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How to Advocate for Financial Policy Change on Your Campus

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In this episode, Emily interviews Dr. Tyler Hallmark, a recent PhD in Higher Education and Student Affairs and a low-income, first-generation college student. Emily and Tyler and discuss the why, what, and how of advocating for improving university policies that relate to finances and benefits. They cover the timing of fellowship disbursements and assistantship paychecks vs. fee due dates, emergency aid funds, reimbursements, prohibitions on outside work, and more. If you want to raise an issue that they skipped, please leave a comment in the show notes, email them, or start a conversation on social media.

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Teaser

00:00 Tyler: You don’t have to wait for a union to form. You could be the one that is forming it. I did this often informally, you know, I never thought to call us a union, but I would just share my experiences vulnerably with my peers. And they would share theirs with me. And we would come together and we would go approach the chair of our department or, you know, someone that does have power in our school and say, Hey, we’re having this issue. There are multiple of us. Is there anything we could do?

Introduction

00:32 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 11, Episode 7, and today my guest is Dr. Tyler Hallmark, a recent PhD in Higher Education and Student Affairs and a low-income, first-generation college student. Tyler and I discuss the why, what, and how of advocating for improving university policies that relate to finances and benefits. We cover the timing of fellowship disbursements and assistantship paychecks vs. fee due dates, emergency aid funds, reimbursements, prohibitions on outside work, and more. Tyler is quite knowledgeable and experienced in advocacy and shares his story with us vulnerably. I’m confident that our discussion of policies and hearing about Tyler’s approach to advocacy at the end will help enhance your own advocacy efforts on your campus. If you want to raise an issue that we skipped, please leave a comment in the show notes, email us, or start a conversation on social media.

01:42 Emily: April 18th is fast approaching, so in case you haven’t started working on your tax return yet, I wanted to point you to my #1 most popular free downloadable. It’s my tax cheat sheet for graduate students who are U.S. citizens, permanent residents, and residents for tax purposes. You can find it at PFforPhDs.com/student-tax-sheet/. The cheat sheet briefly explains my framework for the categories of higher education income, the three higher education tax benefits that might be available to you, and why students who were age 23 or younger at the end of 2021 need to be extra cautious. Better yet, once you sign up for my mailing list to download the cheat sheet, you’ll receive a free email course explaining in-depth all these concepts and more. Again, you can download the cheat sheet from PFforPhDs.com/student-tax-sheet/. Please share that link with your peers as well! Without further ado, here’s my interview with Dr. Tyler Hallmark.

Will You Please Introduce Yourself Further?

02:59 Emily: I am delighted to have joining me on the podcast today, Dr. Tyler Hallmark. I first met Tyler actually on an episode of Dear Grad Student. We were both featured by Alana on episode 27. And we talked about kind of, you know, high-level issues related to being a graduate student, advocacy topics. And I just really enjoyed that conversation so much, I wanted to invite Tyler on this podcast to dive even more deeply into that topic. So, Tyler, it’s absolutely a delight to speak with you again. And would you please introduce yourself to the audience?

03:27 Tyler: Yeah, thanks for having me. My name is Tyler Hallmark and my pronouns are he/him. I am presently working as a program associate in the higher education program at the Alfred P. Sloan Foundation here in New York City. Before I came here, I was actually finishing my PhD at the Ohio State University in higher education and student affairs. And so, a lot of my background while I was there was focusing on low-income students, first-generation students, students of color, and their journey through higher education and how we can really make the systems more equitable and more supportive for students like myself that has gone through this as someone who is from a low-income household, who was the first in their family to go to college and who is also Cherokee. And so, you know, I’ve written a lot about my experiences. I’ve written for Diverse, I’ve written for the Chronicle of Higher Education, these different outlets, really, sharing some of the backgrounds, some the challenges I faced, and trying to really shift policy, shift practices, on our college campuses for students like myself.

The Importance of Advocacy in Higher Ed

04:36 Emily: Yeah. And we’re partially basing this interview off an article that Tyler sent me in advance, so we’ll link that from the show notes if you want to get even more of his perspective on these issues. So, you know, beyond just what you explained about your own background and about your work with first-gen and low-income students, students of color, and so forth. Are there any other reasons why you think it’s important to advocate for yourself or other graduate students in higher ed?

05:00 Tyler: Well, yeah, absolutely. I think it’s always important as I was going through, I think, you know, students from backgrounds like myself already have so many barriers to face going to college, having to, you know, learn the whole admissions process, having to learn how to, you know, really make it, how to learn study habits. I didn’t really know have good study habits until I just kind of, you know, picked them up as I was going through college. And so, you know, with all those barriers already in mind, there are so many barriers that are just unnecessary that we’re facing as we’re going through college and, you know, it’s really making a big impact on whether we even complete the degrees we set out to and reach the goals we have for ourselves. So, I always try to share my own experiences and be vulnerable with people, not only just to hopefully shift the policy or practice to make it easier on my college journey, but because I know there are so many students coming after me, and I know if I don’t speak up now, then no one’s going to speak up for me. So, that’s what ultimately got me into doing this kind of work.

06:00 Emily: And I think I’ll add to that as well, like of course it’s a necessary and beautiful goal to make higher education more accessible to more people. Everyone benefits from that. But I was also thinking about this idea of like, we do it this way because this is the way it’s always been done. Or like, I had this experience in my PhD program, so that means that you’re going to have to put up with this too, and how like damaging that is and how unnecessary it is. And so, you know, as we have gone through the, you know, decades of graduate students, like we’ve learned some things that maybe don’t need to be the way they are. And I think part of the purpose of me doing this episode is to try to, you know, with your perspective as well, share what policies maybe are being tried out at some places that could be tried at other places.

Earlier Distribution of Financial Aid

06:43 Emily: Like maybe there aren’t as many barriers to changing these policies, as you know, you might assume. So that’s kind of the impetus behind the conversation. So, let’s talk specifically about what are some of these policies that you think, that I think could be changed, should be changed, that we see kind of in many places across higher education. So, I have a list in front of me and we’re just going to bang, bang, bang, go through this list. Again, partially based on this article that you wrote. So, first of all, one of the things we talked about on the Dear Grad Student podcast was earlier distribution of financial aid. Can you tell me more about that issue and how it can change?

07:17 Tyler: Yeah, absolutely. So, as you’ll see in the article that you mentioned, I talk about my experience. As a grad student, I would go into the financial aid office, and one semester, I was going to miss my rent. I didn’t have any money, and they were not going to release the funds until two weeks after classes had started, well after my rent was due. And I went into a financial aid counselor and I was like, Hey, is there any way I can get my financial aid easier? My scholarship had already sent the money to my institution, but my institution just wasn’t releasing it to my bank account until after classes started. And the financial aid advisor basically just said, well, I don’t know why you don’t have money saved up. I don’t know why you are in this predicament. You should just learn to manage your money better.

08:03 Tyler: And I was really taken aback because I didn’t have any money to manage. So you’re just really expecting me to already have the savings account and all this kind of stuff. And I didn’t have any of that. And so, what I’ve been pushing for is for institutions to really release the financial aid before the semester starts. You know, I can’t afford to wait to move until, you know, after classes start. So, you know, federal guidelines say you can release it 10 to 14 days before classes start, even loans, federal loans and that kind of stuff. And so, I’m really pushing for an earlier financial aid distribution on that regard, or in the cases that institutions can’t move the whole distribution up, at least allowing students to take an advance on financial aid. And some institutions, like my first institution I attended, actually let me take out up to $1,500, which was enough to cover me for one month of rent. However, a later institution I attended would only let me have like a $400 advance, which wasn’t nearly enough to make my rent.

09:06 Emily: It’s a little bit rich, right? Coming from this financial aid officer, whoever you’re talking to to be like, “Um, yeah, we’re going to hold your money hostage for like an extra month here. But like it’s really on you. This is your problem.” As you said, the federal guidelines allow that earlier distribution. So like why wouldn’t the universities, as you said, at least release part of it? And specifically maybe for your situation or how this works in general, when you’re talking about financial aid, I think you’re speaking about a scholarship, right? So like awarded income that, you know, had been sent to the university for you, and it was just basically giving you access to that money earlier.

Detrimental Effects of Lack of Early Access to Your Own Funding

09:40 Tyler: And a lot of this falls back to also institutions doing enrollment checks. So, you know, it’s mandated that professors and faculty report attendance to their classes. And so the financial aid office will often wait until they get those attendance records before they let students have any money to make sure they’re showing up. But I think that’s a detriment because especially, I’m in grad school. I know I often showed up to class and I didn’t have my books on the first day of class. And I had a professor saying, you’re a PhD student. How do you not have your books already? You should have learned this, you know, years ago. And I’d say, well, I’m a PhD student, but I’m still poor. I still can’t afford, you know, to get my books before classes start, unless they give me my financial aid.

10:26 Emily: Yeah. I think this is so relatable to anybody who’s been through that transition to graduate school. I mean, at least they can imagine like the difficulties in that. Like, I think back to my own move to graduate school, and like, oh wow. Now I realize how fortunate that was. Because for example, I didn’t have to move very far. Like I didn’t have to buy a plane ticket. I already had a car. So like, it was just like, okay, I’m going to pack up my possessions and go. And actually the apartment that I got into did like a student, like thing where you didn’t have to put down a deposit. So it was like all kind of set up to be like, okay. And I did have little bit of savings from the previous job that I had. So it was like, looking back on that it’s like, it went okay for me, but I can so easily see how it could be really, really difficult if you don’t have some of the things that I just mentioned already in place or like more challenges there.

11:10 Emily: Another sort of way to get at this problem is for PhD programs, in particular, to provide something like an extra bit of money, a moving bonus, a top-up fellowship, something that is specifically sort of earmarked to help students move to that institution. Because as we know, probably most great majority of PhD students are moving some distance to get to their new programs. Now, I’ve seen, like I’ve had heard reports of people telling me that their offers included this kind of thing, $500, a thousand dollars. We talked about this, for example, in the episode with George Walters-Marrah, which I’ll link to in the show notes. It was a $500 moving bonus that helped him decide between his number one and number two choice of PhD programs. Like that was kind of the final clincher was getting that offer. But I understand that you have talked about this with many people before as well, and you’ve been hearing some different things.

12:02 Tyler: Yeah. So first off, I will say I’m a big advocate for applying moving bonuses for students, especially those grad students trying to move to college that often have to go across state lines to find a graduate program that matches their needs. They have to leave home. So, a big advocate for that. And I’ve been talking about that a lot, you know, you’ll see me post about it on Twitter and those kinds of things and my own experiences showing up to college and going $5,000 in debt because I had to move across the country. But then I also had a lot of responses from, you know, deans and administration that read my work and they’ll say, Hey, we looked into doing this moving bonus thing, but it’s just not feasible. Like it’s not possible for us, we’re facing different, you know, barriers to policy that just won’t let us distribute those kinds of bonuses to students. And so I’m not, you know, super familiar with what policies are in place and if those are federal or state or how that’s working there. But I do know some institutions run into trouble when they do try to look into that.

13:02 Emily: Yeah. So this is a little bit of an open question. And maybe it does vary by state. Maybe it varies, you know, public versus private institutions. But I am glad that people, at least administrators, are at least looking into it, at least making the effort. But in places where it is possible, it is a great, great, great, incentive to help with that, as we were just talking about, that early financial crunch that everyone’s going through just to get to school. So thanks for sharing that. I hope that they keep kind of chipping away at whatever these barriers are that they’re seeing.

Benefits of Pro-Rating

13:31 Emily: Okay, another issue that I’ve had people actually on the podcast mention to me before is about the student fees that often have to be paid like really soon before the start of the semester, that can happen, or very soon into the semester. And I know for me, for example, one of the fees that I paid, it wasn’t even necessarily a required one, but I mentioned I have a car, so I paid like a parking permit fee once per year. So I paid that, you know, in one lump sum, it actually changed like how I even budget to like, be able to handle that kind of once per year expense. But I heard from some other people at other institutions that their fees and things like parking permits were prorated like per paycheck. And I thought that was such a smart idea to like spread out that payment throughout the year. Is this an issue you’ve thought about all?

14:16 Tyler: You know, I really like the idea of pro-rating. I think you run into trouble with that when you look at scholarships because you have to pay in a lump sum then. You know, when I was on my PhD, I relied on scholarships and fellowships less so than an actual job and paycheck. So I didn’t face that directly. I will say some of the things I faced, and I would often ask for, and a lot of students don’t know to even go ask for this, was these places that often require fees upfront, you can often ask for them to push that fee back. So for instance, when I would enroll for my fall courses, they would say, well, a certain amount of fees are due in May before, you know, three months away. And I was able to always petition for that and they would say, okay, we can wait until your scholarship comes in in August or September and pay it then. And so just institutions could make that more clear that students can actually ask for that. And on the student side, you should just know that that’s often an option. I’ve done that at multiple institutions so far in that regard.

15:20 Emily: Yeah. I think the basic point here is just like, let’s time the payment of fees along with when the student actually has money to pay. So if it is a monthly or whatever, kind of paycheck, let’s pay the fees with every paycheck instead of, you know, upfront all at once. Or if you’re receiving these like larger scholarship or fellowship distributions, yeah, as you just said, like let’s coincide the date of the fee needing to be paid with that disbursement because that’s when the money is available. So logical. Love it. Thank you so much for, you know, pointing out that you’ve been successful in having that exception made for you.

Emergency Aid Funds

15:52 Emily: Let’s talk about emergency aid funds now, and I’ve actually heard this in two forms, both grants and loans. I don’t know which one you have been talking about the most. But there are sometimes emergency funds available to graduate students. So, can you tell me a little bit more about this issue?

16:08 Tyler: Yeah. So, we see a lot of this coming up, especially over the pandemic. I see a lot of federal funding that is going to institutions during this time. Institutions are then turning that into an emergency aid fund. Of course, I’ve seen a wide variety of funds. Like you mentioned, there’s a loan and the actual grant money that you can just keep and not have to pay back. But also there are some that require different amounts of paperwork in different red tape to even receive. So, you know, some will actually require, and they won’t process it for a week, whereas some will process it within two days in a senior student account and those kinds of things. So, the thing I mainly advocate for is to even have these funds set up, but also have them as easy as possible for students to access.

16:55 Tyler: And the final note I will say is that too often institutions gear these towards undergraduates only. And they don’t even write that. I had one institution where I was struggling and I was going to apply for this emergency grant funding. I actually had a financial aid counselor tell me to apply for it. And after I applied, they emailed me back and said, well, you’re a graduate student. This is for undergraduates only. And even the financial aid counselor wasn’t aware that it was for graduate students only. So, making that clear around those and really targeting it towards all students on your campus and not only certain populations.

17:28 Emily: Definitely. I attended a conference in 2019, the Higher Education Financial Wellness Association’s annual conference. And I remember these like emergency aid, you know, grant and loans programs being a big topic of conversation at that time. More and more universities were implementing them. And so I think, you know, the suggestion here is just yes, more please, and also to more populations of students, please. And Hey, also postdocs. Don’t want to leave out the postdocs here. They have financial stress as well.

17:54 Tyler: Totally. Especially when you think about that it’s often these graduate students and postdocs that are more likely to have families. So they’re more likely to run into these kinds of emergency situations in different regards.

Food Pantries and Subsidized Housing

18:06 Emily: Similarly, another topic of conversation that I heard at that conference was about food pantries and food banks being set up at universities and how they were implementing those programs. Can you tell me about your experience and advocacy around these?

18:19 Tyler: Yeah, certainly. Again, this goes back to having a wide variety of what these food banks look like. The one thing I really advocate for these is really having them in a place where students hang out. You know, when I was at the University of Pennsylvania, we actually had this great intercultural center where students would just come and study, hang out with their friends, have movie nights. And there was a food pantry that was just open. There wasn’t anyone that you had to sign in and get the food. You could just walk in and take the food as you needed it. And you know, a lot of students that are often facing this food insecurity, um, are often, you know, afraid of the shame that comes with it. Afraid of someone seeing that they need help. And so having these, just being open and easy to access for students, I think that’s the best way to really go about setting up a food pantry instead of hiding it, you know, in a basement on campus or somewhere that students don’t even know where to look.

19:09 Emily: Yeah. Or putting up any like red tape or anything like that. I mean, of course they want to know how much it’s being used. But you could just do an inventory to figure that out. Great, great. Another issue that I wanted to raise is something that I’ve talked about in many of my other podcast episodes, which is offering subsidized housing in high cost-of-living areas. This happens sometimes, although we’ve had sort of questions about it on the podcast, whether it’s all it’s cracked up to be. And I’ll link to some of those previous episodes in the show notes, but then also subsidized childcare. And this is something that’s come up in two of my episodes, specifically with grad student parents. Are there any comments that you’d like to make around these issues of being able to subsidize, you know, these big, big expenses for students who need it the most?

