Urban Wire Black doctoral students face financing problems even without a tax on tuition benefits
Sandy Baum, Patricia Steele
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Controversy over a provision in the House version of the tax overhaul bill put a spotlight on graduate students and how they finance their education. Though the proposal to tax graduate fellowships as income was cut from the final bill, some students still face substantial obstacles in funding their doctoral degrees.

Few graduate students benefit from the tuition subsidies the House bill proposed to tax, as the subsidies go almost exclusively to research doctoral students in selected fields of study at public and private nonprofit universities. In fact, most graduate students are pursuing master’s degrees, which do not generate nearly the same earnings as most professional and research doctoral degrees and for which tuition fellowships are few and far between.

Black students are particularly unlikely to get the kind of support that would have been taxed under the new law. As we document in a series of briefs, black doctoral students enroll disproportionately at institutions and in programs that do not offer tuition benefits.

In 2011–12 (the most recent year for which detailed data are available), 36 percent of full-time research doctoral degree students paid no tuition and fees, and half the students in these programs paid a net price of less than $5,000. But financing patterns differ dramatically across doctoral fields of study. Institutional aid is most generous in the life and physical sciences and the humanities. It is scarce in business management and education, where black doctoral students are disproportionately enrolled.

Institutional Grant Aid to Research Doctoral Degree Students by Field of Study and Racial Composition, 2011–12

Moreover, although only 9 percent of 2011–12 doctoral students received their degrees from for-profit institutions, about one-third of black graduates attended these institutions, which do not offer fellowships to cover tuition. Ninety-five percent of doctoral students at for-profit institutions borrowed for graduate school, and almost 60 percent borrowed $100,000 or more, compared with 15 percent of private nonprofit and 8 percent of public university doctoral degree recipients. 

Differences in the doctoral programs in which black students and those from other racial and ethnic groups enroll combine with differences in their circumstances to generate stark disparities in education debt. One-third of black students who completed research doctoral degrees in 2011–12 borrowed $100,000 or more to fund their graduate education, compared with 15 percent of graduates overall.

Cumulative Graduate Education Debt among 2011–12 Research Doctoral Degree Recipients by Race and Ethnicity

Most doctoral students whose tuition is covered through fellowships and assistantships do not have the cash they would have needed to pay taxes on this benefit. But they face fewer financial barriers than other doctoral students. Black students are overrepresented among the group relying heavily on borrowing to cover the cost of their education. Supporting their educational opportunities will require more than killing the controversial tax provision.


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Research Areas Education
Tags Higher education Financial knowledge and capability Campaigns, proposals, and reforms Federal tax issues and reform proposals
Policy Centers Income and Benefits Policy Center Center on Education Data and Policy