants to get their hands on the FICA money. Done right, I
suppose there could be a transitional program with some money
allocated to a 401k type fund. Might stop some of the whining and
complaining, but I doubt it. If the people could save, they would
already have money in the market.

The way the markets have been behaving lately, everybody's got dollar
signs in their eyes looking for ways to cash in. Markets don't always
behave so well. Recissions are seasonal creatures. People who
guessed wrong and wound up with next to nothing would still have to be
taken care of. That's more what I see happening if FICA is gutted.

Funny how people want to tinker with systems when they seem to be
working well. Did you know that if no new budget proposal was enacted
and the economy kept going at its current pace, the budget would
balance by the end of next year?

> : that this bill would force some highly motivated people to drop out of
> : school? Maybe that enormously increasing taxes on the group that
>
> I guess they weren't that motivated after all.

And you pretend at times to understand statistics? Do you maintain
that eliminating the tax exemption for tuition assistance paid for by
employers or paid by colleges to grad students would have no effect?

> Or is this another
> Van-ism, like where you claim that voting on a Tuesday "forces" some
> highly motivated citizens not to vote?

Well, you bitch about low voter turnout but then want to set up
"hoops" people have to jump through to prove they measure up to what
you think is a proper level of patriotism. Social Darwinism is alive
and well, rattling around inside Zarleng's skull. Bootstraps and
guts is your answer to everything, eh Zarlenga?

> : barely ekes out an existence is really tacky and self serving.
>
> The fellow who makes $10K in income and gets $10K per year in educa-
> tional bennies will pay almost NO TAXES on that second $10K. What's
> the tax brakcet for $20K in income?

Under the current tax code, someone single and making a $10K stipend
or salary plus receiving 10K in tuition assitance from the college or
an employer would would pay $514 federal. Without the tuition
exemption, they would pay $2014. Also, I assume uncollected FICA
would be expected on the $10k for another $765 owed. Would
individual states then count the tuition as earned income? Probably,
but I won't pile on. The person in your example would owe $2265 more
than they would owe currently.

I know this must seem picayune to high roller like you, Zarlenga, but
squeezing an extra $189 per month out of $10,000 per year income would
mean real grief. People on a $10,000 per year income are on the
razors edge to begin with. What do you suggest they do - not eat?

> The fellow who gets $50K and an additional $10K in edu. bennies will
> pay taxes on that $10K.
>
> Why are you trying to protect this loophole?

It's not a loophole, it's sound policy. Things like the Gallo
amendment are loopholes.

> --
> -- Mike Zarlenga
> finger zarl...@conan.ids.net for PGP public key
>
> "Government is like a fire. It is a dangerous servant and a
> fearful master." George Washington.

Marc H. Pinsonneault

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Jul 11, 1997, 3:00:00 AM7/11/97
to

Van wrote:
>
> erot...@io.com wrote:
> >
> > 77j...@usa.net (Van) wrote:
> >
> > >BTW, the exemption for employer paid tuition assisstance is also on
> > >the Republicons chopping block as they nickle and dime the tax code to
> > >gin up money for things like raising the ineritance tax exemption to a
> > >cool million and indexing capital gains.
> >
> > This kind of thing, folks, is exactly why we have an Internal Revenue
> > Code of 9,000+ pages which is impossible for any normal human being to
> > cope with. "We have to get rid of every one of those mean, evil,
> > special interest provisions in the tax code -- BUT NOT MINE!!"

Elanor can't defend the GOP on this one. So she'll throw up a
smokescreen, lumping it in as just a "special interest" provision.
This way she can avoid confronting whether this is a good idea.

This won't fly.

This GOP provision is dead wrong. It is effectively the same as
taxing tuition scholarships and the tax subsidy on tuition at public
universities. If the Democrats try and milk taxes from new and
creative sources the GOP is up in arms about it. We've been hearing
story after story about the unfairness of it all.
But when the GOP does the same thing? Just a "special interest
provision". How disingenuous.

The USA is the world leader in basic science. We don't need to
discourage domestic students from careers in science.
This is a truly stupid idea that will have severe and negative
consequences for science in this country. All for peanuts in the
federal budget scheme of things. We don't have a lot of PhD scientists,
but they contribute a lot to the economy....

Marc Pinsonneault


>
> Oh, so the raising of taxes on grad student and on people who are
> receiving tuition assistance from their employer is merely an
> incidental byproduct, as the noble Republicons work at the thankless
> task of streamlining the tax code. Yeh, right.
>
> ...and it has nothing to do with ginning up money for the cap gains or
> inheritance tax cuts - though I would think if only streamlining was
> the goal, counting capital gains as regular earned income would be
> the way to go.
>
> Van
> --
>
> > Eleanor Rotthoff
>

> -----------------------------------------------------------
> To live is to battle with trolls
> in the vaults of heart and brain
> To write: that is to sit
> in judgement over one's self.
>
> -Ibsen
> ------------------------------------------------------------

--
Remove nospam to get true email address.