19:56 Tyler: Yeah. The one thing I’ll add here is just when we’re thinking about housing on campuses, I know one of my grad schools, the reason I even chose it was because they actually offered a form of graduate student living that was free. I mean, I had to work for the university in their housing department, but they offered me housing. And that just made it all the more possible for me to live it in an expensive city. And so, I think even thinking about jobs and where we could provide, you know, if students do want to take on that extra job, mine was like a 15 to 20-hour job a week and I was able to get free housing for it. So it paid off for me. And that really helped me afford my master’s degree.

20:36 Emily: Absolutely. That’s something that we’ve talked about, really featured, that kind of strategy of serving as a resident advisor in two previous episodes, one with Adrian Gallo and one with Dr. Erika Moore Taylor. So check out those episodes in the show notes if you want to learn more about that. And it is a job, I know, you know because you did it, but it’s absolutely a job. It’s absolutely a part-time job. So we can’t trivialize that, but it can be very, very valuable, you know, to your bottom line, as a graduate student. I guess the other point that I want to make about these, you know, subsidized, um, resources is that they’re always too scarce. And so I think when you’re making a decision about where to attend graduate school and having, you know, the possibility of being in subsidized housing or the possibility of obtaining subsidized childcare is something that you need to have to make the finances work in that particular place.

21:21 Emily: You, you have to be so in-depth about what is the process of getting into this? How long can I have access to it for? So, for example, just recently, it was season 11 episode one, published an interview with Maya Gosztyla who was living in subsidized graduate housing at UCSD. And because she had started it, I think a couple of years ago, she had this like locked-in rent, but rent was being increased for like new people coming onto leases massively. It was like a, I don’t know, a 60% increase or something huge like that. And so, you know, these things can happen. So like you just have to really kind of understand the way the winds are blowing on campuses in terms of how much is being put behind these resources. And if you need it, you need to make sure you’re going to have access to it.

22:07 Emily: I know that childcare is always, always too scarce. I do recommend the episode I did with Lauri Lutes, if you already have a child or are planning on having a child going into graduate school. She was very intentional about choosing which graduate program would be the most supportive to her in her childcare needs and ended up at Oregon State University in terms of what she had to choose among. And they did things like for example, have free childcare, like sort of like afterschool care on campus, up to like four hours a day, completely free for students. So having it on campus and having it as like that part-time flexible option in addition to full-time, you know, daycare or something, that was vital for her, like making her finances in graduate school work.

Commercial

22:53 Emily: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients.

23:57 Emily: There are two remaining live Q&A calls for the annual tax return workshop, How to Complete Your Grad Student Tax Return (and Understand It, Too!), which are scheduled for Monday, April 4th and Sunday, April 10th. For fellowship and training grant recipients, please be aware that the deadline to make your quarter 1 2022 payment, if applicable, is April 18th, the same day as your 2021 tax return is due. The 2022 quarter one live Q&A call for my estimated tax workshop, Quarterly Estimated Tax for Fellowship Recipients, is scheduled for Thursday, April 14th. It would be my pleasure to help you save time and potentially money this tax season. So don’t hesitate to reach out. Now back to our interview.

Reimbursement Timelines

24:47 Emily: Another issue you brought up in your article was something that every grad student complains about, which is reimbursements after you, you know, outlay funds for conferences or for equipment or travel or other things. Talk to me about that reimbursement timeline issue.

25:02 Tyler: Yeah, definitely. So I think, you know, there’s this dangerous assumption we have probably in society broadly, but especially I’ve seen it in higher education is that students have the money to pay for things up front and rely on a reimbursement that can come sometimes months later, months down the line. And I think that’s really particularly concerning when we think about this professional development and how important professional development is. And even though we’re setting aside funds for students, we often expect them to pay for the conference, the hotel, the travel, everything up front, and then rely on this reimbursement that can often have a lot of red tape that, you know, students can often not be sure if they’re even going to get it back. Or even when they apply for reimbursement funds, they might not hear back until a week before the conference when flights and hotels are already super expensive. So having reimbursement not only, perhaps think about giving that money upfront, having to pay an advanced setup, but also thinking about when we approve students for it and how fast we can approve for that, that they’re going to certainly get these kinds of funds going forward. I think those are some things to really think about here.

26:14 Emily: Yeah. Pay in advance would be ideal. And if not, get that reimbursement back to them as quickly as possible. Even before the event occurs, like you said, the timing of buying flights and so forth, like you can buy these things months in advance. The conference registration fees also can be really high paid months in advance. So like, can we just reimburse them right when they have the expense, you know, one, two weeks later or do we actually really have to wait until after the event occurs? Hopefully not. And like you said, you know, there is the assumption in these systems that students have access to cash, which as we know is usually not the case. And most graduate students, I would say, put these kinds of expenses on credit cards. And then even if the reimbursement does come through, we all hope it does, then they have those months of interest that they’ve paid on, you know, hundreds over a thousand dollars worth of these kinds of expenses. And so that’s like a lot of financial damage that happens in response to this, you know, kind of system. So totally agree with you. I know everyone’s on board with that topic, right? How do we improve this reimbursement system or eliminate it?

27:13 Tyler: Absolutely. One thing I’ll also add there is, we’re assuming all students have access to credit, but I’ve actually had many students, you know, going through my career that were perhaps international students that had just gotten over here and they didn’t have an American credit line, you know, and that kind of access. So they didn’t even have a credit card to put this money on. They really had to dig into their bank account if they ever wanted to participate in these kinds of things.

Prohibitions on Outside Work as a Grad Student

27:37 Emily: Such a good point. Also my assumption. Access to cash, also assuming access to credit. Great, great point. Thank you. Another issue that I wanted to throw in here is about prohibitions against outside work as a graduate student. And tell me about your experience. I think you at least went to a couple different institutions for graduate school. Did they have any explicit prohibitions against outside work?

27:58 Tyler: Yeah, absolutely. It was actually my first year in my PhD. I received a fellowship, and in that fellowship contract, they explicitly stated that I couldn’t take any jobs. That the whole purpose of the fellowship was to fund me so that I, you know, could focus on my studies. And while I understood that it was well-intentioned, still, I had a lot of time. First year was actually the least busy year of my PhD. So that was the one year I did want to have an extra job and try to pay off some of the debt I had, pay off those moving expenses that we mentioned, and really set myself up so I could focus more on my studies in my second, third, etc. years down the road. But that first year, because I had a fellowship, they actually made me sign a contract that I wouldn’t take any other job, whether that was with the institution or outside of it.

28:47 Emily: And I totally understand your impetus for like wanting to clear up, you know, past debts. And as you said, set yourself up for having a good, you know, subsequent second, third, and fourth years. Did you feel like that fellowship was sufficient had you not had those goals? Like if it were just paying for living expenses? Or was it like already outrageous that they were thinking that was enough?

29:08 Tyler: Actually, the fellowship is like the, at that institution, is like the one thing that pays well. So, it was actually enough for me to live on. It was fine there. But to set myself up to pay these rents before, you know, the semester begins and set myself up for those kinds of money management they expect from me and the financial aid office, it wasn’t enough for that. It was just enough to cover me on a monthly basis.

29:33 Emily: It is, I think at a minimum, a great idea for a fellowship to sufficiently support a graduate student. But as we were just talking about assumptions, the assumption there is that every graduate student has the same financial needs and the same financial responsibilities. You had a different situation maybe than one of your peers and you wanted to have that outside income. My kind of stance on this is, the university should stay out of your time, the business of your time, aside from, you know, what you are devoting to your studies. So if that’s going to be whatever you decide it is, but as long as the student is making sufficient progress towards the degree, I don’t think that university, whatever, anyone in your department, your advisor should have any restrictions on what you do with the rest of your time. After all, we were just talking about people at different life situations, for example, you know, people can be parents or caregivers for other, you know, people. Maybe you have a really time-consuming hobby that you engage with.

30:27 Emily: All of that is fine. Why would someone else not be able to work during their free time as you were just talking about that wasn’t taken up with progressing towards their degree? Let students manage their own time, and if it includes making money, that’s okay. As long as they’re doing what they need to do, you know, for the PhD, kind of my opinion on that. I’m not a fan of these outside work prohibitions, especially when they’re really, really broad, like saying you can’t have any outside source of work or income versus saying something like you can’t have a job where it interferes with the hours you’re expected to be in lab. That kind of thing makes sense. Like they don’t want you being pulled away from your primary responsibilities to head to your W2 job somewhere else. But to say that you can’t have like a freelance, you know, thing on the side, that’s totally up to your own time and discretion. It just does not make logical sense to me.

31:16 Tyler: Absolutely. One thing I’ll add here also is thinking about that just because you’re telling students they can’t get jobs and be compensated for their time, that often can lead to detrimental effects in the way that a faculty member might say, oh, Hey, you have this fellowship, and it won’t let you have any other jobs. So you can do this research for me on the side, right? And it puts these weird power dynamics in place that faculty can take advantage of you. I never had that, but I will say I have seen peers struggle with that, that they’re on this fellowship year until faculty see them as someone they can add to their research team because they have extra hours now, and now they’re not being compensated for that research, but they’re still being expected to put work in. And so, those are some things we should really think about in these prohibitions.

Time to Pay Higher Stipends?

32:05 Emily: Yeah. The general problem of unpaid labor in academia coming down to a fellowship recipient. Absolutely. And the final kind of point that I wanted to bring up is just the very, very simple financial solution of pay higher stipends pay, bigger fellowships, just pay people more. Would you like to add anything on this issue as a general solution? Just give a higher stipend.

32:32 Tyler: Yeah, no, I completely agree with it. I think it’s wild that we have, you know, careers in the real world that will raise your salary annually, or supposedly, to keep up with living wages, but grad students are still getting the same stipend they did 10 years ago. And so, I absolutely agree with increasing it appropriately and really taking those things into account.

32:59 Emily: Yeah, I’m especially thinking about this issue right now in a time of, you know, high inflation and wondering, now we’ve experienced rather low inflation for the last, you know, more than 10 years now. And so having no increase in stipend or a small increase in stipend that may have been manageable. But now programs really need to be proactive about responding to these increases in inflation by offering larger annual cost of living adjustments and increases. And I’m just afraid that it’s going to take some of them like three years of studying the issue before they finally like raise the stipend for goodness sakes. And similarly, I’ve seen this issue too with fees increasing. So like sometimes state universities, they can’t increase their tuition. You know, there are certain caps on how fast they can increase it, but there are much fewer restrictions on how fast they can increase fees.

33:47 Emily: And so, fees on graduate students can increase rapidly without there being increases in the stipend to actually pay for those fees. And so that’s something I want, and obviously program administrators to keep that in mind, just like, what are you even charging your students that’s going to come out of their own pocket? And can you then add to what’s going into their pocket to make up for that because if you have this static stipend for five years and the fees increase every single year, you may not know going into graduate school that that could be a possibility, but it has happened.

34:14 Tyler: Absolutely. That’s a great point. One more thing I would like to add is, thinking about how we structure financial aid advisors and having those cater to students. You know, we mentioned the point earlier about really understanding that students have different financial needs and we should be catering these setups towards them. And one of the ways we could do that is really assigning one financial aid advisor to a student. So that one financial aid advisor gets to know you over four years, gets to know your needs. And they’re able to really cater these kinds of policies and adjustments as necessary. I have had that at some institutions. You know, my first institution, I had a really great relationship with my first financial aid advisor. You know, they knew me on a first-name basis. However, later on, I went to an institution that treated me more like a customer. That I would just come in and whoever was at the desk would serve me that day. And they often didn’t have any clue about my needs. They didn’t know how my scholarship worked and how it was, you know, structured, et cetera. And it always led to confusion and made life a lot more difficult for me. And so, that’s one solution I often put out there is for institutions to really think of students as students, as human beings, and not just customers that they can just, you know, serve with a one-stop-shop.

How Do We Advocate?

35:33 Emily: I love that point. Thank you so much for adding that. It makes total sense because once you get to know the students more intimately, and you’re not having those, like I’m meeting you for the first time conversations over and over and over again. As you said, they can better understand your needs, and then they can better advocate for you when they’re talking about policy changes within their own like offices or whatever. And speaking of advocacy, we talked at the beginning of the episode about, you know, why it’s important to advocate on these, you know, financial and benefits-related matters. We talked about what you, you know, the listener could advocate for at their own institutions. By the way, if the listener, if you listeners have other issues you want to raise, please tag us on Twitter or add a comment to the show notes for the episode, anything like that, email us, that would be great. But to conclude this, how do we actually go about advocating? What are the actions that someone could take to, you know, try to enact change on one of these issues?

36:27 Tyler: Yeah, absolutely. So, I think there are a lot of ways to go about this, and you’ve got to really find what fits you. One thing that I often do is I write, I write about my issues. I tell my story, and every story I tell, I try to end it with, you know, asking myself the question, what would make this experience better? You know, you can read the story to the article that we linked earlier. I really just wrote writing to get my frustration out about this financial aid advisor, and then telling me to manage my money better. I started writing about that frustration, and then I turned the question on myself and I said, what would’ve made that situation better so I can really think of recommendations for other people? And publishing them in these kinds of outlets that higher education practitioners read, that’s one way to do it.

37:09 Tyler: Another way would just be going through your own institutional systems, setting up meetings, you know, when you really run into something, meet with your department chair on the reimbursements. Meet with the head of your financial aid department and say, Hey, why is the system set up like this? It’s really causing a barrier for me. Having those kinds of conversations with people on your campus, I think, you know, and maybe it’s a big assumption, but I like to assume that people always have your best intention in mind. And I like to assume that people who are working on these college campuses are trying to help students and trying to listen to you. Just sometimes they might not be aware of that. And so, bringing those issues up to people that are in a position to make change is one way to go about that.

37:52 Emily: And I think, you know, back when we had that conversation on Dear Grad Student, I was listening to you, you know, share this approach of sharing your own story, vulnerably, like opening up to an administrator and saying, okay, this is the policy that’s in place, and this is the effect that it’s having on me personally. And is there something we can do to alleviate this situation? I thought that was a wonderful way to go about it. And it’s actually a theme I’ve heard over and over again as I’ve talked with graduate students about negotiation, for example, there’s, you know, an early point in this, which is like negotiating your offer letter before you even become a student at that institution. That’s a great time for negotiation. But the way that I heard that students were going about this was by sharing vulnerably how they anticipated the stipend and benefits offered by an institution, how they anticipated that would affect their personal finances and their lives and their stress level and their ability to devote, you know, time to their studies and all that kind of thing.

38:45 Emily: And it just is like, it’s not like a hard nose like you have to give me more, you have to fix this. It’s like, Hey, I’m having an issue here. Like what can be done? Like what creatives solutions can we come to that are going to help with this? And as you said, you know, that can happen not just at that early point before you become a student, but over time you can develop relationships and go back to these people over and over again. And they can really learn again how these policies are affecting you. So, I love that suggestion and your approach to it.

Unionization Movements and Collective Bargaining

39:11 Emily: One other topic I wanted to bring up was about unions and unionization movements, or not even like, necessarily like official unions, but just I’ll call it collective bargaining. So like getting together with other people, let’s say in your department, even if you’re not represented by a union and saying to the administrators, Hey, 50% of us are having a problem with this policy. Like what can we do about it? Same kind of conversation, but coming from a group rather from an individual. Do you have any thoughts on these, you know, unionization movements or how this can be a part of advocacy?

39:42 Tyler: Yeah, absolutely. I think the big thing to say here is like, you don’t have to wait for a union to form. You could be the one that is forming it. I did this often informally, you know, I never thought to call us the union, but I would just share my experiences vulnerably with my peers and they would share theirs with me. And we’d have these conversations back and forth in private until we finally, you know, just, oh, you know what, I’m having the same issue. And we’d come together and we would go approach the chair of our department or, you know, someone that does have power in our school and say, Hey, we’re having this issue. There’s multiple of us. Is there anything we could do? And that’s how I often would position any kind of argument or, you know, any kind of advocacy that I would take to someone else. I would say other students are having it, too. This is a problem that we should really, that warrants addressing. So, yes.

40:35 Emily: That’s a perfect example. I’m so glad that, I mean, just as you said, like if a union is in place, go through that channel. If a unionization movement is in place, you know, join up with that and make your issues like heard to that larger group as well. Even if not, as you said, you don’t have to wait for it, you can go as a group and express your, you know, desire for something to change. So, love that so much.

Best Financial Advice for Another Early-Career PhD

40:55 Emily: Tyler, it’s been great speaking with you again. Wonderful to have you on the podcast and have all of your insights here. I’m really glad you agreed to do this episode, and I want to ask you the standard question that I ask of all of my guests, which is what is your best financial advice for another early-career PhD? And that could be something that we’ve touched on in the course of this interview, or it could be something completely new.

