Scott touts the Graduate Student Savings bill

U.S. Senator Tim Scott joined three of his colleagues to introduce the Graduate Student Savings Act of 2017, which would allow funds from a graduate student’s stipend or fellowship to be deposited into an Individual Retirement Account (IRA). While fellowship or stipend funding currently is taxed as income by federal and state governments, it does not qualify as “compensation” and so cannot be saved in an IRA. 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 portions of his income in a tax-advantaged account.  The bill would remove the hurdle so that students and postdoctoral fellows can start saving today.