Eleanor Rotthoff

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Jul 15, 1997, 3:00:00 AM7/15/97
to

"Marc H. Pinsonneault" <pin...@tinsley.mps.ohio-state.nospam.edu>
>Van wrote:
>> erot...@io.com wrote:
>> > 77j...@usa.net (Van) wrote:

>> > >BTW, the exemption for employer paid tuition assisstance is also on
>> > >the Republicons chopping block as they nickle and dime the tax code to
>> > >gin up money for things like raising the ineritance tax exemption to a
>> > >cool million and indexing capital gains.

>> > This kind of thing, folks, is exactly why we have an Internal Revenue
>> > Code of 9,000+ pages which is impossible for any normal human being to
>> > cope with. "We have to get rid of every one of those mean, evil,
>> > special interest provisions in the tax code -- BUT NOT MINE!!"

> Elanor can't defend the GOP on this one. So she'll throw up a
>smokescreen, lumping it in as just a "special interest" provision.
>This way she can avoid confronting whether this is a good idea.

"Special interest tax break" -- a tax benefit available to only a
relatively small group of people which is not available to the public
at large. Now, let's look at what we're talking about in the proposed
change to Sec. 117(d) of the Code.

Contrary to what has been loudly screamed, the phase out of the
"qualified tuition reduction" has no impact whatsoever on any amount
that represents payment to a grad student for teaching, research or
other services rendered to the college. This exclusion doesn't apply
to that. So what does it apply to? Simple. Colleges and
universities frequently provide tuition waivers to employees, their
spouses and children. That's a really nice fringe benefit, and I'm
all for it. But why should it be tax free -- which means of course
that the parents of other college students are subsidizing it through
higher tuition costs for their kids and subsidizing it again through
the tax code while also trying to find the money for their own
student's tuition?

> This GOP provision is dead wrong. It is effectively the same as
>taxing tuition scholarships

All scholarships and fellowships are governed by Section 117 (b), not
Section 117 (d), and the former section is not being changed. The
only people who would be affected would be employees of colleges and
their families who receive free tuition as a (currently tax-free)
fringe benefit.

>and the tax subsidy on tuition at public universities. If the Democrats
>try and milk taxes from new and creative sources the GOP is up in
>arms about it. We've been hearing story after story about the
>unfairness of it all. But when the GOP does the same thing? Just
>a "special interest provision". How disingenuous.

What would you call a tax free benefit available only to employees of
colleges and universities and their families but not to students who
are paying their own tuition?

> The USA is the world leader in basic science. We don't need to
>discourage domestic students from careers in science.
>This is a truly stupid idea that will have severe and negative
>consequences for science in this country. All for peanuts in the
>federal budget scheme of things. We don't have a lot of PhD scientists,
>but they contribute a lot to the economy....

Well, I'm sure that you're now relieved to know that we will not be
decimating the ranks of our nation's future scientists -- unless of
course you think they all come from the children of college employees.

Eleanor Rotthoff

Van

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Jul 16, 1997, 3:00:00 AM7/16/97
to

erot...@io.com wrote:
>
> Now, let's look at what we're talking about in the proposed
> change to Sec. 117(d) of the Code.
>
> Contrary to what has been loudly screamed, the phase out of the
> "qualified tuition reduction" has no impact whatsoever on any amount
> that represents payment to a grad student for teaching, research or
> other services rendered to the college. This exclusion doesn't apply
> to that. So what does it apply to? Simple. Colleges and
> universities frequently provide tuition waivers to employees, their
> spouses and children. That's a really nice fringe benefit, and I'm
> all for it. But why should it be tax free -- which means of course
> that the parents of other college students are subsidizing it through
> higher tuition costs for their kids and subsidizing it again through
> the tax code while also trying to find the money for their own
> student's tuition?
>

> All scholarships and fellowships are governed by Section 117 (b), not
> Section 117 (d), and the former section is not being changed.

> The only people who would be affected would be employees of
> colleges and their families who receive free tuition as a
> (currently tax-free) fringe benefit.
>

> Well, I'm sure that you're now relieved to know that we will not be
> decimating the ranks of our nation's future scientists -- unless of
> course you think they all come from the children of college employees.

Cute. A total bald faced lie, but cute non the less.

> Eleanor Rotthoff

....er, uh, Eleanor, I don't think they are talking about the
*children* of college employees. They are are talking about the
employees, ie. TAs and RAs, both at undergrad and grad level that
receive tuition reductions. This (below) is the exclusion they are
taking the hatchet to. (117d)
--
117(d) Qualified tuition reduction

117(d)(1) In general

Gross income shall not include any qualified tuition reduction.

117(d)(2) Qualified tuition reduction

For purposes of this subsection, the term 'qualified tuition
reduction' means the amount of any reduction in tuition provided to
an employee of an organization described in section 170(b)(1)(A)(ii)
for the education (below the graduate level) at such
organization (or another organization described in section
170(b)(1)(A)(ii)) of -

(A) such employee, or

(B) any person treated as an employee (or whose use is treated as
an employee use) under the rules of section 132(f).

[...]
117(d)(5) Special rules for teaching and research assistants

In the case of the education of an individual who is a graduate
student at an educational organization described in section
170(b)(1)(A)(ii) and who is engaged in teaching or research activities
for such organization, paragraph (2) shall be applied as if
it did not contain the phrase '(below the graduate level)'.
----------

Nice try, you devious tricky lawyer type, you.