41:15 Tyler: Yeah. Well, the big advice I’ve been telling people, even people starting at my current position at my, you know, Foundation has been asking for, you know, some moving expenses and a signing bonus. You know, for instance, not all jobs will let you negotiate the salary. You know, my position wouldn’t actually let me negotiate the salary. But my way of negotiating was saying, Hey, I’m a low-income student coming out of a PhD program. I could really use a moving stipend and, you know, it was, again, going back to this whole being vulnerable. I could do that in my career as well. And, you know, they really wanted me, they understood my situation and all these things I’d advocated and wrote on. They knew my experiences. And they were able to provide me a moving expense. So that was one thing. The second thing I will say is, just making sure you really understand and read deeply on your benefits when you do sign, you know, what’s it mean to start a retirement fund? Those are things important to think about when you’re starting a new job and to pay in as much as you can, when you’re still young. As much as you can afford, you know, as someone who might have loans or whatever it might be to pay off.

42:20 Emily: Love that advice. I love being able to speak with people who are already past the grad school experience and can give us a view from the other side in the world of proper full-time employee stuff. So, that’s great.

42:32 Tyler: The grass is greener over here. I promise that.

42:35 Emily: Yeah. Good to hear. Good to hear. Thank you so much for coming on. It’s been great to talk with you again!

42:40 Tyler: Yeah. It’s been great talking with you. Thank you for having me!

Outtro

42:48 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? I have collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC.

This Veteran Receives External Funding for Her PhD Program

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In this episode, Emily interviews Emily Knitter, a PhD student in counseling psychology at the University at Buffalo and US Army veteran. After being medically discharged from the military, Emily funded her undergraduate degree with the GI Bill and subsequently received five years of PhD funding through the Vocational Rehabilitation program. This external source of funding has given her a greater degree of autonomy in her research and enables her to serve as a spokesperson for advocacy efforts in her department. Emily also gives her insights into the mental load of home ownership and being a landlord based on her experience of owning two homes.

Links Mentioned in this Episode

This Veteran Receives External Funding for Her PhD Program

Teaser

00:00 Emily K: It’s five years. Like it’s such a long piece of our lives, that the thought of kind of putting everything else that you want to accomplish in life, in addition to this degree, on hold, just that feels like an opportunity cost to me.

Introduction

00:22 Emily R: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 11, Episode 6, and today my guest is Emily Knitter, a PhD student in counseling psychology at the University at Buffalo and U.S. Army veteran. After being medically discharged from the military, Emily funded her undergraduate degree with the GI Bill and subsequently received five years of PhD funding through the Vocational Rehabilitation program. This external source of funding has given her a greater degree of autonomy in her research and enables her to serve as a spokesperson for advocacy efforts in her department. Emily also gives her insights into the mental load of home ownership and being a landlord based on her experience of owning two homes. If I may say so myself, this would be a great time to join the Personal Finance for PhDs Community at PFforPhDs.community for a monthly price of $29.

01:25 Emily R: With Tax Day coming up on April 18th, several of the included resources are quite timely, such as: 1. How to Complete Your Grad Student Tax Return (and Understand It, Too!) and/or How to Complete Your Postdoc Tax Return (and Understand It, Too!), which help PhD trainees prepare their 2021 tax returns with respect to their higher education income and expenses. 2. Quarterly Estimated Tax for Fellowship Recipients, which helps people who aren’t having income tax withheld from their paychecks figure out their estimated tax payments. 3. Open Your First IRA, which walks you through the seven boxes you have to check to confidently open, fund, and invest your first retirement account and provides in-depth resources to support you. The deadline to open and fund a 2021 IRA is Tax Day, but you won’t want to wait quite that long.

02:19 Emily R: You’ll have access to numerous evergreen resources, such as my Wealthy PhD webinars on financial goals, investing, debt repayment, and cash flow. Your membership also includes invitations to monthly live calls with me and other Community members; you’re welcome to bring your own questions and topics of interest to these calls for discussion. Our next live call is on Wednesday, March 16, 2022. You can learn more about and join the Personal Finance for PhDs Community at PFforPhDs.community. Without further ado, here’s my interview with Emily Knitter.

Would You Please Introduce Yourself Further?

03:04 Emily R: I have joining me on the podcast today Emily Knitter. She is a third-year PhD student in counseling psychology at the University at Buffalo, and she is a veteran. And so her path to the PhD program that she’s in is a little bit different from most of the people that I interview and her funding course has been different. So I’m really excited to talk to her about that. So Emily, welcome to the program. And will you please tell the listeners a little bit more about yourself?

03:27 Emily K: Thank you. Very honored to be here. Especially since we both have great names. So yeah, like you mentioned, I was in the Army. I served as a journalist for five years. I joined straight out of high school. I was medically retired and thought I was going to go kind of down that same path, but I knew that journalism didn’t pay really well in the real world, quote unquote. So I decided to go to school for marketing. So I rolled out of school. I did one year in a marketing program down in Georgia, despised it, dropped out. And then I ended up getting a job opportunity and I moved to New York. And so I worked for a year at a YMCA doing membership management, insurance billing, a lot of office work and also despised every single minute of that. But, you know, learning kind of what pieces I liked, what pieces I didn’t.

04:21 Emily K: And at the same time I started going to therapy myself. And so, because I was in the military, I had access to therapy through the VA at no cost, which was huge at the time. And that was life-changing for me personally and professionally. It really kind of helped me start solidifying who I wanted to be and who I thought I was, which was something that I had lost when I left the military. I really didn’t feel like I identified as being a soldier with every fiber of my being while I was in, you know, I just kind of thought I was Emily who happened to wear a uniform. But then once I lost that uniform, it was like I was completely lost. And working with her, she really helped me kind of start to understand myself better, understand maybe where I would want to go with my life and the influence that she had on me combined with kind of really realizing that I liked helping solve problems at the Y and I liked helping people with that.

05:32 Emily K: You know, I started thinking maybe I should go back. I didn’t have an undergrad at all, besides my one year in marketing at the time, that maybe psychology would be a cool path to go down. And, you know, I figured if I could make a third of the difference in somebody else’s life the way that she helped me, that that would be a worthwhile way to kind of invest my life and my time. And so with not a broken heart at all, I put in my notice at the Y, and I went back. I did my undergraduate at St. Bonaventure University, which is down in Olean, New York. A really, really cool private university down there. And so I spent three years, graduated there, and then I rolled right into the PhD program that I’m in now. So that’s kind of my brief background there.

Funding Undergrad: GI Bill

06:23 Emily R: And can you tell us how you funded the undergraduate degree? Because I understand your status as a veteran played into that.

06:30 Emily K: Yes, absolutely. So I used the GI Bill, which is a program that anyone who served at least 90 days of active duty in the military qualifies for. There are a couple exceptions to beyond that, but that’s kind of the standard is basically anyone who served, made it through basic training, qualifies for this. And so it gives you 36 months of benefits where it pays all your tuition, it pays all of your fees, you get a living stipend, and you also get money for books and supplies. So it’s really an incredible program. And so I used the year of it in the marketing program. And then, so that one, I was in state in Georgia, so I didn’t have any problems there. And when I moved to New York, I had residency because I’d been there for a year. So I applied, but St. Bonaventure is private.

07:26 Emily K: And so, there was an additional program for there because the GI Bill only covers public in-state tuition and fees. And so anything above and beyond that, in theory, you would have to take on. But St. Bonaventure there’s a program that schools can buy into called the yellow ribbon program, which they end up splitting the difference with the VA of whatever is above and beyond their cap for the state. So because they were yellow ribbon program, I was able to attend this program completely at no cost to me, with the living stipend, which, you know, really was quite a luxury. Because it’s not a school I would’ve gone to if I was accruing debt at all, but it was a really, really great experience for me. And the class sizes, I mean we were usually like one to eight, one to 12 for the ratio.

08:18 Emily K: So it was just a really, really great experience. But a big thing that I’ve noticed in my experience is like how much the culture of the school really makes a difference. You know, because that was a big reason why I stopped in my marketing program is because they didn’t have any veteran support and I didn’t really feel like they cared whether I was there or not. And so like when I left, I don’t think they noticed, whereas at this school they were very responsive and it made a big difference in my experience of the program and also kind of set the bar for what I looked for when I was looking for my PhD programs.

Transition to Grad School

09:04 Emily R: So let’s talk about your transition to graduate school. We’ve already heard the motivation from your work with a counselor previously, and we’ve also heard that, you know, you’re a bit selective about the institutions that you want to apply to you because you want to be supported. How did you end up in the particular program that you did? And then we’ll talk about how you’re funding it.

09:22 Emily K: Sure. Yeah, absolutely. So the big thing actually while I was in undergrad is I met my now ex-husband at the time, but he had roots in this area. And so one of the big things that I was looking for on top of making sure it was going to be a right culture fit, because I had experienced what that doesn’t feel like in the past, was I was relatively landlocked. And so, I was entertaining the possibility of doing both master’s degrees and PhD programs. I’m kind of a like shoot for the stars and see where it lands type of person. And so this particular program that I’m in now, the counseling psychology track, was the one that stood out above and beyond everything else as what I was looking for. They seemed receptive. I was able to set up some informational interviews with some of the faculty, even before applying.

10:18 Emily K: They were getting back with me, they seemed interested. For all those reasons, this was actually the only PhD program I applied to. Like I put all my eggs in this basket and I was like, if I don’t get accepted here, the deadlines for the master’s programs were later on. So I knew I could kind of fall back and apply somewhere with that. But the big thing that I wanted to do is I wanted to make sure that I had the capability to do therapy, that I was going to be able to work with veterans afterwards on a one-to-one level, as well as doing research. So, my program is actually in the department of education, it’s not in the department of psychology, but because at the University of Buffalo, the psychology department is exclusively research focused. So if you’re getting the clinical psychology degree, you’re not doing direct intervention work.

Vocational Rehabilitation

11:13 Emily K: And so that was really important to me. And also, just the personality of the professors that I’d met and kind of the vibe I’d gotten from the program really felt like it was going to be a better fit for me. So that’s why I chose them. And then as you mentioned, so my funding, while I was an undergrad, I got really involved with the SVA, which is the Student Veterans of America club on campus. And so I’m talking to other veterans and I’m kind of, you know, getting to know like what they’re doing. And one of them who was also medically retired asked me if I had heard of this Voc Rehab program, which is the Vocational Rehabilitation and Education I think is the full title for it. And I thought that you could only use one or the other with the Voc Rehab or the GI Bill.

12:07 Emily K: And so I said, no, like I’m using the GI Bill. You know, I don’t qualify for that. And he goes, no, I use the GI Bill, too. And then I switched over. He’s like, you should at least apply and just see what they say. And it was a pretty simple online application. So I was just like, doesn’t hurt anything. And the requirements for it, which it’s a little different than anybody who served, who qualifies for the GI bill. So the Voc Rehab, you do have to have a disability rating of at least 10%, which on the spectrum is a pretty minimal bar to entry there. And so they agreed, let me come in for an interview, and then they do a face-to-face evaluation is really what they call it. And it’s looking at what jobs you’re trained or skills that you have currently, and where you would like to be.

12:59 Emily K: And one thing that I really appreciate about the program is it’s not just getting you a job, it’s making sure that you’re going to be fulfilled in what you’re doing. So even if in theory, you know, because I had the journalism background, I could have gotten a job doing something with that. But I knew that really wasn’t what I wanted to do. And so, because of the disability that I had, I can’t do something really, really physical. And so, we were able to kind of navigate that, and I got qualified to be in the program. And another thing that I really appreciate about the program is they’re very flexible, I would say. Like there are the requirements that are listed on the website as like, okay, it’s, it’s two years of funding, it’s dot dot, dot, dot dot. You have to do this, you have to be this, you can’t be out for longer than this time, but basically there’s an asterisk next to every single thing on the website that’s like, but it depends.

14:00 Emily K: And so again, with the whole shooting for the stars thing, once I got accepted into the program, my counselor who I was assigned to said, well, do some research, figure out, you know, look at salaries, talk to people, you know, really figure out what you feel like is going to not just get you a job that’s going to put you where you want to be, but you’re also going to feel content doing it. So again, I came to her on the day that I was supposed to kind of propose my path and I said, clearly I’ll be most fulfilled with a PhD, you know? And for whatever reason, again, stars aligned. And she said, okay. And so I got a waiver that instead of the two years, they covered an entire five-year program. So that was May of 2018. And that was the single best Christmas gift I’ve ever gotten in my life. I walked out of there crying, like unable to believe that that was the reality, like I felt so fortunate.

Timing with PhD Application

15:12 Emily R: So how did the timing of applying for the Voc Rehab program dovetail with your application to the PhD program? Like, were you already admitted to the program or were you then going to apply after getting the Voc Rehab, you know, funding?

15:25 Emily K: I got accepted to Voc Rehab first, and then I applied to the program. And so, and that’s what she said. She’s like, well, you know, this is all well and good that we will fund you. She’s like, but now you have to get accepted. And so, that’s where, because between the program, the Voc Rehab requirements, and then being landlocked because of my personal life, it was very much all my eggs in this basket, you know, and that’s why I had the backup plan of the master’s. Because I was like even getting a master’s funded is incredible. And I can still be a therapist and I can still counsel with the master’s. And if I were going to have to pay it out of pocket, that’s what I would’ve done was go the master’s route just for the opportunity costs, but between the two. But it’s all paid for, and I’m graduating completely debt-free. So, I couldn’t say no.

How Are Your Peers Funded?

16:23 Emily R: Yeah. So, as you said, that’s an incredible gift to be not just admitted to the program, but given, you know, 250% of the funding that you kind of were asking for initially, or thought you would get. So tell me a little bit about how your peers are funded. Because, I’m not really sure. You’ve said, you know, in the school of education, counseling psychology, so like, are your peers doing assistantships? Are they in fellowships? Are they paying out of pocket? How are they funding their program?

16:50 Emily K: Yes. So, I’m 100% the atypical weird one. You know, everybody else in my cohort is for the most part, either in an RA or a TA position. And it’s been a blessing in a number of ways because unfortunately, and I’m not sure if this is kind of the case across all of academia right now or just in my program, but most of my cohort members who came in with funding, it was promised for a year or two years. But then they were told it would be really easy to find other TA positions, other RA positions, you know, and it wouldn’t be a problem. And half of my cohort right now has unfortunately had to switch to actually taking on student loans because they just don’t have positions available. And so, it’s been so stressful for them. And it’s been kind of a different, I want to say like, a different bag than what they were sold originally.

17:52 Emily K: But it’s tough to watch, and it makes me even more thankful being in the position that I am in because it’s very secure. You know, if I take longer than five years to finish the program, then it’s on me. But as long as I stay in the timeline, then at least that is really, really consistent. I’m not worried about it. Grad school is stressful enough that I’m very thankful that it’s not also adding that burden on. And it’s been interesting, too, that because my funding is not coming from with in the program, and I don’t really have a, beyond being accepted in the program, I have an advisor who’s helping me with my research, but it’s almost more of a consultation role because I’m not doing any RA work for her or anything like that, that I have, I want to say, a lot more autonomy in a way than everybody else. You know, because there’s nothing in a contract that says I can’t work part-time, you know, and, you know, I’m not committed to doing 20 hours of whatever it is for a professor, you know, or grading, anything like that.

19:04 Emily K: And it’s been a blessing, especially because I’m coming into the program as a non-traditional student, you know, being older. My ex and I, we bought a house, you know, I had full life bills. And although it does provide a housing stipend, you know, it would be enough if I wanted to live the starving grad school life. But I’m thankful to be able, because I don’t have to work for the program, so I do have a part-time job as well. And so the supplement between that income with the stipend I get through my funding, you know, I’m able to kind of live my life a bit more comfortably than a typical grad student. And I think that that’s, I mean I’m busy, we’re all crazy busy, and it’s navigating 150 hours of work and you know, not that much time in a week. But there have definitely been points during the program, not related to funding, where I’ve taken the lead with my cohort advocating for different things, because I think there’s less of a power dynamic in my situation than there is in some of those. So it’s easier for me to kind of say, Hey, we would actually really like this or this isn’t, you know, working deadlines, timelines, different policies that they’re implementing. And so, I’m thankful that because of my funding situation, I am able to kind of stand much more confidently in myself throughout the program.

20:46 Emily R: So, I’m so glad that you’re like articulating this this way because I think this is actually much more widely applicable than just for your particular “I’m funded, you know, because of my veteran status,” like kind of situation. So because what I’m hearing is one, your peers are unfortunately experiencing this, you know, drying up of available assistantships. I’m assuming this is due to COVID, right? We’re recording this in January, 2022. So that sounds about the right timing?

21:10 Emily K: Correct. Yes. That’s the story we’re getting.

Autonomy and Advocacy

21:14 Emily R: Yeah. So because they were not, now, it’s interesting because when I talk with prospective graduate students, I don’t put a lot of emphasis on whether or not funding is guaranteed for five years or whether it’s like pretty much every one has funding for five years. It’s not explicitly guaranteed, but like the pattern is that we get people funded. It sounds like in this, you know, program, there’s been a big difference between those two, right? The expected path was not what turned out to happen. And because there was not a guarantee, you know, in writing whatever, your classmates were kind of left out to dry. Now, the advantage that you have because you know, the way that your funding, because it’s coming from a total third-party source, it sounds very much like having an external fellowship, which gives you, as you were saying, a lot more autonomy.

