Sen. Elizabeth Warren, D-Mass., along with other senators reintroduced legislation on Tuesday to allow funds from graduate students’ stipend or fellowship to be deposited into an Individual Retirement Account.
Sens. Mike Lee, R-Utah, along with Ron Wyden, D-Ore., and Tim Scott, R-S.C., joined Warren in reintroducing the bill, the Graduate Student Savings Act of 2019. The senators said that federal and state governments generally tax fellowship or stipend funding as income, which does not qualify as “compensation” and therefore cannot be saved in an IRA.
“Graduate students deserve a chance to start saving for retirement,” Warren, who is also running for president in 2020, said in a statement. “This bill will make it easier for students to graduate with a degree and a head start towards a financially-secure retirement.”
While a majority of doctoral students report receiving some of their financial support during graduate school from fellowships or grants, about a third of all students report that fellowships or grants were their primary source of funding, the senators noted in a joint statement.