Van
--

Eleanor Rotthoff

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Jul 16, 1997, 3:00:00 AM7/16/97
to

77j...@usa.net (Van) wrote:
> erot...@io.com wrote:

>> Now, let's look at what we're talking about in the proposed
>> change to Sec. 117(d) of the Code.

>> Contrary to what has been loudly screamed, the phase out of the
>> "qualified tuition reduction" has no impact whatsoever on any amount
>> that represents payment to a grad student for teaching, research or
>> other services rendered to the college. This exclusion doesn't apply
>> to that. So what does it apply to? Simple. Colleges and
>> universities frequently provide tuition waivers to employees, their
>> spouses and children. That's a really nice fringe benefit, and I'm
>> all for it. But why should it be tax free -- which means of course
>> that the parents of other college students are subsidizing it through
>> higher tuition costs for their kids and subsidizing it again through
>> the tax code while also trying to find the money for their own
>> student's tuition?

>> All scholarships and fellowships are governed by Section 117 (b), not
>> Section 117 (d), and the former section is not being changed.

>> The only people who would be affected would be employees of
>> colleges and their families who receive free tuition as a
>> (currently tax-free) fringe benefit.

>Cute. A total bald faced lie, but cute non the less.

No, it isn't either cute or a lie. The tax code can be difficult to
follow. Read on.

>....er, uh, Eleanor, I don't think they are talking about the
>*children* of college employees. They are are talking about the
>employees, ie. TAs and RAs, both at undergrad and grad level that
>receive tuition reductions. This (below) is the exclusion they are
>taking the hatchet to. (117d)

>For purposes of this subsection, the term 'qualified tuition


>reduction' means the amount of any reduction in tuition provided to
>an employee of an organization described in section 170(b)(1)(A)(ii)
>for the education (below the graduate level) at such
>organization (or another organization described in section
>170(b)(1)(A)(ii)) of -
>
> (A) such employee, or
>
> (B) any person treated as an employee (or whose use is treated as
>an employee use) under the rules of section 132(f).

Here is the key reference which no one would pick up unless they are
accustomed to the constant insanity of the tax code. Section 132
(which governs the tax treatment of employee fringe benefits) defines
the term "employee" as including a whole group of people, including
retired employees, surviving spouses of employees, spouses and
dependent children of employees, etc. It is the tax-free status of
tuition waivers for this class of people which is being ended. Do you
think it should be retained?



>117(d)(5) Special rules for teaching and research assistants

>In the case of the education of an individual who is a graduate
>student at an educational organization described in section
>170(b)(1)(A)(ii) and who is engaged in teaching or research activities
>for such organization, paragraph (2) shall be applied as if
>it did not contain the phrase '(below the graduate level)'.

So the college or university merely redefines TA/RA assistance as a
"qualified scholarship or fellowship" under the terms of Section
117(b) which is not being affected at all. That will allow the
assistance to retain its tax-free status. Indeed, the school can
still grant tuition waivers to children of its employees if it wishes.
But that will be treated as income to the employee if the child is a
dependent. Do you think that is unreasonable? Can you make a case
for the proposition that a child of a professor should attend school
free without that free tuition being taxable as a fringe benefit to
the professor?

Eleanor Rotthoff

Van

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Jul 16, 1997, 3:00:00 AM7/16/97
to

erot...@io.com (Eleanor Rotthoff) banged out:

>So the college or university merely redefines TA/RA assistance as a
>"qualified scholarship or fellowship" under the terms of Section
>117(b) which is not being affected at all. That will allow the
>assistance to retain its tax-free status. Indeed, the school can
>still grant tuition waivers to children of its employees if it wishes.

...and if the colleges don't "redefine TA/RA and undergrad employee
tuition reductions as scholarships or fellowships? Are you sure this
redefining would be acceptable to the IRS? I'm not, and though you
make it sound soooo easy even the pols haven't picked up your spin,
Eleanor. Evidently is not as simple as you make it out to be.
----

Tax on Tuition Aid May Be Dropped

WASHINGTON (AP) -- House tax negotiators are proposing to drop a plan
to tax tuition assistance that colleges give graduate students.

The House tax bill would have required graduate students to add to
their taxable income the value of tuition discounts and similar
assistance they receive from colleges or their employers. Universities
around the country use such tuition discounts to recruit graduate
students.

House tax bargainers made a formal written offer to their Senate
counterparts to eliminate the proposed tax as part of the formal
opening round of tax negotiations Tuesday. The House and Senate are
working to resolve dozens of conflicting provisions in their
respective tax bills, which aim to provide a $135 billion tax cut over
five years.

A copy of the House offer was obtained by The Associated Press.

"We're going to fix that problem," a House Republican source said,
speaking on condition he wouldn't be identified further. "It was never
our intention to deny graduate students tax-favored treatment as a
result of their working."

The House report printed to accompany last month's passage of the bill
said the Ways and Means Committee believes that if the tax bill were
passed, "employees of educational organizations, like other taxpayers,
will enjoy the special education tax benefits relating to education
expenses, as well as expanded education savings opportunities
contained in the bill." Therefore, the tuition tax break would no
longer be necessary.

While the Senate hasn't formally accepted the House offer, the
graduate student provision is expected to be cleared up since the
Senate tax bill lacked similar language.