21:56 Emily R: You’re not beholden to like, you know, the grants or whatever that your advisor’s working on to have to do that particular kind of work. You can choose the work that you want to do. It’s more of probably more of a collegial relationship than like a, you know, boss underling kind of relationship with your advisor. And so I think that this just goes to emphasize the utility of having that kind of funding going into a graduate program. Yours is a little bit of a different source than most other people might have it, but I think the benefits are very similar. And I love that you’re, you know, you said you’re using this position of having a little bit more independence to advocate, to be the spokesperson, right? To kind of advocate on behalf of everyone. Because as you said, the power dynamics are a little bit different for your peers than for you. So, I’m really pleased with everything you’ve said, and it just sounds like yeah, that the benefits you’re articulating are also available to people with external fellowships, usually.

22:45 Emily K: 100%. Yeah. And that would be like, if you have the possibility to have any sort of external funding, that from my experience alone, I can’t speak for anything else, it seems very much the way to go.

Commercial

23:00 Emily R: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients. The next live Q&A call for the annual tax return workshop, How to Complete Your Grad Student Tax Return (and Understand It, Too!), is this coming Sunday, March 20th. It would be my pleasure to help you save you time and potentially money this tax season, so don’t hesitate to reach out. Now back to our interview.

Post-PhD Career Path: Working with Veterans

24:27 Emily R: So, yeah, I’m really glad to hear about sort of your experiential difference in your program because of this funding. Do you see this having an effect on your career later? I think you mentioned earlier that, you know, you either currently work with veterans or want to work with veterans, what do you see your future career path with this PhD?

24:45 Emily K: Yeah, that kind of has always been my bigger picture is wanting to give back to the veteran community. Especially because, you know, I could not have known making almost a slight impulse decision at 17 years old to join the military, all that I would’ve gained from it, you know. It’s really been the best dumb decision that teenage me ever made. But there’s also such a small percentage of veterans who have higher education degrees. And so being able to, you know, in the same way that right now I’m able to kind of help out and advocate for my other cohort members is being able to take that and advocate for the community by, you know, having that lived experience, but also having the legitimacy, I guess that comes from having a PhD. And through all of my pivoting to get to this point, you know, the first three years really after I got out of the military were tough, and I didn’t realize that everybody else kind of also struggled with the transition because I wasn’t talking to other veterans at that time.

26:09 Emily K: And I thought that I was the only one who was failing, you know, especially after I’d done quite well in the military. I got promoted really quickly. You know, I’m really good at kind of knowing what the expectations are and meeting them which does translate really well, I think into the PhD program too. So yeah, it’s very much my hope to continue working with veterans, particularly as they’re transitioning out, you know, and it’s figuring out the why of what they want to do, and who they are, and kind of what does that path look like for them, independently. And so I think, like I said, you know, being a veteran is definitely going to help with that path. But you know, even now, and I think if life takes me in a different direction than kind of what I’m expecting right now is, you know, on a very pragmatic level, there are hiring preferences in a lot of organizations for individuals that have a veteran’s status, especially in the VA, which is where I’m hoping to go.

27:08 Emily K: But most places there are kind of incentive programs for that. I’m not sure if the way in which I was funded per se will make a difference afterwards. But I think what we were talking about before with, you know, when you have that external funding and you’re able to kind of be more collegial with people and kind of work on, okay, how do I navigate this situation? How do I advocate here? How do I make change? I think I’m going to be going into the job market maybe with a little bit more confidence than I would have otherwise where like, okay, now I know what I’m bringing to the table. It’s not thank you for offering something to me. It’s like, this is what I’m providing. Okay. How can this be an equal relationship for both of us? So I think that more than I’ve maybe even thought before, until we’ve had this conversation, is definitely going to help, kind of, regardless of what that picture might look for me after I’m done.

Homeownership Eperience

28:09 Emily R: Beautiful. It’s very exciting! So, I want circle back to, you know, you mentioned earlier homeownership, and real estate is one of my favorite topics right now, especially for graduate students. So, I think that your path to homeownership is probably different and informed by your experience in the military. I just know sort of, I guess my stereotype impression is like people in the military sort of buy houses much more readily than people not do because of the easier funding mechanism through, you know the VA, just cultural differences, right? So, can you tell us briefly your experience with homeownership, and then how you think like someone, for instance, in your program, what would be the circumstances that would make homeownership a good idea for another PhD student, given your kind of different perspective on it?

29:03 Emily K: Sure, absolutely. Yeah. And you know, again, going back to all of the amazing things that have helped out from little teenage Emily’s decision to join the military is, so I do qualify for VA home loans which are amazing, because it’s a 0% down payment. And the whole process is pretty simple. And like you said, there is, I didn’t own a house while I was in the military, but many of my friends did, and it’s, you know, not a thing at all to kind of buy when you’re stationed here, you move a couple years later, you sell it, you rent it. You know, it’s very, very common to own a home. So there’s not, I didn’t have a big story built up in my head, I guess, of this being like a really major, big deal that I need to put five years of effort into before I do it.

29:54 Emily K: For better or for worse, frankly. You know, I think I now am much more intentional with kind of my financial journey than I was back then because, I think it’s getting better from what I’ve heard, but the military covers everything. And so you have this very strong sense of security. So you don’t have to think about your finances as much because it’s not not going to be there. And so now, you know, I’ve really kind of taken myself on a journey, and I’m much more intentional about the decisions I’m making and how I’m spending my money now. But I am thankful for that, I guess, lack of stigma of buying a house that I did see there. Because when I first moved to New York and I was working the job at the Y, the one reason I love the Buffalo, New York area is the cost of living is super low.

30:47 Emily K: And so, the year that I was there, it was substantially cheaper to buy than it was to rent. And because I didn’t need to have the down payment saved up, it was really accessible to just make that happen. And so, I bought a little renovated hunting cabin. It was 800 square feet. It was beautiful. I loved it. When I was working at the Y for that year, and it was only 20 minutes from St. Bonaventure. So it just worked out really perfectly to kind of transfer during my undergrad. And so, I lived there my entire undergrad degree time. And then when I met my ex-husband, I moved in with him and we rented it out for a year. And for me, because the financial component of it was actually not super impactful. Like, the mortgage was very affordable because it was so small. Repairs were affordable, too, when they happened.

Emotional Labor of Landlording

31:50 Emily K: And it was just, it was perfect when I lived there myself. But when I moved into the city and we rented the house out for a year, although the tenants were amazing, nothing happened terribly wrong with the house during that year, but that was also my first year of grad school. And I found I was just constantly worried when the shoe was going to drop. And when I was going to get a phone call that, you know, the roof had blown off, who knows. I don’t know, anxiety, that was my fear. And so, after that year, even though nothing happened, but it just, it added so much emotional labor that I was now needing to invest in grad school and everything else I was doing with my life, it just wasn’t worth it for me. You know, I’ve very much decided, you know, I have no desire to be a landlord in my life.

32:44 Emily K: And so I was able to sell it. I owned it for five years. So, it worked out as far as all of that. I didn’t make a lot of money off of it because I hadn’t put any money down. And the housing market had been kind of steady that whole time. But I didn’t lose any money. And so it really was kind of a wash for me in a positive way. So I loved the ownership, and then we purchased a second house, right as the program was starting. And it was great because we were dual income, you know, he’s been in the trades for 15 years, so he’s very, very successful there. He had roots there. We had planned on remaining in the area forever. So it wasn’t a matter of being concerned about, okay, what if I move for internship?

33:35 Emily K: You know, it doesn’t make sense to buy if it’s only a couple of years like that. And so it really was nice. I actually surprisingly got a lot of pushback from my program when I mentioned that we were house-hunting, just like, well, do you have time for that right now? Like how is that going to fit in with a PhD program? You know, like that’s, you know, people just seeming in awe, I guess, that we were going to buy a house, even though we owned two houses at that time. So I think there’s, at least in my experience, there’s kind of a stigma that when you’re in your program, you should not even consider anything outside of the program. It’s the blood, the sweat, the tears, and that is your life, and everything else just kind of should be on hold until you’re done.

Letting Go of Limiting Beliefs

34:29 Emily K: And I think that maybe it’s coming in from kind of later in life starting this program, maybe it’s just my personality. I don’t know, but it’s five years. Like it’s such a long piece of our lives that the thought of kind of putting everything else that you want to accomplish in life, in addition to this degree, on hold, that feels like an opportunity cost to me. You know, and that feels, there’s always going to be something that’s going to keep you, you know, make you feel like it’s not the right time to do something. And so if you can responsibly, you know, financially do it, I think it’s just all managing your priorities. And so, it worked out really great for us. We have since separated, and I will say now though, I rent an apartment and talking about the, you know, emotional labor of owning.

35:26 Emily K: It’s great. I don’t want to be a landlord. Renting right now, all my utilities are included. I get to come home. I don’t have to worry about house chores. Like, I mean, beyond cleaning, but repairs, anything maintenance, I don’t have to worry about any of that. My landlord lives next door. We have a great relationship, and it’s taken a lot of weight off my shoulders. And you know, I’m spending actually more money renting than I was when I owned on kind of a month-to-month level. But I think it’s just what you value, and what you want your life to look like. And then, you know, making sure that you are intentional about the financial side of it too, but not having that be the only piece of the puzzle, if you will.

36:17 Emily R: What I really liked about that, your perspective on this is, that it takes into account your personal preference on whether or not owning and like doing the maintenance and upkeep and blah, blah, all that other stuff, whether that is going to be exciting and fun for you or whether it’s going to be like a burden and you don’t want to have it on your mind. And I think, of course the financial component is part of it, but when you’re in a, you know, lower cost of living area and your stipend is sufficient, or you have a dual income or whatever, that owning is a financial option at all, then you get to get to that question of, do I think this will enhance my life, especially emotionally during this program? Or do I think it’s going to detract from what I have going on? It sounds like, you know, your peers or the faculty, whoever you’re hearing messaging from, they had the perspective that this is going to detract from your life and it’s going to detract from your effort in the program, whatever. But I think it very much comes down to your personality. And you’ve enjoyed it both ways, and you’ve experienced it both ways. So yeah. I just think it comes down to yeah. What your preferences are and not so much, of course the financial question is there, but the preferences matter as well.

37:20 Emily K: Yeah. And I think it’s really kind of leaning into that what do you really want versus what do you feel like you should do? You know, and I think that it’s easy to get in that trap of like, okay, right now I should be bleeding for this program, or I should be doing X or Y or Z. But then really taking a step back and being like, oh wait, is that, where am I getting that belief from?

37:48 Emily R: Perfect. Absolutely. In terms of like money mindset, and you would know a lot more about this than I do, but that’s one of those limiting beliefs, right? Like I can only do one thing well during this five-year period of my life. It has to be my program. I can’t, you know, have relationships. I can’t be working on my own physical and mental health. I can’t be a homeowner. I can’t work on my finances, all limiting beliefs. Don’t have to be true for you. You get to decide, as long as you’re, you know, cognizant of what’s going on in your own mind. So, love that.

Best Financial Advice for Another Early-Career PhD

38:18 Emily R: Let’s wrap up with the final question that I ask all of my guests, which is what is your best financial advice for another early-career PhD? And it could be something that we’ve touched on during the interview, or it could be something completely different.

38:30 Emily K: Yeah, so when I was thinking about this question, and I was thinking about it, obviously, because I’m still a student, so, you know, advice for other students per se. And the two things that came up, one is really kind of what we just wrapped up in right now is, you know, don’t be afraid to own your journey. And that it doesn’t have to be the stereotype you think it should be for being a grad student. You know, it’s making sure you’re asking questions. It’s recognizing that you are also like competent and capable, and you’re here for a reason. And so, realizing that we’re also bringing something to the table and like it’s okay to advocate for yourself. And that can be for, you know, financial things. It can be for anything that you might need. But I know, you know, even it’s shifted for me, even though we’ve talked about how much autonomy I have in my program, compared to some of my peers, it has been a slow shift over the last three years to kind of like feel comfortable being my own advocate in that way.

39:38 Emily K: Financial advice, like just flat out, I would say have a budget. Like I use the You Need a Budget software online. I’ve been using that for the last couple of years, and that has entirely changed my life is just being able to kind of give your every single dollar that you have a job. And make sure that it’s not just, yeah, just budgeting alone, knowing what you’re actually spending. And then, because you can use that once you have that knowledge, to then start deciding, okay, what do I value and how do I want to make this money work for me in whatever capability that I have at that time? And I think the other thing financial that, I don’t know, maybe, I think it’s because I’ve had to kind of go through teaching myself finances the last couple years and that I think about it a lot.

40:30 Emily K: I talk about it a decent amount, and it’s still taboo in most kind of societal circles. Just like, don’t be afraid to talk about it. Like, almost every single person that I meet, all of my advisors, all my supervisors and my practicum students, like I know how much they’re making, I know what their benefits are. Like, just because if you ask, people usually will tell you. And I’ve been using it to get more of a gauge of like, okay, what does this really look like if I were to pursue this position, you know, in this type of career, because there’s so much we can do with our degree? So having that knowledge of, okay, I kind of know how lifestyle-wise I want to live. And so, figuring out, you know, time, all the different components, but also is this going to fund how I want to be moving forward?

41:27 Emily K: And so, having that knowledge has made me feel much more confident in being able to eliminate some paths, and also kind of lean more into thinking about some paths. And all of my friends in my cohort look at me like I have two heads when I say I ask people about their finances. So that would be definitely my advice is, you know, like ask questions, do your own research. Don’t just always take at face value you know what maybe you feel like is the right answer with that.

42:04 Emily R: Yeah. Well, thank you so much! Thank you so much for giving this interview. I really love to have this like different perspective for anyone else who is considering a career in the military, has come outt of the military. Maybe, like you, it’s just through chatting with people that you find out about this fantastic, you know, funding source for graduate school. Thank you so much for giving this interview!

42:21 Emily K: Thank you so much!

Outtro

42:29 Emily R: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? I have collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

Financial Advice for Prospective PhD Students

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In this episode, Emily shared the financial advice for prospective and rising graduate students that she collected from current graduate students and PhDs. This financial advice can be applied all the way from when you are reading a grad school offer letter to when you’re matriculating into your PhD program. The topics covered include evaluating cost of living, side hustling prior to or during grad school, saving up cash, purchasing a home, and investing.

Links Mentioned in this Episode

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Teaser

00:00 Courtney: I really highly recommend using Emily’s savings bucket strategy throughout grad school to cover irregular expenses. About halfway through grad school, I started using the savings bucket strategy, which helped me feel a lot less stressed about money and my finances because when large expenses came up, I had a plan in place.

Introduction

00:25 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 11, Episode 5, and today I’m sharing with you the financial advice for prospective and rising graduate students that I have collected from current graduate students and PhDs. This financial advice can be applied all the way from when you are reading a grad school offer letter to when you’re matriculating into your PhD program. The topics covered include evaluating cost of living, side hustling prior to or during grad school, saving up cash, purchasing a home, and investing. This episode is kind of a sequel to Season 5 Episode 2, Healthy, Wealthy, and Wise: Choose a PhD Program That Will Support Your Personal and Professional Development. That episode was also designed for prospective graduate students and included advice from invited contributors on finances, grad student unions, professional development, mental health, and work-life balance.

01:28 Emily: If you’re already in or beyond grad school, would you please share this episode and/or the previous one so that it can reach its target audience? I’m sure once you listen through it, you will agree with me that the advice is invaluable. If you planning to start a PhD program in 2022 and would like to learn even more about the financial side of this process, I invite you to attend a couple of upcoming free webinars, part of my series Set Yourself Up for Financial Success in Graduate School. The March webinar is for prospective graduate students, and you can find more information at PFforPhDs.com/prospective/. The April webinar is for rising graduate students, and you can find more information at PFforPhDs.com/rising/. If you’re not sure what I mean by prospective vs. rising, listen through the remainder of this episode. I hope that you will join me for these webinars. I will show you how to start graduate school on the right financial foot.

Do You Even Need to Go to Grad School?

02:33 Emily: The advice in this section is for prospective PhD students, by which I mean people who have already applied to programs and perhaps received some acceptances and/or started interviewing, but who have not yet committed to a program. We’ll start with the advice collected from your fellow graduate students and PhDs.

02:53 Emily: Our first topic is do you even need to go to grad school? And this is the advice from Elyse K: “Figure out if a PhD is absolutely necessary to do what you want to do, and only go if it is absolutely necessary. It is worth delaying school to be absolutely sure–don’t get a PhD to figure out what you want to do! This is financial advice because there is a substantial opportunity cost to going to school full time for 4-6 years–even if you have a full stipend and tuition waiver you would probably make more working full time. If a PhD it isn’t going to serve you after you graduate, you’ll be financially better off without it.”

