KENNEDY, MESSER INTRO BIPARTISAN BILL TO HELP GRAD STUDENTS SAVE
Washington, D.C. – Today, Congressman Joe Kennedy III (D-MA) and Congressman Luke Messer (R-IN) introduced a bipartisan bill that would allow graduate school students to place taxable stipend or fellowship income into an Individual Retirement Account (IRA). By classifying this income as “compensation”, the Graduate Student Savings Act of 2016 would remove barriers to retirement savings for nearly a million students.
“Students pursuing advanced degrees should be allowed and encouraged to invest in their future without restrictions or roadblocks,” said Congressman Kennedy. “By reclassifying income that is already taxed, this legislation will allow young adults to save as they begin new careers. Along with Congressman Messer, I look forward to passing this bill and supporting current and future graduate students around the country.”
“I appreciate working with Congressman Kennedy on this common sense bill to help graduate students start saving while they're still in school,” said Congressman Messer. “Grad students and researchers who are studying to improve all of our futures should have the chance to invest in their own.”
A majority of doctoral students report receiving some of their financial support during graduate school from fellowships or grants, and about a third of all students report that fellowships or grants were their primary source of funding. The median doctoral student takes about seven years to finish a degree – meaning that, for the better part of a decade, a student can be prohibited from saving major portions of her income in a tax-advantaged account. This bill would remove this unnecessary hurdle so that students and postdoctoral fellows can start saving today.
Senators Elizabeth Warren (D-MA) and Mike Lee (R-UT) introduced a companion version in the Senate. The Graduate Student Savings Act of 2016 is supported by Fidelity Investments; the International Union, United Automobile, Aerospace, & Agricultural Implement Workers of America (UAW), Service Employees International Union (SEIU); National Association of Graduate-Professional Students (NAGPS); TIAA; Betterment; and American Federation of Teachers (AFT).