Such assistance is substantial in some colleges. The University of
Texas handed out about $9 million in such discounts to 1,400 graduate
students during the school year that just ended, The Austin
American-Statesman reported last month.

Last week, Democrats rallied a group of college students against
various provisions in the tax bill, including the graduate student
tuition provision.

"We will not stand to have education cut (to pay for) tax benefits for
corporations and wealthy individuals in this country," Sen. Edward
Kennedy, D-Mass., said.
--------------

>But that will be treated as income to the employee if the child is a
>dependent. Do you think that is unreasonable? Can you make a case
>for the proposition that a child of a professor should attend school
>free without that free tuition being taxable as a fringe benefit to
>the professor?

I can make a case that Eleanor takes the section of the tax code that
gives the exemption to TAs, RAs, and undergrad employees receiving
tuition reductions - pretends like that section of the code is a
loop-hole for well-off professors - and then calls for its abolishment
as if she were champion of the little guy, searching out waste, fraud,
and abuse by the wealthy. Feh.

Van
--

>Eleanor Rotthoff

Eleanor Rotthoff

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Jul 17, 1997, 3:00:00 AM7/17/97
to

77j...@usa.net (Van) wrote:
>erot...@io.com (Eleanor Rotthoff) banged out:

>>So the college or university merely redefines TA/RA assistance as a
>>"qualified scholarship or fellowship" under the terms of Section
>>117(b) which is not being affected at all. That will allow the
>>assistance to retain its tax-free status. Indeed, the school can
>>still grant tuition waivers to children of its employees if it wishes.

>>But that will be treated as income to the employee if the child is a
>>dependent. Do you think that is unreasonable? Can you make a case
>>for the proposition that a child of a professor should attend school
>>free without that free tuition being taxable as a fringe benefit to
>>the professor?

I merely note the absence of any answer to the question I posed.

>...and if the colleges don't "redefine TA/RA and undergrad employee
>tuition reductions as scholarships or fellowships?

TAs and RAs need to be sure that they do. I don't think this will be
a problem. The colleges have everything to gain and nothing to lose
by doing so.

>Are you sure this redefining would be acceptable to the IRS?

I can't see any reason why it wouldn't be. In fact, these are
legitimately characterized as scholarships or fellowships.

>I'm not, and though you make it sound soooo easy even
>the pols haven't picked up your spin, Eleanor.

It's not "spin," Van, it's simple fact based on an accurate reading of
the Internal Revenue Code. OTOH when did the politicos (with a very
few exceptions) have any real knowledge of what they have enacted into
the tax code?

>Evidently is not as simple as you make it out to be.

Actually, it is. There's just a large gap between policy and
politics.

>"We're going to fix that problem," a House Republican source said,
>speaking on condition he wouldn't be identified further. "It was never
>our intention to deny graduate students tax-favored treatment as a
>result of their working."

Which is entirely consistent with what I posted. The intent of the
revision was to end the tax-exempt status of a fringe benefit to
professors and other university employees, not to have any effect on
TAs and RAs. It would be easy to solve this problem legislatively
while still eliminating the tax loophole.

>>But that will be treated as income to the employee if the child is a
>>dependent. Do you think that is unreasonable? Can you make a case
>>for the proposition that a child of a professor should attend school
>>free without that free tuition being taxable as a fringe benefit to
>>the professor?

I note that Van does not elect to defend this special interest tax
provision except as it applies to TAs and RAs. Does that suggest to
us that he himself falls in the latter category? We all need to
remember the standard distinction between a deduction and a loophole
-- I can take the former, but not the latter.

>I can make a case that Eleanor takes the section of the tax code that
>gives the exemption to TAs, RAs, and undergrad employees receiving
>tuition reductions - pretends like that section of the code is a
>loop-hole for well-off professors

The fact is that it has been exactly that. There is no "pretense"
about it. OTOH, having accused me of lying about it, you're not about
to apologize now that you have discovered I'm right, are you?

> and then calls for its abolishment as if she were champion of the

>ittle guy, searching out waste, fraud, and abuse by the wealthy. Feh.

Contrary to your ideological prism, not all of the fraud, waste and
abuse is by the wealthy. As for me, I would prefer to eliminate *all*
of the special interest provisions in the code -- no matter who they
benefit.

Eleanor Rotthoff


Harold Brashears

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Jul 17, 1997, 3:00:00 AM7/17/97
to

On Thu, 17 Jul 1997 01:50:15 GMT, erot...@io.com (Eleanor Rotthoff)
wrote:

[edited]

>Contrary to your ideological prism, not all of the fraud, waste and
>abuse is by the wealthy. As for me, I would prefer to eliminate *all*
>of the special interest provisions in the code -- no matter who they
>benefit.

I don't know about other universities than USM, but it is my
understanding that graduate students do not now get a waiver of
tuition, they get instead "in state" fees. The situation was the same
at Kansas State, where I paid "in state" fees as a graduate student.
Of course, that was back in the dark ages.

Currently, I would be adversely affected by the law as written. While
an employee of the university I have been taking one to two classes
every semester, at a graduate level, primarily simply to satisfy my
own curiosities. I will either have to pay tax on these next year, or
audit the courses instead of enrolling, or take the watered down
undergraduate courses.

