KENNEDY, MESSER, NEAL, BYRNE REINTRO BIPARTISAN BILL TO HELP GRAD STUDENTS SAVE
Washington, D.C. – Congressman Joe Kennedy III (D-MA), Congressman Luke Messer (R-IN), Congressman Richard Neal (D-MA) and Congressman Bradley Byrne (R-AL) reintroduced 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 Congressmen Messer, Neal and Byrne, 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,” Congressman Messer said. “Grad students and researchers who are studying to improve all of our futures should have the chance to invest in their own.”
“This legislation is an important step to ensuring that students who make the choice to pursue graduate and post-doctoral study are not at a disadvantage when it comes time to retire,” said Congressman Neal. “Congress must do more to encourage Americans to save for retirement, and I believe this bill is a small step in that direction. I commend my colleagues for their work on this bipartisan legislation and their commitment to building a stronger financial future for middle-class families.”
“We should be doing everything we can to encourage all Americans, including graduate students, to save money for the future,” said Congressman Byrne. “The federal government should not be creating obstacles, but we should instead work to provide even more opportunities for graduate students to save. That is exactly what this bipartisan bill would do, and I look forward to working with my colleagues to see it enacted into law.”
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), Mike Lee (R-UT), Tim Scott (R-SC) and Ron Wyden (D-OR) introduced a companion version in the Senate. The Graduate Student Savings Act of 2017 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).