03:37 Emily: This advice from Elyse K is spot on, and it is something that you must listen to as a prospective PhD student, even if it’s unpleasant, because you’ve already committed a lot to this process of getting into a PhD program, I’m sure. Not just the application cycle, but the years leading up to that. But don’t be trapped by the sunk cost fallacy. It’s only going to get worse and worse if you enroll in graduate school and it’s not the right path for you. So as Elyse says, and I agree, be absolutely sure that the PhD is the right thing for your career, the right thing for your personal life and that this is the right time for it. Much better to bail now than halfway through a program or even all the way through your program if you realize that it wasn’t the right choice for you. If you want to hear more discussion of the financial opportunity cost of getting a PhD, please listen to my interview with Dr. Jen Polk from season seven, episode 14.

Reading Your Offer Letter

04:37 Emily: Our next topic is on reading your offer letter, your funding offer letter, from a graduate program, and Elyse K again says: “Don’t go into debt for a PhD. Find a program that will pay you or save up and cash flow school.” Again, I totally agree with Elyse. I am very hard pressed to think of a field in which you would get a PhD, but not be paid to it. Very difficult to come up with that. So of course, almost certainly you’re going to be receiving offers of funding along with your offers of admission. But to put a little bit more nuance on Elyse’s point, just because someone is offering you full funding, doesn’t mean you wouldn’t incur debt by going into that PhD program, because the offer of funding might not be high enough or consistent enough to keep you out of student loan debt, or alternatively having to side hustle. So I want you to really keep your eyes wide open when it comes to evaluating whether this program will actually keep you out of debt. Next up, we have a clip submitted from Shana.

05:42 Shana: Hello, Personal Finance for PhDs community. My name is Shana Slebioda, and I’m a staff member at a research university who works with graduate students. My advice for rising PhD students is to ask about summer financial support. Summer support packages may be different from during the academic year, especially if your support comes mainly from being a teaching assistant, also known as a TA. If your funding letter does not contain specifics about the summer months, be sure to ask. Talk to a faculty or staff member in your prospective program to get additional information. You can also talk to current students in the program to find out how they spend their summers. Do this early. Your first summer session will be there before you know it. And good luck.

06:36 Emily: This is absolutely vital advice from Shana. And again, I completely agree. Your offer letter, ideally, should tell you how you’ll be funded for the entire first 12 months of your program. So, if it doesn’t include details about your summer, as Shana said, you need to inquire about it. Both from, you know, the DGS [Director of Graduate Studies] or whoever’s offering you the funding package, and also with current graduate students to find out how funding typically works in the summer, or if it’s funded at all. But I want to extend this advice to say that it’s also very important to get an idea of your entire funding path through the PhD. Not just through the first summer, but your second year, your third year, fourth year, and all of the summers as well. Your program might or may not be able to give you super specifics about your situation. Maybe they can, maybe they can’t, but that’s where current graduate students come in very handy because they will tell you what from their experience and what they’ve observed among their peers about how people are funded or not throughout their time in the PhD program.

Evaluating Cost of Living

07:37 Emily: Our next topic is on evaluating cost of living for, I would say all of the programs that you are seriously considering attending. Julia’s advice is: “Ask current students about living expenses and estimate your budget. In some cities, to rent an apartment you might need to pay three to four months worth of rent upfront (first and last month of rent, broker fees, security deposit). You might need to consider having a roommate.” Again, the advice to talk to current graduate students is the best. They are going to be the people best positioned to give you the picture of how finances are working on the ground in this PhD program.

08:14 Emily: And I love the specificity of how much you might be asked to put up to rent an apartment. This is very, very city-dependent. I’m guessing Julia may live in Boston or New York. Certainly there may be other cities that operate the same way, but yes, it can be very expensive to get into your first apartment. In some cases, up to four months of expenses, in some cases less, it’s just going to be really city dependent. So it’s something you need to investigate possibly before you commit to a program, but definitely at the point that you do commit to a program.

08:44 Emily: We also have some advice from Ben: “You can pretty much have a successful research career anywhere you end up. So don’t let thoughts about potential research advisors overshadow comparisons of cost of living and stipend when considering programs.” I wish that I had heard this advice from Ben when I was in this phase of being a prospective PhD student, because I absolutely number one was picking my program based off of the potential research that I could do there. The advisor that I would have, the resources that the program had at its disposal, these kinds of things. So I was really not giving any thought to finances or other personal considerations that I now know are very, very important to have you know, in the mix in your decision-making.

09:29 Emily: And so I now definitely agree with Ben that yes, the research considerations are very important, but so is understanding what your lifestyle is going to be financially during your time in graduate school. And so are a lot of other things you might call personal factors. So they all should have a place. And don’t forget that your finances and these other personal factors will affect how successful you are in your program. So these are not, you know, disconnected from one another. If you are super stressed about money, or if you have to go into debt or side hustle, it’s going to affect how well you perform in your research career and potentially how long it takes you to graduate. So, as I said, all the factors should go into the mix.

Working Before or During Grad School

10:13 Emily: Our next topic is on working, either in this period of time between now and when you matriculate or after you matriculate. Our first piece of advice is from Gillian Hayes: “Work as much as you can in paid positions before returning to graduate school to save money to bridge the difficult times during the PhD. You may also make connections that will allow you to do side hustles or internships during your program.” Coming into graduate school with cash savings sets you up as best as possible to have a strong financial position. When I think about people who start graduate school without cash savings, or maybe even with, you know, incurring some credit card debt because of those moving expenses, you’re sort of thrown onto your back foot financially, like you’re off balance.

11:03 Emily: It’s not a strong position to start in. And of course it’s necessary in many cases, but I like Gillian’s advice. I agree with it. If at all possible, work before getting into that PhD program to generate cash savings so that you have money for moving, so that you have money for start up expenses. And so that you don’t have financial stress at the same time you’re trying to get started in your program. I also totally agree with her that working certain kinds of jobs will help you in your career that you’re trying to pursue during your PhD, and things like internships and side hustles can be part of that. If you’d like to hear more from Gillian, and I know you would, you can listen to her full interview in season six, episode six.

11:45 Emily: And here’s some advice from Nell: “Consider having another job. When I went to grad school, I went part-time with my previous full-time job. I’ve done it during school for 4 years now. I’ve noticed among my friends and colleagues that it’s the grad students who have second jobs who seem happier and mentally healthier, and have less trouble meeting their deadlines and keeping grad school anxiety in perspective. Obviously, you should keep monitoring yourself to see if it’s sustainable or the right choice for you. I have moments where I feel overwhelmed. But I have a lot less anxiety about grad school since it’s not my entire professional identity and I’m not taking a huge pay cut to be here. I see people who have never held another job applying for academic jobs and facing the possibility that they will not get anything permanent or well-compensated, even though they are excellent at what they do. They don’t know how to pivot and are doubting all their choices. It’s not their fault; it’s the market. But I see having a second job as a hedge against the kind of personal and financial crisis that comes in those circumstances.”

12:46 Emily: I think it’s really going to depend on your program and your field, whether holding a concurrent second part-time job is feasible, and also of course your personal responsibilities as well. So it seems to be working for Nell. And of course, she has great advice by saying keep monitoring yourself to see if it’s sustainable. So I don’t know if like a full like part-time job, like 20 hours a week or something is going to be right for everyone. But I do agree with her that it does lessen anxiety related to graduate school when it’s not, as she said, her whole professional identity or even identity generally. And so I do think it’s really healthy to have a side hustle or some kinds of side pursuits during your time in graduate school, because it does give you a break from all of your focus on your PhD.

13:33 Emily: It may give you another source of income, which can help with financial stability. So there are lots of positives to it. The drawbacks being of course, the time management aspects, the energy management aspects. So, you have to know yourself in this respect, but I do think it’s well worth considering. So if you have currently a full-time job that it’s possible to keep working for that employer part-time, either on still an employee basis or maybe a contractor basis, I think that’s worth having a conversation, it’s worth a tryout, of course, given that it would be allowed by your graduate program. Now, some graduate programs do bar outside work or outside work of a certain type or above a certain hourly commitment. So you have to be careful about that, but I do like the suggestion. And alternatively, if you’re not in a full-time job that you would, you know, consider taking with you in some capacity into graduate school, the next suggestion is to develop some kind of side hustle during these months between now and when you matriculate that you’ll be able to take with you into graduate school.

Emily’s Best Advice for Prospective PhD Students

14:28 Emily: My best advice for prospective PhD students is to 1) interrogate your offer letter, and 2) compare your actual salary to the local cost of living. What I mean by interrogate is that there’s a set of about a half-dozen financial questions that you need to have answers to regarding your funding package to fully understand what your finances will look like during your PhD program. One example is how much of what is listed as your stipend in your offer letter will you pay in tuition, fees, and/or your health insurance premium. You need to subtract those mandatory fees from your stipend to see what you’ll actually be paid before taxes. If your offer letter doesn’t provide all the answers, you’ll need to ask the questions of the program’s administrative staff.

15:12 Emily: However, the absolute stipend numbers are not the whole picture. Obviously, $30,000 is going to go a lot further in West Lafayette, Indiana than Seattle, Washington. You need a way to normalize the stipend to the local cost of living. The first-pass way that I suggest you do this is to use the numbers in the Living Wage Database from MIT at livingwage.mit.edu. You can divide each stipend by the local living wage to get an idea of how much purchasing power the stipend will actually provide.

15:48 Emily: I suggest making a spreadsheet to keep track of all these factors, and in fact I will provide such a spreadsheet in my upcoming Set Yourself Up for Financial Success in Graduate School webinar for prospective graduate students. In this webinar, I’ll expand on what I stated above and cover additional timely topics, including one that is almost taboo in academia. The webinar is free and you can find more information and how to sign up at PFforPhDs.com/prospective/.

Commercial

16:19 Emily: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients. It would be my pleasure to help you save you time and potentially money this tax season, so don’t hesitate to reach out. Now back to our interview.

Cash Savings for Rising PhD Students

17:35 Emily: The advice in this section is for rising PhD students, by which I mean, people who have committed to attending a particular PhD program, but have not yet matriculated. We’ll start with the advice collected from your fellow graduate students and PhDs. Our first topic is the necessity of cash savings. Our first piece of advice is from Elyse K: “Adjust your budget now to your stipend income and save up to make sure you have a substantial emergency fund (more on the 6 months of expenses side than 3 months). Many universities only offer students crappy or expensive healthcare plans. Hopefully, you are healthy over the next four-to-six years, but knowing you can cover a high insurance out-of-pocket maximum without additional debt is comforting.” This is definitely great advice, especially if you’re currently working and living on a salary that’s higher after adjusting for cost of living than the stipend that you will be on in just a few months. So, it’s great advice. Live on that future stipend and save everything you can in between now and then. I also love that she points out the importance of having an emergency fund and yeah, knowing your insurance benefits. So knowing what your deductible is, what your co-insurance responsibilities are. You can find out this information now to start preparing. Next, we have a clip from Courtney.

18:57 Courtney: Hi, my name is Courtney, and last year I graduated with my PhD in microbiology. My biggest piece of financial advice for grad school is to set up an automatic transfer after you get your stipend payment to a separate savings account for paying taxes if you do not get income taxes withheld from your paycheck, which I know many graduate fellowships do not. This way, the money is already allocated when it comes time to pay quarterly estimated taxes, or when you file taxes in the spring. And jumping off of that, I really highly recommend using Emily’s savings bucket strategy throughout grad school to cover irregular expenses, such as large purchases, maybe medical deductible payments, or friends’ weddings. Also, it’s important to save for an emergency fund, maybe a pet fund if you have a pet, and planning for fun thing as well, such as vacations. About halfway through grad school, I started using this savings bucket strategy, which helped me feel a lot less stressed about money and my finances because when large expenses came up, I had a plan in place. I used this strategy to save for a month’s worth of living expenses to cover a month gap in between when I finished my PhD and when I started my new position, and I also was able to save up for a vacation to celebrate my graduation and really treat myself after completing my PhD.”

20:34 Emily: I love that Courtney gave us these specific examples of how targeted savings buckets can be used. For her, it was paying her taxes and also saving up to cover an income lapse and saving up for a vacation. I love that she said it made her less stressed. If you’d like to learn more about this savings bucket strategy, I devoted a whole podcast episode to it. It’s season seven, episode 15: How to Solve the Problem of Irregular Expenses. It goes beyond just having an emergency fund to preparing through saving for other large irregular expenses like taxes, like having to buy flights, like having to replace your computer or buy furniture or any other large purchases you might have to make. Specifically on the topic of taxes, it’s very important for you to know sometime before you matriculate that it’s pretty likely that at some during graduate school, you are going to be funded through a source of what I call awarded income. It might be called a fellowship or a training grant or a scholarship or some other kind of award that pays your stipend.

21:38 Emily: And if that is the case, most universities will not withhold income tax on your behalf the way they do for employees. You may be an employee at other points in your graduate career, like having an assistantship. But if you’re ever not an employee, then that income tax withholding may not be offered to you. And if that is the case, you will be responsible for making your own tax payments manually, whether that’s up to four times per year through the estimated tax system, or in one lump sum when you file your tax return each spring. So as Courtney said, it’s really important to save up for those tax bills. I like to call it, setting up a system of self-withholding. So you’re sort of simulating the withholding that would be done by an employer if you had one by doing, as she said, these auto-transfers. Every time you receive a paycheck, set up an automatic transfer to go into your designated tax savings account for an appropriate amount of money. If you’d like more detail about how to do these calculations around taxes or the system of self-withholding, I have a whole workshop devoted to it, which you can find at PFforPhDs.com/QETax, that’s for quarterly estimated tax. And this is something that I wish every matriculating graduate student was told during orientation that estimated tax is your responsibility, potentially, if you are on one of these non-W-2, non-employee sources of income.

23:03 Emily: And our final piece of advice regarding cash savings is from Julia: “Try to save even a little bit and put the money away for savings and/or retirement investments. Learning about investing can be overwhelming, but you can start with passive investing in a couple of general ETFs (e.g., tracking S&P 500 and international stocks for diversification) and learn more as you go. To avoid overwhelm, allocate fixed time slots to learn about finance, e.g., 1 hour per week. Eventually, you’ll become more comfortable.” I mean, of course, I totally agree with this advice from Julia. It’s kind of everything I do in my business teaching about personal finance, and I especially love talking about investing with graduate students and postdocs. It’s very easy to get started with passive investing. It’s very easy to manage investments passively. So it’s something that can be completely compatible with your journey as a graduate student, as long as your finances are ready for it. I would say it’s more important to build up some of the emergency and buckets we’ve been talking about and pay off high priority debt, like credit cards, before getting involved with investing. But once your finances are ready for it, it does not have to be a big time suck for you. So that’s great advice from Julia.

Homeownership

24:17 Emily: Our next topic is homeownership. This is one of my favorite new topics to be talking about with graduate students and early-career PhDs. Here’s the advice from Nell: “Seriously consider home ownership EARLY in your program. Emily and her brother have covered this on the podcast, but you ideally need 3 years of funding remaining. I bought a place at the beginning of my second year. The second job and the 5 years of continuance made it easier to get a mortgage. Meanwhile, I have a friend in his 5th year, now in the process of buying a place, and he found out about the 3-year continuance rule very late, causing an extremely stressful family situation and problems with his department, who he had to beg for a letter promising him more funding. While there have certainly been stresses with my place (roof, plumbing) which I am privileged to be able to deal with, the fact that I can go away for research and rent it out rather than have to pay two rents or put all my stuff in storage means that I am able to be much more mobile and flexible as I design how I will spend my time researching and writing the dissertation. Again, this is about peace of mind and mental health as much as financial security.”

25:23 Emily: This advice from Nell is so valuable. Now, I have to say, first off, many graduate students are not in a position to buy. The vast majority of graduate students are not in a position to buy a home, because several factors have to come together kind of perfectly. You have to live in a housing market where the home prices are not very, very high. You have to have a stipend that is high enough to manage to, you know, qualify for a mortgage in that market. And you have to have some savings place for the down payment and the closing costs, moving costs, these kinds of things. And you have to have good credit. So these things all have to come together. But for some graduate students, it is possible.

25:58 Emily: And if you think you may be in that situation, you should definitely investigate it early on. I have done several podcast episodes with my brother, Sam Hogan. He is a mortgage originator with Prime Lending (Note: Sam now works at Movement Mortgage) who specializes in graduate students and PhDs. And he knows all the ins and outs of qualifying for a mortgage, even when you have non-employee income fellowship income, which for some lenders is unfamiliar. The podcast interviews that I’ve done with Sam in the past are season five, episode 17, How to Qualify for a Mortgage as a Graduate Student or PhD, Even with Non-W-2 Fellowship Income, and season eight, episode four, Turn Your Largest Liability into Your Largest Asset with House Hacking. Those are really exciting episodes to listen to, but I do want to tell you there have been some updates, especially to the content that Nell just talked about. So, we used to think there was this necessity to have three years of guaranteed funding when you had a non-W2 type position as a graduate student or postdoc, but Sam has actually found a way kind of around that in some cases.