I will probably continue to take the graduate courses, since if I am
auditing a course I do not apply myself, and the undergraduate courses
are too elementary. Besides, I immensely enjoy the consternation of
the young whippersnappers when I get the better grades. But I have to
wonder about the many staff and secretarial personnel who are taking
graduate level courses, and cannot afford to pay the tax. They are
the ones hurt.

To my knowledge, relatives or family members of mine are not eligible
for any kind of tuition or fee waiver.

Regards, Harold
----------
It would be "a gross misuse of public
assets" for the government to use staff lawyers as a
"shield against the production of information relevant
to a federal criminal investigation."
--Appellate Court Ruling on White House Lawyers


HENRY E. KILPATRICK JR.

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Jul 17, 1997, 3:00:00 AM7/17/97
to

Harold Brashears (brshears@^SNIP^whale.st.usm.edu) wrote:
: On Thu, 17 Jul 1997 01:50:15 GMT, erot...@io.com (Eleanor Rotthoff)
: wrote:

: [edited]

: >Contrary to your ideological prism, not all of the fraud, waste and
: >abuse is by the wealthy. As for me, I would prefer to eliminate *all*
: >of the special interest provisions in the code -- no matter who they
: >benefit.

: I don't know about other universities than USM, but it is my
: understanding that graduate students do not now get a waiver of
: tuition, they get instead "in state" fees. The situation was the same
: at Kansas State, where I paid "in state" fees as a graduate student.
: Of course, that was back in the dark ages.

I get a waiver at GMU & I got a waiver at Penn State when I got my
master's degree back in the dark ages. Of course, now that I'm in my
dissertation stage, I'm only charged one tuition credit per semester
anyhow.


: Currently, I would be adversely affected by the law as written. While


: an employee of the university I have been taking one to two classes
: every semester, at a graduate level, primarily simply to satisfy my
: own curiosities. I will either have to pay tax on these next year, or
: audit the courses instead of enrolling, or take the watered down
: undergraduate courses.

: I will probably continue to take the graduate courses, since if I am
: auditing a course I do not apply myself, and the undergraduate courses
: are too elementary. Besides, I immensely enjoy the consternation of
: the young whippersnappers when I get the better grades. But I have to
: wonder about the many staff and secretarial personnel who are taking
: graduate level courses, and cannot afford to pay the tax. They are
: the ones hurt.

: To my knowledge, relatives or family members of mine are not eligible
: for any kind of tuition or fee waiver.


That's been the trend for years. At one time waivers for faculty members'
children was one of the fringe benefits, but more and more colleges have
taken it away as tuition has risen considerably.

: Regards, Harold


: ----------
: It would be "a gross misuse of public
: assets" for the government to use staff lawyers as a
: "shield against the production of information relevant
: to a federal criminal investigation."
: --Appellate Court Ruling on White House Lawyers


Speaking of White House lawyers, Hillary's lawyer is taking a month's
vacation - the first vacation he's had in years. I guess they realize
Starr can't gin up anything.

--
Buddy K

HENRY E. KILPATRICK JR.

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Jul 17, 1997, 3:00:00 AM7/17/97
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Eleanor Rotthoff (erot...@io.com) wrote:
: "Marc H. Pinsonneault" <pin...@tinsley.mps.ohio-state.nospam.edu>
: >Van wrote:
: >> erot...@io.com wrote:
: >> > 77j...@usa.net (Van) wrote:

: >> > >BTW, the exemption for employer paid tuition assisstance is also on
: >> > >the Republicons chopping block as they nickle and dime the tax code to
: >> > >gin up money for things like raising the ineritance tax exemption to a
: >> > >cool million and indexing capital gains.

: >> > This kind of thing, folks, is exactly why we have an Internal Revenue
: >> > Code of 9,000+ pages which is impossible for any normal human being to
: >> > cope with. "We have to get rid of every one of those mean, evil,

: >> > special interest provisions in the tax code -- BUT NOT MINE!!"

: > Elanor can't defend the GOP on this one. So she'll throw up a
: >smokescreen, lumping it in as just a "special interest" provision.
: >This way she can avoid confronting whether this is a good idea.

: "Special interest tax break" -- a tax benefit available to only a
: relatively small group of people which is not available to the public

: at large. Now, let's look at what we're talking about in the proposed


: change to Sec. 117(d) of the Code.

: Contrary to what has been loudly screamed, the phase out of the
: "qualified tuition reduction" has no impact whatsoever on any amount
: that represents payment to a grad student for teaching, research or
: other services rendered to the college. This exclusion doesn't apply
: to that. So what does it apply to? Simple. Colleges and
: universities frequently provide tuition waivers to employees, their
: spouses and children. That's a really nice fringe benefit, and I'm
: all for it. But why should it be tax free -- which means of course
: that the parents of other college students are subsidizing it through
: higher tuition costs for their kids and subsidizing it again through
: the tax code while also trying to find the money for their own
: student's tuition?

You know who gets tuition waivers? Graduate students who get low pay as
graduate assistants ($8,000-$10,000 for 20 hours a week for about 30
weeks with no benefits). Yes, they are employees of the university, but
they are hardly highly paid professors.

Tuition waivers for spouses and children of faculty are not as common as
they once were. This GOP tax increase is a great concern to graduate
students everywhere. Fortunately for me, I'm down to one hour per
semester while I write a dissertation & I have other sources of income, so
it's no big deal. For others, it's another expense to cut into their
already meager paychecks.


: > This GOP provision is dead wrong. It is effectively the same as
: >taxing tuition scholarships

: All scholarships and fellowships are governed by Section 117 (b), not


: Section 117 (d), and the former section is not being changed. The
: only people who would be affected would be employees of colleges and
: their families who receive free tuition as a (currently tax-free)
: fringe benefit.

: >and the tax subsidy on tuition at public universities. If the Democrats

: >try and milk taxes from new and creative sources the GOP is up in
: >arms about it. We've been hearing story after story about the
: >unfairness of it all. But when the GOP does the same thing? Just
: >a "special interest provision". How disingenuous.

: What would you call a tax free benefit available only to employees of
: colleges and universities and their families but not to students who
: are paying their own tuition?

Something that allows them to subsist on $8,000-$10,000 per year.


: > The USA is the world leader in basic science. We don't need to

: >discourage domestic students from careers in science.
: >This is a truly stupid idea that will have severe and negative
: >consequences for science in this country. All for peanuts in the
: >federal budget scheme of things. We don't have a lot of PhD scientists,
: >but they contribute a lot to the economy....

: Well, I'm sure that you're now relieved to know that we will not be


: decimating the ranks of our nation's future scientists -- unless of
: course you think they all come from the children of college employees.

You are quite wrong about this, Eleanor. You should check the facts
before you blindly support a GOP tax increase on human capital in order to
provide a break to financial capital.


: Eleanor Rotthoff

--
Buddy K

Van

unread,
Jul 18, 1997, 3:00:00 AM7/18/97
to

erot...@io.com wrote:
>
> 77j...@usa.net (Van) wrote:
> >erot...@io.com (Eleanor Rotthoff) banged out:
>
> >>So the college or university merely redefines TA/RA assistance as a
> >>"qualified scholarship or fellowship" under the terms of Section
> >>117(b) which is not being affected at all. That will allow the
> >>assistance to retain its tax-free status. Indeed, the school can
> >>still grant tuition waivers to children of its employees if it wishes.
> >>But that will be treated as income to the employee if the child is a
> >>dependent. Do you think that is unreasonable? Can you make a case
> >>for the proposition that a child of a professor should attend school
> >>free without that free tuition being taxable as a fringe benefit to
> >>the professor?
<snip>

...Yes, yes, y'all line up and tell the bursars office that they need
to give you a fellowship instead of a tuition reduction. Oh, how
dumb of me not to see that's what the Republicans had in mind.

Tax on Tuition Aid May Be Dropped

WASHINGTON (AP) -- House tax negotiators are proposing to drop a plan
to tax tuition assistance that colleges give graduate students.

The House tax bill would have required graduate students to add to
their taxable income the value of tuition discounts and similar
assistance they receive from colleges or their employers. Universities
around the country use such tuition discounts to recruit graduate
students.

<snip>

The above, in plain English, says "The House tax bill would have


required graduate students to add to their taxable income the value of
tuition discounts and similar assistance they receive from colleges or
their employers"

------
And you would have me believe that this is *not* what the House tax
bill really says?

> >Evidently it is not as simple as you make it out to be.

> Actually, it is. There's just a large gap between policy and
> politics.
>
> >"We're going to fix that problem," a House Republican source said,
> >speaking on condition he wouldn't be identified further. "It was never
> >our intention to deny graduate students tax-favored treatment as a
> >result of their working."
>
> Which is entirely consistent with what I posted. The intent of the
> revision was to end the tax-exempt status of a fringe benefit to
> professors and other university employees, not to have any effect on
> TAs and RAs. It would be easy to solve this problem legislatively
> while still eliminating the tax loophole.

"The House report printed to accompany last month's passage of the


bill said the Ways and Means Committee believes that if the tax bill
were passed, "employees of educational organizations, like other
taxpayers, will enjoy the special education tax benefits relating to
education expenses, as well as expanded education savings
opportunities contained in the bill." Therefore, the tuition tax break
would no longer be necessary. "

--
But what about the above paragraph that you conveniently snipped,
Eleanor? Is that also "entirely consistent with what you posted?" Do
you read *that* to mean the Republicans were only going after
professor's children?

You seem to be trying to say the *real* intent was to only get rid of
the loophole that defined a child of a professor as an employee of the
college. A loophole which allows the child to take the same exemption
that the hardworking TAs, RAs, and undergrad and grad employees get.

You further seem to be saying, (correct me if I'm wrong, which I'm
sure you will) that the elimination of the exclusion for TAs, RAs, and
other grad and undergrad employees getting tuition reductions is
simply an unintended consequence of the Republican bill.

...and further, you claim that all any TA, RA, or other college
employee receiving tuition reduction would need to do is simply tell
their college to give them a fellowship or a scholarship in place of
their tuition reduction - that the Republicans have said they are sure
there will no problems with the IRS in doing so, since the Republicans
accidently eliminated the exemption while getting rid of a loophole.