27:00 Emily: So, I would say it’s very helpful to have three years of continuance, but not strictly necessary for everyone. So the best thing to do is to talk to a mortgage lender like Sam, or like someone else who’s familiar with PhDs and graduate students, and get their perspective on your income type and your whole like picture to see whether or not you would be able to qualify for a mortgage. Check out the Personal Finance for PhDs’ YouTube channel for some of those like short updates. I’ve been publishing clips from the live Q&A calls that I’ve been hosting with Sam for first-time home buyers. If you’d like to learn more about that, go to PFforPhds.com/mortgage to find out when the next live Q&A call will be. By the way, if you want to reach out to Sam directly, the best way is probably to text or call his phone number, which is (540) 478-5803. Or you can email him at [email protected].

27:59 Emily: I really love Nell’s perspective in this advice of having it be an ease on her mind and her finances to own a home versus renting when she has to be away for research purposes. Like I never thought about that before. So I’m really glad to get Nell’s perspective on this. I’m really glad that it’s worked out for her. Elyse K also added this advice: “If you’ve been working full time and it is the right time for you, consider buying a home you can afford on your stipend before your full-time income is gone because it will be easier to get financing.” Again, you can hear a lot of concern about qualifying for a mortgage as a graduate student. It is an area of concern, but Sam can help you with this specifically if you want him to. But Elyce’s advice is really good. If you are going from a full-time job into graduate school, and especially if you’re not moving cities, getting that mortgage and the home purchase done before starting graduate school is a good idea. But as she said, make sure you can afford it on your stipend, not just your current salary.

Working During Your PhD

28:54 Emily: Our next topic is working while you’re pursuing your PhD. So, Gillian has this advice: “Intern. No matter what your field, there are internship opportunities. This will provide insight into non-academic career paths as well as extra money during your studies.” I could not agree with Gillian anymore about this. Internships are becoming much more widely available and acceptable to do during a PhD, which is wonderful. And they often pay more than the, you know, stipend that would be getting during that time anyway. Again, listen to that previous episode that I did with Gillian and also check out season seven, episode seven, where I interviewed a current PhD student who did a very well-paid summer internship with a tech company, and that worked out very nicely for her finances.

29:42 Emily: But really, Gillian’s point about gaining insight into non-academic career paths is the invaluable part of this. Like, yes, the money is nice, but while in graduate school, you are setting yourself up for your future career, and doing internships and other kinds of work opportunities do serve that goal just as much as your PhD studies do. And this advice is from Elyse K: “Consider finding or starting a side hustle within your university’s boundaries (many allow <20-hour per week part-time positions). Part-time income can make or break PhD students; I’ve seen some have to drop out because they need money.” Again, really solid advice. It should not be the case that graduate students need side hustles or need student loan debt to financially get them through graduate school. Yet this is the reality for a lot of people, or if not strictly necessary, sometimes side hustles can just enhance your lifestyle and make things a little bit better for you during graduate school. Whatever the reason, I think side hustling is a great idea, but of course you have to make sure that it’s not interfering with your progress towards your degree. That is primarily what you are in graduate school to do.

Financial Assistance as a Grad Student Parent

30:54 Emily: Next, I have some great comments from an anonymous contributor who is a graduate student parent. “Even if you think you do not qualify, consider applying for income assistance programs such as SNAP, Medicaid, and other DHS programs for needy families. Generally, students enrolled over half-time do not qualify for SNAP, but if you have any of these exemptions, there’s a chance you’ll qualify. Some exemptions include: Are under age 18 or are age 50 or older. Have a physical or mental disability. Work at least 20 hours a week in a paid, on-the-job training program. Work at least 20 hours a week in paid employment. Participate in a state or federally-financed work study program. Participate in an on-the-job training program. Care for a child under the age of 6. Care for a child age 6 to 11 and lack the necessary child care enabling you to attend school and work 20 hours a week or participate in work study. Are a single parent enrolled full-time in college and taking care of a child under 12.”

31:50 Emily: “With children you may also qualify for state funded childcare, children’s health insurance, and possibly even income supplementation. These are often wrapped into the same application at your state’s Department of Health and Human Services website, making it much simpler to apply for all at once. You never know until you apply, and you just might be surprised. Every dollar helps! Every so often you will need to reapply or get re-certified so you’ll be asked to update your information periodically, so always look for these very important mailings once you’re involved in any assistance programs or you could risk losing coverage for not responding in time.”

32:22 Emily: Super appreciative to anonymous for submitting these comments. This is not something I had personal experience with during graduate school, so I really appreciate, you know, the community member stepping up to speak to this situation. In season two, episode one, I published an episode with Lauri Reinhold [Lutes] who was a single parent during graduate school. And what came through in that interview was how intentional Lauri was in choosing her graduate program, choosing one that would be supportive of her needs as a graduate student parent, and then also applying for every single benefit she possibly could on behalf of herself and her daughter once in graduate school. So that’s another great interview to follow up with to learn more about this topic if you are a parent or are planning on becoming a parent.

Final Pieces of Advice

33:05 Emily: And for our last topic, we have a really quick piece of advice from Ben, which is: “Read The Simple Path to Wealth by J.L. Collins!” So this advice is on investing again and how relatively accessible it is. I read The Simple Path to Wealth myself about a year ago, really enjoyed it. J. L. Collins is a really easy person to read and understand all about index fund investing, passive investing. So, highly, highly recommend that book as well. And thank you, Ben, for that advice.

33:34 Emily: My best advice for prospective PhD students echoes some of what you just heard, and it’s to work between now and when you matriculate to save up cash for your move, startup expenses, emergency fund, et cetera. If you’re already working a well-paid full-time job or have existing cash savings, that’s awesome, and you’re on a great track. If you are currently a college student or have a not-so-well-paid job, like I did before grad school, it’s time to think about how you can increase your income over the coming months so you can save. Can you do a paid internship? Can you get a full-time temporary position with a good pay rate? Can you start a side hustle, ideally one that you can take with you to graduate school? I love flexible self-employment side hustles for graduate students, such as consulting, freelancing or teaching, but it can take time to build up a client base, so start laying that groundwork now, or at least over the summer.

34:31 Emily: We’ll expand on this topic in my next Set Yourself Up for Financial Success in Graduate School webinar for rising graduate students. We’ll also go deep on the financial decisions you’ll have to make this spring and summer that can literally make or break your finances during grad school. And I’ll give you some guidance on those. The webinar is free and you can find more information and how to sign up at PFforPhDs.com/rising. Thank you for listening through this episode, and a special thanks to those who contributed their best financial advice. Before you go, don’t forget to share this episode with a prospective PhD student, and if you want to join me for the upcoming webinars in my Set Yourself Up for Financial Success in Graduate School series, you can find more information at PFforPhDs.com/prospective/ and PFforPhDs.com/rising.

Outtro

35:28 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? I have collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

This Grad Student’s Side Hustle Is Trading Options

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In this episode, Emily interviews Min Sub Lee, a 4th year PhD candidate in Molecular and Medical Pharmacology at UCLA. Over the past year, Min Sub has developed a side hustle in options trading, which is selling or buying the option or right to sell or buy stock. Min Sub teaches us what covered calls, put options, and put-credit spread options are. He shares how he learned this technique and why he thinks it’s a good fit for a graduate student’s budget and schedule. Min Sub keeps this strategy low-risk by limiting it to only a small fraction of his investment portfolio and making small, consistent bets. This content is not advice for financial, legal, or tax purposes, and if you are interested in options trading, please do extensive research before you begin!

Links Mentioned in this Episode

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Teaser

00:00 Min Sub: You know, as long as you’re consistent, as long as you are committed to your goals, I really think that in the long picture, right, the money will compound on its own. And you know, I am a very strong believer that anyone can, you know, achieve great wealth, no matter what kind of income you’re making. I personally think that as long as you have the right mindset, as long as you have the right strategy for it, then anyone can do this. That includes grad students.

Introduction

00:31 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 11, Episode 4, and today my guest is Min Sub Lee, a 4th year PhD candidate in Molecular and Medical Pharmacology at UCLA. Over the past year, Min Sub has developed a side hustle in options trading, which is selling or buying the option or right to sell or buy stock. Min Sub teaches us what covered calls, put options, and put-credit spread options are. He shares how he learned this technique and why he thinks it’s a good fit for a graduate student’s budget and schedule. Min Sub keeps this strategy low-risk by limiting it to only a small fraction of his investment portfolio and making small, consistent bets. This content is not advice for financial, legal, or tax purposes, and if you are interested in options trading, please do extensive research before you begin! I have a new little project that I’d love for you to participate in! I’m crowdsourcing information on what tax forms are being issued for various fellowship and training grant funding sources. I’ve published an article with the data I’ve collected so far at PFforPhDs.com/taxform/. So if your stipend or salary was from a fellowship or training grant issued from the NIH, NSF, Ford Foundation, DoD, DoE, Hertz Foundation, Paul and Daisy Soros Fellowship Program, Life Sciences Research Foundation, American Association of University Women, etc., or an internal fellowship source, please fill out the survey linked from PFforPhDs.com/taxform/ to help out other people with the same type of funding who are confused about the tax form they received or lack of tax form. Thank you! Without further ado, here’s my interview with Min Sub Lee.

Will You Please Introduce Yourself Further?

02:32 Emily: I am delighted to have joining me on the podcast today Min Sub Lee. He is a current graduate student at UCLA, and we are going to discuss options trading, which is a form of investing that I know nothing about. So it’s very exciting for me to get to learn alongside probably many of you listeners. So Min Sub, would you please introduce yourself a little bit further for the listeners?

02:51 Min Sub: Yeah. Hi, Emily. Very nice to meet you. It’s very good to be here. My name is Min Sub. I’m currently a fourth year PhD candidate. I’m currently studying molecular and medical pharmacology at the University of California, Los Angeles. And I am very passionate about financial education, financial literacy, and hopefully I can provide some good value to my audience who may not be familiar with how options work and you know, all that good stuff.

What are Trading Options?

03:17 Emily: Yeah, sounds great. I am definitely in that audience. So, as longtime listeners know, I am a dyed in the wool passive investor. I set up my investments a decade ago and have not touched them since, because I’m very happy with how things are going. So, actively investing is not something that I do and it’s not something that I teach, but of course I want to learn about it, and I’m happy to share the information with the listeners as well. So, Min Sub, let’s start with what are options, and how does this differ from what we might otherwise think of as like stock trading?

03:50 Min Sub: Yeah, absolutely. So basically most of us are probably familiar with the concept of buying shares of a company. So essentially when we purchase, let’s say 100 shares of, you know, your favorite company, you know, let’s say McDonald’s or something, or, you know, Walmart or Target. Well, that basically means that you are essentially part owner of a company’s equity. Now, options are something that I honestly never considered doing until this year. Because you know, you might hear in the media saying that, well, you know, people have like based lots of their money on options, right? People basically, you know, put their entire life savings into options. They basically lost it all. So options really have a very negative sort of like vibe on overall market trading. But I actually wanted to, you know, change that sort of like sentiment today because options training can actually be very profitable and very, very safe if you do it correctly.

04:46 Min Sub: Right. So, essentially what options are is that options are basically a right or some kind of a contract to buy or sell typically 100 shares of a company. So here’s an example that I usually tell my friends whenever they ask me, you know, about options. So, let’s say that you are a home buyer, and I am a home seller, right? So, I currently own a house that is currently selling for about $500,000 right now. And you are interested in buying my house. However, you currently do not have the full $500,000 in cash, but you are willing to essentially have the right to buy my house. So, let’s say that you pay me $100,000 of quote unquote premium, and what the premium states is that you basically ask me if you can buy a $500,000 house for $200,000 with a $100,000 premium.

05:49 Min Sub: And essentially how that works is, you know, typically when we have those contracts, we set some kind of a contract date and some kind of a strike price. So essentially let’s say in three years, even if my house let’s say appreciates to 1 million dollars, because you have a contract with me stating that you have the right to buy my house for $200,000, essentially you could buy my house at a total of $300,000 if you add up your initial premium plus the amount that you want to pay for. So that is, in a nutshell, how options work. And, you know, obviously things can go wrong both ways because you know, my house can easily collapse to, you know, $0, right? So in that case, you know, then your premium might be deemed worthless. But at the same time, you know, like if my house appreciates to, you know, 10 million, right, then you can technically, you know, buy my house for the premium price that we’ve sort of contracted for.

06:44 Min Sub: Now, the truth is, for the most part, people who buy these call option contracts, many of these premiums expire worthless. And what that means is, typically what happens is, you know, like either the price did not appreciate in value as they wanted, so basically their contracts become worthless, right? Or, you know, the other concept is that sometimes over time there’s a concept called data decay, which means even if you hold an options contract for, let’s say three years, if you do not exercise that contract for some time, the data decay essentially can actually wear off part of your option contract on a daily basis. So, essentially people’s contract just becomes worthless, one because the actual security price doesn’t appreciate, or because of the fact that data decay has essentially just devalued the entire contract on its own, and your premium is just deemed worthless at that point. So, there are different ways how people can exercise options. But typically, you know, I say about 90% of the time, you know, people who own call options typically are on a losing streak, but you know, in the end they’re not losing a lot of money because they’re only paying a small premium to essentially have the contract, if that makes sense.

07:55 Emily: I see. Yeah. So, it does actually, and I’m not sure how familiar the listeners are with this, but I don’t know the stats on this exactly, but it turns out that like over the many, many decades, you know, 90 plus percent of the value that’s been created in the U.S. economy is coming from like the tail end of stocks that have done like incredibly well. Whereas the vast majority of companies either like break even, or lose money like over the long-term. And so it sounds similar to that. So like a lot of the bets that you’re going to make if you enter into this are going to not turn out in your favor, but because you’re making small bets, you only have to win big a certain percentage of the time to overall come out ahead.

08:35 Min Sub: Exactly. Yes. Which is why, you know, when people typically buy options, they only, you know, play with a very small percentage of their portfolio because it is money that people can live without,k right? But, you know, if the country goes well, then people can make lots of money in that sense. Right.

Safer Ways to Approach Options Trading

08:50 Emily: Okay. So I think we have the basic idea of what options are. So then how do you approach options trading in such a way that you think you’re going to come out ahead mostly?

09:03 Min Sub: Right. So, I mean, there are different ways to win in options trading. So how about this, let me start with actually some of the safer ways to start options? Because I think, you know, most people still think of options as a fundamentally evil thing, and they just sort of, you know, fear losing a lot of money. And that is, you know, not wrong. You know, if you play options really incorrectly, if you really think that you could sort of win big with options, right? You’re not thinking in the right mindset, right? Because in the end, options should be only about 20% max of your total portfolio. For me, you know, I only play with maybe 10% of my total you know, security asset portfolio, mainly because I know that if I lose that 10%, you know, I’m not going to lose my sleep on that, right?

09:46 Emily: If I heard you correctly, what you’re saying is that about 90% of all the money you have available to be invested is not invested under this strategy. You’re doing maybe a long-term diversified index situation, probably?

10:00 Min Sub: Correct.

10:01 Emily: Okay. Good to know. Okay. So we’re talking about this fraction of your portfolio, and the strategy that you’re using in that. Please continue.

Strategy #1: Covered Call Option

10:07 Min Sub: Correct. Yes. Yeah. So there are actually three sort of strategies that I adopted on options. And I really think that these strategies are very, very useful for anyone to get started. Mainly because, first of all, they’re risk-free, right? Technically, there are still some risks to options. So, I mean, don’t think that this is actually something that’s guaranteed to make money, because if you do it incorrectly, you will lose part of something. So, the first strategy I’m going to talk about is actually a strategy called a covered call option. So, how this works is, the one requirement that you have to have for this strategy is that you must own 100 shares of some security, some stock class. And basically, here is what’s happening. So let’s say that you have these 100 shares of a company or of some stock, and this stock has not been moving for the past year, or this stock basically has been trending sideways.

11:02 Min Sub: You know, maybe it’s been swinging up and down, but maybe like plus or minus two to 5%, you know, on a flat basis, right? And you know, like you’re looking at your other, you know, stocks like Tesla, you know, and like other big stocks and, you know, you’re jealous because you kind of want to, you know, like start liquidating some of this and start to, you know, maybe consider putting your money into asset classes that actually do appreciate more value. So instead of doing that, right, which I don’t recommend, you should never just jump and just liquidate your cash just to jump on a hot stock just because it’s moving up like 20%, you know, on a weekly basis. But essentially how cover calls work is you can basically kind of say that I think that the current stock that I’m owning is not going to go above 10% of value in the next certain time. Right?

11:55 Min Sub: So let’s say that, you know, by next month, by December 3rd or something, right? You know, my hundred shares, I do not expect these shares to go above a certain price. So what we can do is we can actually sell a covered call and receive a premium. So, basically I am kind of betting that because I sort of know on a high trends basis that I don’t think that these shares will go above a certain strike price, I am willing to sell a covered call option on my current shares. And with that, you can actually earn roughly between about two to 3% of your current assets. So let’s say that you own about 100 shares worth of, you know, your favorite stock. Pinterest, let’s say, right? And, you know, you currently have about, let’s say $5,000 worth of Pinterest.