> >>But that will be treated as income to the employee if the child is a
> >>dependent. Do you think that is unreasonable? Can you make a case
> >>for the proposition that a child of a professor should attend school
> >>free without that free tuition being taxable as a fringe benefit to
> >>the professor?

It's not that big a deal one way or the other. I'm not even sure that
that happens. I have very little trust in what you say, at present.

I do see digging around and finding existing perks that haven't been
treated as income in the past - then treating those perks as income -
as a sneaky way to raise taxes while claiming to not raise taxes.

BTW, can you make a case as to why section 117d is phased out in toto
if only the definition of college employee needed to be changed. Or
not even changed, really, since you claim they were only interested
in:

"(B) any person treated as an employee (or whose use is treated as an
employee use) under the rules of section 132(f). "

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Why not just phase out (B)?

>
> I note that Van does not elect to defend this special interest tax
> provision except as it applies to TAs and RAs. Does that suggest to
> us that he himself falls in the latter category?

Nope, however suddenly I was required to count a legal services I
never asked for - and don't use - as income. Income on which I also
owed uncollected FICA. Seemed like a tax raise to me.

> We all need to
> remember the standard distinction between a deduction and a loophole
> -- I can take the former, but not the latter.
>
> >I can make a case that Eleanor takes the section of the tax code that
> >gives the exemption to TAs, RAs, and undergrad employees receiving
> >tuition reductions - pretends like that section of the code is a
> >loop-hole for well-off professors
>
> The fact is that it has been exactly that. There is no "pretense"
> about it. OTOH, having accused me of lying about it, you're not about
> to apologize now that you have discovered I'm right, are you?

Nah, you're not right, you're just good. <g> However, "lying" is a
tad strong, considering all that goes on in these ngs. I'm not a big
fan of flaming headers, and for the flaming header, I will apologize.

I have not seen your long winded apology for the attack on the RA and
TA exemption even among the professional spinmiesters of your party -
though currently there *is* some mighty fast back peddling going on.


They just got caught, plain and simple. In reality, the tax on
tuition assistance was probably meant only as a bargaining chip or to
mollify some rep, with no expectation that it would remain in the
final bill. Obviously there has been some public outcry that has
caused the reps to rethink their position.

> > and then calls for its abolishment as if she were champion of the
> >ittle guy, searching out waste, fraud, and abuse by the wealthy. Feh.
>

> Contrary to your ideological prism, not all of the fraud, waste and
> abuse is by the wealthy. As for me, I would prefer to eliminate *all*
> of the special interest provisions in the code -- no matter who they
> benefit.

Just looks to me like you're out to nickel and dime the little guy
while redistributing the wealth upward.

Harold Brashears

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Jul 18, 1997, 3:00:00 AM7/18/97
to

On 17 Jul 1997 22:47:13 GMT, hkil...@osf1.gmu.edu (HENRY E.
KILPATRICK JR.) wrote:

>Eleanor Rotthoff (erot...@io.com) wrote:

[edited]


>
>: Contrary to what has been loudly screamed, the phase out of the
>: "qualified tuition reduction" has no impact whatsoever on any amount
>: that represents payment to a grad student for teaching, research or
>: other services rendered to the college. This exclusion doesn't apply
>: to that. So what does it apply to? Simple. Colleges and
>: universities frequently provide tuition waivers to employees, their
>: spouses and children. That's a really nice fringe benefit, and I'm
>: all for it. But why should it be tax free -- which means of course
>: that the parents of other college students are subsidizing it through
>: higher tuition costs for their kids and subsidizing it again through
>: the tax code while also trying to find the money for their own
>: student's tuition?
>
>You know who gets tuition waivers? Graduate students who get low pay as
>graduate assistants ($8,000-$10,000 for 20 hours a week for about 30
>weeks with no benefits). Yes, they are employees of the university, but
>they are hardly highly paid professors.

Good heavens! Where did you go to school, or what did you study,
basket weaving? First, I did not get a tuition waiver, I got to pay
"in state" tuition (and a scholarship to cover that). Second, I
worked 60 hours a week, for 50 weeks a year. The only reason it was
not 52 weeks was that the school closed down for Christmas.


>
>Tuition waivers for spouses and children of faculty are not as common as
>they once were.

In fact, I have never seen them. Unfortunately, none of my family or
relatives was ever eligible for any tuition or fee waivers. Here at
USM, almost all of the people who take advantage of the fee waivers
are staff, very few faculty. I don't know why, I think it is a great
opportunity to learn new stuff!

[deleted]

Regards, Harold
----
"That's free enterprise, friends: freedom to gamble, freedom to lose.
And the great thing-the truly democratic thing about it-is that you
don't even have to be a player to lose."
---Barbara Ehrenreich (1991)

Eleanor Rotthoff

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Jul 18, 1997, 3:00:00 AM7/18/97
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brshears@^SNIP^whale.st.usm.edu (Harold Brashears) wrote:

>Currently, I would be adversely affected by the law as written. While
>an employee of the university I have been taking one to two classes
>every semester, at a graduate level, primarily simply to satisfy my
>own curiosities. I will either have to pay tax on these next year, or
>audit the courses instead of enrolling, or take the watered down
>undergraduate courses.