12:46 Min Sub: And, you know, you can sell a covered call option and receive about, you know, two to 3% of your current holdings. And if your bet is correct, right? If you’re correct in a sense that Pinterest did not go above 10% in value, then you’re basically going to keep that premium, right? You’re basically going to keep your current shares, and you’re also going to keep the premium, and we can actually do this on a weekly basis because we can actually sell a weekly cover call options on your securities. So essentially, you know, for stocks that you believe that you don’t really expect them to move on a really volatile basis, then this is a very good strategy to actually sort of earn passive income. It’s kind of like earning dividends, you know, on your stocks, right? To an extent. Now, the downside, you know, of course, is Pinterest might all of a sudden skyrocket, right?

13:38 Min Sub: You know, there might be really good news, you know, something, let’s say there’s an acquisition purpose. And, you know, like Pinterest might literally go up 30%. Well, in that case, you’re kind of screwed because you promised to sell 100 shares of your security at a specific strike price. And if the price of Pinterest has gone up way over your strike price, then there’s a high likely chance that you’ll be called out, which means, you know, you will still get your premium, but you’re forced to sell your 100 shares of a company at a target price. So typically selling a cover call is a very good viable option for stocks that typically don’t move too much. You know, stocks like Apple, like Microsoft, you know, these stocks that tend to have a very low volatility and, you know, stocks that typically have very low, you know, like ups and downs are very good ways to actually utilize cover call options as a strategy. I’ve been using this option for quite a while, and I’ve made pretty decent income. And so far, I have never got called out yet. So hopefully I can, you know, stay that way for next, you know, whatever years I continue to do options.

14:50 Emily: With that example, is the price that you agree to sell that stock for what you’re calling the strike price? So like, in your example, it was that like 10% above wherever the price was when you made this bet?

15:02 Min Sub: Correct.

15:02 Emily: So I guess what I’m thinking is, for you as the person who is, you know, currently owning these hundred shares, basically you get money if your stock doesn’t move that much, or if it goes up quite a lot, you still get more than you had in the first place, because you’re selling at that slightly higher price. It’s just not as high as it could have gone had you never put that, you said it’s a covered call, right?

15:26 Min Sub: Exactly. Perfect. Exactly.

15:28 Emily: Yeah, so I see the attraction here.

15:31 Min Sub: Yeah. So like I said, right, it’s very good for stocks that don’t really have a high volatility because you know, if your stock goes, let’s say down, right? That, you know, it still sucks because your stock went down, right? But you’re not going to be called out. But you know, if your stock let’s say suddenly goes up to like 20%, then you know, it’s an opportunity cost that you sort of gave up because of a premium in that sense. So that is one down side, but overall, like, you know, if you feel like there is a security that you just want to hold for a long time, but want a little bit more passive income, then this is one really good strategy to do so.

Feasibility for Grad Students

16:04 Emily: I guess a further follow up question about this, this a little bit relates to like, how feasible is it for a graduate student to do this. To own a hundred shares of a stock, the stock has to be fairly low in price, right? For that to be manageable for a grad student kind of income. So like for instance, when you have done this strategy, what is the stock price or some examples of stock prices that you’ve done this for?

16:26 Min Sub: Yeah. So, you know, I mean, I’ve been trading for some time, about two and a half years now. And honestly, like when I first started this strategy, I didn’t start with covered call options. I actually started with another option trading that I slowly, you know, started to accumulate a little bit of cash on the side. And I’ll actually get to that strategy, which is actually much more feasible and practical for grad students. But right now I currently only, if I were to be transparent with my portfolio, I currently own 100 shares of Lemonade right now. So, Lemonade is actually an insurance company that I really believe that there’s a good future growth to this, but Lemonade also has been trending sideways for a long time. Right now, Lemonade is trending for about $62 if I’m looking at it correctly, and it’s been like this for about the past three months. So, like I simply just used the strategy to, you know, essentially like gain a little bit of passive income on a weekly basis to at least, you know, get something out of it.

17:23 Emily: Hmm. Okay. So the way that you’re using this strategy is you have what you want to be a long-term holding, but you don’t expect it to take off anytime soon or do much movements anytime soon. So you’re making, as you said, some income from it in the meantime.

17:38 Min Sub: Right. Right. Exactly.

Strategy #2: Selling a Cash Secured Put Option

17:39 Emily: Very interesting. Okay. Well, I think you said there were three sort of approaches that you wanted to cover for options trading. So what’s the second one.

17:45 Min Sub: Yeah. So the second one is actually a little bit similar to the covered call option. So the second one is called selling a cash secured put option. So how this works is basically you are obligated to, this time instead of sell, you’re obligated to actually buy one hundred shares of a company that you like. Okay. So, I currently do not have many sold puts going on right now. But let’s say that you have a company, okay? I don’t know, let’s say that you really want to buy Costco or something, right? But you know, you currently don’t like the price right now because Costco is trending for about, you know, $350. I don’t know, I haven’t checked, but let’s say it is. But you know, you really want to own Costco at a lower price. So what you could do is you could actually sell a put option.

18:42 Min Sub: And how that works is for a put option, you actually need a collateral this time. So in the case of a cover call, your collateral was your 100 shares of a security, but for a put option, your collateral is actually cash. That’s why it’s actually called a cash secured put option. And because an option contract typically, you know, moves 100 shares at a time, you know, and maybe Costco is not a good example in this case, but basically we need to have, you know, so if you’re willing to buy Costco at $320, then you need to have a cash security collateral of about $32,000 in your account, which might seem impractical for grad students. But that’s kind of like how put options work. And basically what happens is you also get a premium on that. So you can basically put your collateral up, and then you also receive a premium based on that collateral.

19:34 Min Sub: So if Costco let’s say never goes down to $320, let’s say, right? Let’s say Costco just moons and let’s say it just stays at $350. Well, then the good news is that your premium is still yours. You get to keep that premium, and you actually get to keep your collateral, right? Because you know, basically in a put option, you’re obligated to buy the shares. But if your strike price has not reached below your expectation, then you know, after a week, right? Essentially your put options will expire worthless and you get to keep your money and you get to keep your premium, potentially. Now, I really like puts because here’s, and, you know, put options, I think is really never a losing strategy. Let’s say that Costco actually does go down to $320. Let’s say. Well, remember the reason why you’ve done it in the first place is because you are actually willing to pay that much money for Costco, right?

20:28 Min Sub: So, in a sense, it’s not a losing game because that was your original bet, right? You have an entry strategy and you wanted to basically buy a hundred shares. So even if Costco, you know, falls after earnings or something, you know, let’s say it falls down to $319. Well then yeah, you’ll be called out, right? You will lose your collateral. And actually you’re forced to basically buy 100 shares. But the good thing about that is, let’s say that, you know, you just don’t like Costco anymore all of a sudden. You can always, you know, sell those hundred shares back in the market, right? And essentially, you know, if that happens, then technically you get your collateral back, and you also get to keep the premium that you originally settled for. So I really think that put options is a very attractive strategy.

Risks of Selling Puts

21:10 Min Sub: The only downside course is that, you know, you need to have a lot of collateral depending on what kind of security you’re trying to buy. But other than that, I really think that selling puts is very lucrative. Especially if you have some cash that you really have no idea how to spend it, but you know, you’re going to at least keep your cash as collateral, then you can sort of receive some passive income premiums, in that sense. I sold puts quite often, you know, during this spring, when the market was very red and you know, I made pretty good income from that. So I’m very happy about that choice. Right now the market is doing really well. So put options are not very attractive right now, but you know, the next time we enter a barren market, I’m hoping to, you know, like consider selling more puts, if I have some more cash on the sideline.

21:54 Emily: So one follow-up question, again, I’ll use your example, and thank you for giving one. So in your example, you agree to buy Costco at $320, but you mentioned, let’s say it fell to $319. What if it falls to $200? So are you still agreeing to buy at $320?

22:10 Min Sub: Exactly. Yes. So that is a risk of selling puts, right? So essentially you know, again, which is why you should not do a put option contract on stock with a very high volatility. You know, Costco has a fairly low volatility. It’s deemed a very safe stock. You know, its P multiple is very low. So, you know, I personally don’t think that Costco will drop that much money unless there is some kind of a really bad earnings report, a really bad guidance or something. But, you know, usually with either your cover calls or selling puts, you should not do these strategies on really volatile stocks because, like I said, we know for fact that if it goes in both ways, we are kind of screwed. So that’s a very good follow up point. And thank you for mentioning that.

22:57 Emily: Okay, thank you.

Commercial

23:00 Emily: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients. It would be my pleasure to help you save you time and potentially money this tax season, so don’t hesitate to reach out. Now back to our interview.

Strategy #3: Put Credit Spread Option

24:15 Emily: And what’s a third strategy?

24:18 Min Sub: Great. Yes. So this is a strategy that I really, really like, because I think this is a great strategy for all grad because, unlike covered calls or, you know, cash secured puts, you don’t actually need a whole lot of security or, you know, a whole lot of, you know, collateral. Basically this is called a put credit spread option strategy, and how this works is essentially, you have a put option that is going both ways at the same time. So essentially, you are selling a put, but you’re also simultaneously buying a put at the same time, right? So here’s an example that I thought of yesterday, right? So, let’s say that you are selling a put option for Apple, right? So Apple is, you know, let’s say trending around $147 as of now. And remember what that means is if you’re only selling a cash secured put, you are basically putting $14,700 as a collateral because you’re willing to buy apple at that strike price, right?

25:23 Min Sub: But what if you don’t have that much money? What if you actually don’t have that cash? Well, then you could actually, you know, take that advantage and actually do the opposite. You could actually buy a put option for the same company, but at a lower strike price. So essentially let’s say you sold a put for $147, but you’re actually now going to buy a put option for the same security, but at a lower price, let’s say $146, right? And then remember, when you’re selling a put, you are receiving a premium, and when you’re buying a put, you’re actually paying a premium for that security. So essentially you’re actually receiving the difference on the premium between your sold put and your bought put. So if your sold put was, let’s say $37 of credit, but your bought put is $23 in credit.

26:14 Min Sub: That means your net credit on this put credit spread strategy would be $14, right? Because you’re basically receiving a difference between your sold put and your bought put, right? And you know, of course, you still need to have some collateral, and how the collateral works is basically, it’s the difference between your strike price of your sold put and the strike price of your bought put. So if you sold your put for $147 and you bought your put for $146, the difference is $1, right? But remember, because options operate for 100 shares, your total collateral that you’ll be paying for is $100, right? But you’re actually receiving a premium of $14. So if you put it that way, so if your collateral was $100 and your net premium was $14, that’s about a 14% profit from your collateral.

27:12 Min Sub: And, you know, if you’re correct that Apple basically did not go below your put price, then you know, you can actually keep your premium and your collateral. And the beautiful thing about this put spread strategy is that, unlike the cover puts, unlike the cover calls, you don’t need to have 100 shares, you don’t need to have, you know, basically a lot of cash as a collateral. So I really think this is a really good strategy, and I’ve actually been doing this for quite a while sometime in January of this year. And you know, I’ve been doing this on a weekly basis. And also the one good thing about this strategy is that there are actually ETFs that you could do this. So ETFs, like SPY and QQQ, those two are the two, you know great ETFs for this strategy.

28:00 Min Sub: Mainly because these ETFs actually have three different strike dates per week, right? So basically Monday, Wednesday, and Friday, they have a different strike expiration date. So essentially if you do this correctly, you can actually do this three times a week. And if you, you know, let’s say you sold about, you know, three contracts per, you know, like every two days. And if you make about, let’s say to be conservative, let’s say about $8 per contract. Well, that’s still about $24, you know, on that expiration date. But if you multiply that by three days, that’s still about, you know, $74 of just profit that you’re making from just the strategy. And, you know, like, I think I kind of can figure out your next question. Is this actually a very, you know, like good time commitment for grad students? Because, you know, it might sound like this is very long, very time lucrative and, you know, very, very time sensitive.

28:58 Min Sub: And the truth is, when you first learn how to do this, it does require a little bit of, you know, time to sort of like learn this. But honestly, like once you get more comfortable with these strategies, all you really have to do is simply just wake up in the morning and then, you know, just open your brokerage account, and like on your phone, or it could be on your computer, and just trade these options for, you know, maybe like the first, like 15 minutes of the market open. And that’s it. As long as your security is sold, then you can just, you know, put down your computer, go on a hike, you know, get your breakfast, go to lab. And, you know, like not worry about it until the next expiration date, which is, you know, typically in two days. So I really think that this is a very good tangible strategy that anyone can actually utilize, whether it’s grad students or whether you’re just trying to get started with options.

Recommended Resources for Executing Options Trades

29:47 Emily: If someone is listening and is really interested in pursuing this strategy, but they have no idea where to start, where would you recommend they go to learn more about how to execute these options trades, but also, you know, the research into like, you know, which particular stocks should you be doing which particular, you know, option trade for? So like, what are some really great sources that you’ve learned from in the past few months and years?

30:09 Min Sub: Right. So here’s the thing. So when I first learned about stocks in general or options in general, I actually started with paper money. Because I personally don’t like losing money, and you know, like learning something new like this, even if it’s like a hundred bucks, I mean, even if, you know, that might be a small percent of my portfolio, I don’t like losing money. I mean, so like I would rather be somewhat of an intermediate expert on this field before I actually use real currency. So, you know, there are actually, you know, like online, you know, sources, you know that you could use. I think that the one that I used was actually called the Stockwatch, I think, but basically there are a lot of paper trading platforms where you can sort of like play with fake money and see if this strategy works for you.

30:56 Min Sub: And once you are comfortable with trading fake money, and once you have profited, maybe even become a millionaire with the paper money, I think by then, you know, maybe to me, you know, it took about maybe a good three weeks to be more comfortable with this. So it was a very good learning period for me. And, you know, I’m very glad that I took that time to actually learn about this because now, you know, again, like I said, the time investment, you know, initially might be a little painful, it’s just sort of a big climb, but once you are comfortable with the level of, you know, risk-free training, then honestly this becomes a very routine task for me. So, I started using, you know, a paper training currency, but, you know, there are a lot of YouTube videos out there nowadays, right?

31:43 Min Sub: If you just, you know, look up, you know, how to sell covered call options, how to sell put options, right? How to do a put credit spread. There are many, many sources that people actually use. And there are actually, you know, plenty of day traders online who actually record their, you know, online, you know, videos on live. And they actually show how to execute different trades and they actually do tutorials of this. So there are actually endless amounts of resources that anyone can get started with this strategy. So if anyone is really interested in actually starting, you know, to learn a little bit about options, you know, how to actually trade options in a risk-free way, then I really think that those two ways are a very good start. And you really must make sure that you have enough collateral cash that, again, you are comfortable losing potentially. Because, you know, like I said, I’m only doing this for about 15% of my portfolio, right? Because you know, like I will not lose my sleep if, I mean, it would still stuck, but I will not lose my sleep, you know, if I potentially, you know, lose everything the next day.

Fairly Low Time Commitment

32:46 Emily: Yeah. So I want you to make some comments now about how compatible you think this strategy is with like a grad student lifestyle. And we’re talking both income, like available money to be invested, and of course, again, we’re only talking about a percentage of that total portfolio. And also the time. So like you mentioned earlier, I think there was a little bit of time invested to learn the strategy and you were, you know, playing around with a simulation. And then you actually start doing it. But once you are familiar and comfortable, it sounds like it’s a fairly low time commitment on like the daily or weekly basis, right? To actually execute the trades.

33:25 Min Sub: Yeah. It really is. I mean, you know, honestly, like the actual, like trading itself takes, you know, maybe less than three seconds. You know, like as long as you set your own strike price that you’re comfortable with, and as long as you are, you know, like consistent with what you want to sell it for or buy it for, then it really just, you know, like usually, you know, like I do multiple options on Monday because, you know, technically Monday is when the new market opens, unless it’s a holiday, and then the option contracts expire usually on Fridays. So usually selling a weekly put or cover call on the same week, I think is a very good, consistent income. Now sometimes, you know, like I do a little bit of longer calls. I make longer contracts if I feel like, you know, I can get more premium because you know, the longer your contracts are, the more premium you will get.

34:13 Min Sub: So sometimes if I feel like a stock, you know, might not potentially move for maybe another like two weeks or so, right? Then, you know, I could consider doing that for a longer time, which means the next week I’ll just take a week off or something because I don’t actually have to worry about you know, like losing maybe a premium in that sense. Yeah. So like, honestly, like once you sort of reach that phase of, you know, I learned how to do options, I kind of know what I’m doing, right? Once you sort of like, I think pass that barrier, I think from there, it becomes a very, very passive thing. And that’s the reason why I chose to participate in this podcast because, you know, when we talk about, you know, like passive income, you know, and side hustles. Most side hustles that we are familiar with, you know, usually requires some kind of a time commitment.