>I will probably continue to take the graduate courses, since if I am
>auditing a course I do not apply myself, and the undergraduate courses
>are too elementary. Besides, I immensely enjoy the consternation of
>the young whippersnappers when I get the better grades. But I have to
>wonder about the many staff and secretarial personnel who are taking
>graduate level courses, and cannot afford to pay the tax. They are
>the ones hurt.

I think you may have a good point, Harold. The main point I was
trying to raise in this thread is that everyone is in favor of
eliminating "special interest tax provisions" until they find one
which they approve of or which benefits them. But these are still
special interest tax provisions if they benefit only a relatively
small portion of society rather than the public at large.

The upshot of all that, of course, is that we end up with a 9,000+
page tax code which we all curse and despise. There is a huge
misconception afoot that "special interest tax provisions" are big
loopholes which benefit the fat cats. Although there are certainly
some of those in the code, the cold, hard truth is that the vast
majority of them are just like this one -- provisions which were added
to the code because someone at some time considered it good public
policy to encourage a certain kind of behavior and which benefit
ordinary citizens who happen to fall into a particular category. We
don't like to think of those as special interest provisions
(especially if we're in the category being benefitted), but they are.

Maybe this is a good thing to subsidize. Maybe they are all good
things to subsidize. But we ought to be willing to look at them for
what they are.



>To my knowledge, relatives or family members of mine are not eligible
>for any kind of tuition or fee waiver.

Based on the information I have seen, some colleges and universities
provide that fringe benefit and others do not. Is that another
argument for not using the tax code to subsidize that benefit?

Eleanor Rotthoff

Van

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Jul 18, 1997, 3:00:00 AM7/18/97
to

HENRY E. KILPATRICK JR.

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Jul 18, 1997, 3:00:00 AM7/18/97
to

Harold Brashears (brshears@^SNIP^whale.st.usm.edu) wrote:
: On 17 Jul 1997 22:47:13 GMT, hkil...@osf1.gmu.edu (HENRY E.
: KILPATRICK JR.) wrote:

: >Eleanor Rotthoff (erot...@io.com) wrote:

: [edited]
: >
: >: Contrary to what has been loudly screamed, the phase out of the
: >: "qualified tuition reduction" has no impact whatsoever on any amount
: >: that represents payment to a grad student for teaching, research or
: >: other services rendered to the college. This exclusion doesn't apply
: >: to that. So what does it apply to? Simple. Colleges and
: >: universities frequently provide tuition waivers to employees, their
: >: spouses and children. That's a really nice fringe benefit, and I'm
: >: all for it. But why should it be tax free -- which means of course
: >: that the parents of other college students are subsidizing it through
: >: higher tuition costs for their kids and subsidizing it again through
: >: the tax code while also trying to find the money for their own
: >: student's tuition?
: >
: >You know who gets tuition waivers? Graduate students who get low pay as
: >graduate assistants ($8,000-$10,000 for 20 hours a week for about 30
: >weeks with no benefits). Yes, they are employees of the university, but
: >they are hardly highly paid professors.

: Good heavens! Where did you go to school, or what did you study,
: basket weaving?

Penn State, MA in economics, and GMU where I can see the light at the end
of the tunnel on a Phd in public policy.

And you?

: First, I did not get a tuition waiver, I got to pay


: "in state" tuition (and a scholarship to cover that). Second, I
: worked 60 hours a week, for 50 weeks a year. The only reason it was
: not 52 weeks was that the school closed down for Christmas.

Not much of a graduate school if they didn't do any better than that for
you.

: >
: >Tuition waivers for spouses and children of faculty are not as common as
: >they once were.

: In fact, I have never seen them.

Penn State had them when I was there, but that was awhile ago. I don't
think they still do, but I can't be certain.

: Unfortunately, none of my family or


: relatives was ever eligible for any tuition or fee waivers. Here at

: USM, almost all of the people who take advantage of the fee waivers


: are staff, very few faculty. I don't know why, I think it is a great
: opportunity to learn new stuff!

Our program allows us to take courses at 7 other universities in the area,
so when I was taking courses, I checked to see who was the best economics
professor around. I found him at Maryland & took his course. There were
several retired guys who get free or almost free tuition who took courses.
That seems like a good deal, although we probably give the old folks
enough as it is.

: [deleted]

: Regards, Harold
: ----
: "That's free enterprise, friends: freedom to gamble, freedom to lose.
: And the great thing-the truly democratic thing about it-is that you
: don't even have to be a player to lose."
: ---Barbara Ehrenreich (1991)

--
Buddy K

Fetus

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Jul 19, 1997, 3:00:00 AM7/19/97
to

Harold Brashears wrote:
>

> I don't know about other universities than USM, but it is my
> understanding that graduate students do not now get a waiver of
> tuition, they get instead "in state" fees. The situation was the same
> at Kansas State, where I paid "in state" fees as a graduate student.
> Of course, that was back in the dark ages.
>

But "in state" tuition and fees are based upon where you live, and
presumably where your parents live. You already paid taxes for
college, that's why you got the in-state rate. Yes, grad students from
out of state get that rate after a while , but it's not the same as
as a stipend or tuition waiver based on academic merit.

Fetus

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