35:01 Min Sub: You know, we spend about, you know, an hour or two tutoring, we spend an hour or two, you know, maybe, being a tour guide or something. Or, you know, like you could be some kind of a, you know, participant in some, you know, case study, right? But I think with options, you know, it’s very great because it doesn’t require you to actually exchange your active time for money. Because once you sort of like, you know, have a system, right? It’s kind of like, you know, you are generating your own, you know, machine that gives you your own passive income. Now, you know, don’t get me wrong. Like, again, there are risks to options trading. So, you know, don’t think that everyone’s an expert, because I definitely lost some money during this. You know, but for me, like, you know, because I was very consistent over time and I was very keen to what I believe, and I was very committed to my purchases and other stuff. I was able to make a slowly but substantial income that I still have today. And I’m still looking forward to, you know, keep on doing this, you know, hopefully until I graduate. And by then, who knows what’s going to happen.

Choosing the “Right” Stocks

36:00 Emily: So kind of one more follow-up question on that. Like, I understand that, you kind of said once you set up this like system or like machine, you know, consistently. Yes, there are risks, but you have generated a fairly consistent passive income from this. But I guess I’m more wondering about how you’re figuring out, like you’ve mentioned several individual stocks as examples so far in our conversation, like there’s whatever thousands of stocks to choose from. Like how do you actually figure out which ones you’re going to be making these bets on? Like what resources do you use?

36:30 Min Sub: Yeah, that’s a very good question. So when you talk about like stocks that are deemed considered safe, so there are actually many measurements you can actually learn about this. So, basically when I first got really into investing, I actually read the book called The Intelligent Investor. I actually have it here. Let me pull it out right now. So it’s called The Intelligent Investor by Benjamin Graham. If you see this right here. And basically this is a really good book because it actually really shows you a lot about how to, you know, pick the stocks that are right for you. Essentially, you know, there are two like great measurements of a stock that you consider, right? Because remember, when we do a covered call, you want to choose a stock that has a fairly low volatility that does not tend to move up and down in price too much, right?

37:15 Min Sub: So, you know, a good example would be Google, right? Google or Apple, right? Those two, you know, are very big, you know, big blue chip stocks that have already performed very, very well. Right? So, these are called, you know, large market cap stocks because these companies have already grown, and you know, the amount of growth that they are projecting forward is a lot less compared to, let’s say new SPE companies that have just, you know, IPO’d and you know, these companies have a lot more, you know, potential to grow, right? So I mean, you know, if you’re looking for, let’s say this growth stock investing, then you should not do options on them, personally, because you know, these, like I said, these growth stocks can either go both ways and, you know, because of the high volatility. You might receive more premium, but you have a much higher risk of losing all your money.

37:59 Min Sub: So I would personally stay away from any of those companies that have a very small market cap, right. And, you know, market cap simply means it’s the total asset of a company. So you can basically multiply the share price times the number of shares, that’s how you get market cap. The other measurement is actually a measurement called beta. So I don’t know if you’re familiar with beta, but beta is basically a comparison to the S&P 500 index. And for those who are not familiar with the S&P 500, the S&P 500 basically is a way to think about the U.S. economy as a whole, right? So if your S&P 500 sort of grows on this path, then we can kind of expect that the U.S. economy also follows that trajectory, essentially. So if your beta for a stock is one, that means that stock essentially aligns parallel to the S&P 500.

38:48 Min Sub: So an example of a stock that would have beta one is actually Google, right? Basically, if you actually look at the past chart of Google versus the S&P right, we can actually see that they actually largely overlap together. You know, mainly because, you know, those two companies, they sort of flow in the same trajectory, right? So if I were to, you know, recommend a stock to do options on, I would choose a stock with a very low beta, or with a beta that’s as close to one as possible, mainly because we know those stocks are a lot less volatile compared to other stocks, right? You know, please don’t do, you know, options on, you know, like stuff like Tesla right? Because we know Tesla goes like up and down, in like so many ways.

39:30 Min Sub: So, it’s really, really risky to you know, do those kind of options, you know, unless you have a lot of money to lose, right? And the third measurement that I also look at is something called the PE ratio. So that’s called the price to earnings ratio. And typically I mean, some people say that PE ratio is a measurement of companies’, you know, future performances. But usually I like to basically use a metric where the PE ratio for a company typically should be around 20 or lower. And basically with that measurement, that usually means that the company has already grown, you know, has a lot of built-in growth. And there is a lot less growth potential possible in the future. So, it’s kind of like Google.

40:13 Min Sub: So Google also has a fairly low PE ratio because, you know, they also have grown so much these past, you know, couple decades that you know, we don’t expect Google to, you know, become like a master large cap stock in the future. So, you know, like you could actually search up these stocks on Yahoo finance, and actually look at their charts. And, you know, these charts will actually display all the parameters that I talked about. Beta, PE ratio, market cap, all that stuff. And, you know, if you are interested in learning more about this stuff, there are plenty of resources out there online. The one source that I really like is a source called Investopedia, actually. So Investopedia is basically like an encyclopedia with all the investment terms.

40:54 Min Sub: So, you know, like if you want to know more about, you know, what is a large cap company versus a low cap company? What is a PE ratio? What is a beta? You know, what are call options? You know, you will be able to find individual articles on all of these. So, again, it takes a little bit of time and practice to be familiar with these, but I personally think that as long as you are comfortable and as long as you are interested in making money, then I think these are very good strategies that we could potentially incorporate in our daily lifestyle. Especially if you like investing.

Portfolio Growth in 2021

41:26 Emily: Sounds really attractive. So for your personal portfolio, do you mind sharing how long you’ve been doing this for, how much money you’ve made or how much your portfolio’s grown, and how much time you think you’ve put into the research and the execution?

41:44 Min Sub: So this year alone. So if I were to, you know, just add up all of my total put credit spreads that I made from January 2nd to now. I have about $7,322. And that is because I was able to do this on a weekly basis. You know, I was selling SPY put credit spreads on three times a day, and eventually, you know, those money has been accumulating and compounding. And quite frankly, that’s the reason why I was actually able to accumulate a little bit more capital to start, you know, selling puts. Remember to sell put options, we need cash collateral. So because now I had a little bit of cash, now I’m able to, you know, use these put option strategies to actually sell puts on companies that I’m willing to buy. So basically, like, you know, I think you can see what I’m getting at here, you know, as long as you’re consistent, as long as you are committed to your goals, I really think that in the long picture, right, the money will compound on its own. And, you know, I am a very strong believer that anyone can achieve great wealth, no matter what kind of income that you’re making. So, I personally think that as long as you have the right mindset, as long as you have the right strategy for it, then anyone can do this. That includes grad students.

43:01 Emily: I love the way you put that. I don’t have anything to add to that, except to just say that $7,000 in, let’s see we’re in November now. So almost a year of what is essentially like a side hustle. You know, not that active, you’re not spending a lot, a lot of time on it. It’s a very decent rate of return, especially for a graduate student. So yeah, this is very exciting.

Best Financial Advice for Another Early-Career PhD

43:21 Emily: It’s been really a pleasure for me to learn more about this. So thank you so much for volunteering to be on the podcast. I want to conclude with the question that I ask of all my guests, which is what is your best financial advice for another early-career PhD? And it can be something related to what we’ve talked about today or something completely else.

43:40 Min Sub: Yeah. So this is actually not financial advice, but this is actually, I think, a very good personal habit that everybody should employ, and that is to wake up early. So the reason why I started waking up early was actually frankly, because the stock market in California opens at 6:30. And, you know, like, you know, if I’m trying to get the best bet out of this, right? You know, usually I like to do most of my trades in the morning. But honestly, you know, quite frankly, like after I started to have very prosperous morning habits, I realized that I feel like I have a lot more time in my day, right? Because, you know, when we wake up at let’s say 9:00 AM or 10:00 AM, right? You know, like we tend to feel I think more lazy because the sun’s already out and, you know, we already hear people outside. So, I really feel like fostering this kind of like early morning routine is a very good habit, I think for really anyone, right? Because not only do you feel like you have more time, but I think that, you know, in the morning when people are, you know, mostly asleep typically usually like I get less distracted and I tend to get more work done in the morning, personally.

44:50 Emily: I have to say that I concur, and it’s even a surprise to me. Well, it was so good to meet you Min Sub! Thank you so much for coming on and sharing about this topic. New to me, new to probably many of the listeners, but really exciting to learn about. So thank you! It was great to have you on!

45:05 Min Sub: My pleasure! Thank you so much for having me!

Outtro

45:12 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? I have collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

Is Fellowship Income Eligible to Be Contributed to an IRA?

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Update 2/22/2022: Great news! The point of this article has been fulfilled because the IRS re-revised Publication 970 for tax year 2021 to reflect the current tax code, which permits taxable graduate student and postdoc income, whether reported on a Form W-2 or not, to be contributed to an IRA.

Publication 970 p. 5 NOW states: “Individual retirement arrangements (IRAs). You can set up and make contributions to an IRA if you receive taxable compensation. A scholarship or fellowship grant is generally taxable compensation only if it is shown in box 1 of your Form W-2, Wage and Tax Statement. However, for tax years beginning after 2019, certain non-tuition fellowship and stipend payments not reported to you on Form W-2 are treated as taxable compensation for IRA purposes. These include amounts paid to you to aid you in the pursuit of graduate or postdoctoral study and included in your gross income under the rules discussed in this chapter. Taxable amounts not reported to you on Form W-2 are generally included in gross income as discussed later under Reporting Scholarships and Fellowship Grants.”

The rest of this article is unchanged from its original publication date on 2/6/2022.

Believe it or not, I look forward to the release of each new version of the IRS’s Publication 970, which covers how fellowship and scholarship income is taxed. I read it thoroughly and make sure that what I teach is in line with it. However, when I opened up the new 2021 version a few days ago, I was disappointed to read on p. 5: “Individual retirement arrangements (IRAs). You can set up and make contributions to an IRA if you receive “taxable compensation” (formerly “earned income”). Under this rule, a taxable scholarship or fellowship grant is compensation only if it is shown in box 1 of your Form W-2, Wage and Tax Statement.” Disappointed doesn’t really touch the depths of my feelings… I was momentarily devastated! I’ve been telling you for over two years now that fellowship income is eligible to be contributed to an IRA regardless of how it is reported or not reported at tax time. Was I wrong? Let’s explore the relevant texts. I have great respect for the IRS publications and find them very useful, but they are not the final word on tax law… the tax code is.

Further reading/listening:

Pre-2020 Status

You must have “taxable compensation” to contribute to an IRA in a given tax year. You can contribute up to the cap for that year ($6,000 in 2019-2022) or your amount of taxable compensation, whichever is lower.

Through tax year 2019, with respect to PhD trainee income, only income reported on a Form W-2 was considered “taxable compensation.”

The text from the 2019 version of Publication 970, Tax Benefits
for Education, reads on p. 5: “Individual retirement arrangements (IRAs). You can set up and make contributions to an IRA if you receive taxable compensation. Under this rule, a taxable scholarship or fellowship grant is compensation only if it is shown in box 1 of your Form W-2, Wage and Tax Statement. For more information about IRAs, see Pub. 590-A and Pub. 590-B.”

Similarly, the text from the 2019 version of Publication 590A, Contributions to Individual Retirement Arrangements (IRAs), reads on p. 6: “Scholarship and fellowship payments are compensation for IRA purposes only if shown in box 1 of Form W-2.”

This text is very clear and reflects the widely held understanding of eligibility for IRA contributions. It was very disappointing for many members of the PhD community; winning a fellowship often comes with a pay raise and therefore an enhanced ability to save for retirement, yet those recipients were barred from making IRA contributions. Keep in mind, these fellowships were taxable as ordinary income, just not considered taxable compensation for IRA contribution purposes. I didn’t like this rule, but I taught it as part of my personal finance material.

The Graduate Student Savings Act

Somehow, the plight of graduate students and postdocs who received fellowship income was heard! The Graduate Student Savings Act proposed to change the definition of taxable compensation. It was put before Congress as a bill in 2016, 2017, and 2019.

An excerpt of the fact sheet for the Graduate Student Savings Act of 2019 reads: “While fellowship or stipend income is taxed by federal and state governments, it doesn’t qualify as “compensation,” meaning that none of a student’s fellowship funds can be saved in an IRA… Many postdoctoral fellows… also receive taxable fellowship income, yet these fellows are also barred from using their fellowship income to contribute to tax-preferred retirement accounts. The Graduate Students Savings Act of 2019 would ensure that any graduate student or postdoctoral fellow who is
paid for their work or their studies can save a portion of their stipend in an IRA.”

While not using super specific or technical language, this excerpt makes clear the intent of the bill: to allow “any graduate student or postdoctoral fellow who is paid for their work or their studies” to contribute to an IRA, i.e., change the definition of taxable compensation.

Graduate Student Savings Act was not successful in being passed as an independent bill in any of those years. Then, in 2019, it was included in the SECURE Act.

The SECURE Act

The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) is described by Investopedia as a “far-reaching bill includes significant provisions aimed at increasing access to tax-advantaged accounts and preventing older Americans from outliving their assets.” It was signed into law on December 20, 2019.

The Graduate Student Savings Act was included in the SECURE Act. Here is the relevant text from the bill:

“SEC. 106. CERTAIN TAXABLE NON-TUITION FELLOWSHIP AND STIPEND PAYMENTS TREATED AS COMPENSATION FOR IRA PURPOSES.

“(a) In General.—Paragraph (1) of section 219(f) of the Internal Revenue Code of 1986 is amended by adding at the end the following: “The term ‘compensation’ shall include any amount which is included in the individual’s gross income and paid to the individual to aid the individual in the pursuit of graduate or postdoctoral study.”.

“(b) Effective Date.—The amendment made by this section shall apply to taxable years beginning after December 31, 2019.”

This expands the definition of taxable compensation for the purposes of contributing to an IRA beyond what is reported on a Form W-2. To me, this definition clearly includes taxable fellowship and training grant income paid as stipends and salaries not reported on a Form W-2.

The Tax Code (2021)

From the current Internal Revenue Code section 219 on Retirement Savings, section (f)(1) reads:

“(1) Compensation For purposes of this section, the term “compensation” includes earned income (as defined in section 401(c)(2)). The term “compensation” does not include any amount received as a pension or annuity and does not include any amount received as deferred compensation. For purposes of this paragraph, section 401(c)(2) shall be applied as if the term trade or business for purposes of section 1402 included service described in subsection (c)(6). The term “compensation” includes any differential wage payment (as defined in section 3401(h)(2)). The term “compensation” shall include any amount which is included in the individual’s gross income and paid to the individual to aid the individual in the pursuit of graduate or postdoctoral study.”

Again, I read this as any type of grad student and postdoc salary or stipend with no clauses about being reported on a Form W-2. The language is very similar to how IRS Publication 970 describes fellowship income on p. 5: “A fellowship grant is generally an amount paid for the benefit of an individual to aid in the pursuit of study or research.”

The Internal Revenue Code does seem, to me, to reflect the intent of the Graduate Student Savings Act of expanding the definition of taxable compensation with respect to graduate student and postdoc income beyond what is reported on a Form W-2.

The 2021 Publications

Publication 970

As I stated at the start of this article, Publication 970 disappointingly has not changed its tune on the definition of taxable compensation. It says the same thing in 2021 that it did in 2019 as if the Graduate Student Savings Act had never passed.

Publication 590-A

Publication 590-A, to its credit, now has some mixed language regarding taxable compensation and fellowship stipends and salaries. I’ll compare the 2018 and 2021 versions of this publication.

The 2018 version of Publication 590-A contains exactly one reference to fellowship income on p. 6 in the section titled What Is Compensation?: “Scholarship and fellowship payments are compensation for IRA purposes only if shown in box 1 of Form W-2.”

The 2021 version of Publication 590-A contains this language on p. 6 in the section titled What Is Compensation?: “Scholarship and fellowship payments are compensation for IRA purposes only if shown in box 1 of Form W-2.” So no change there.

However, further down in the same section it says: “Graduate or postdoctoral study. Compensation includes any income paid to you to aid you in the pursuit of graduate or postdoctoral study.”

Are they trying to draw a distinction between “any income paid to you to aid you in the pursuit of graduate or postdoctoral study” and “scholarship and fellowship payments”? What could “any” income mean if not, at least in part, fellowship payments?

To further muddy these waters, Publication 590-A includes Table 1-1, Compensation for Purposes of an IRA. The 2018 version of this table doesn’t mention either fellowship income or graduate or postdoctoral study. The 2021 version lists “taxable non-tuition fellowship and stipend payments” as included in the definition of taxable compensation.

This language in the table is consistent with both employee and non-employee graduate student and postdoc income, again, with no mention of a Form W-2 reporting requirement.

Furthermore, the 2021 version of Publication 590-A says under the Reminders section on p. 2: “Certain taxable non-tuition fellowship and stipend payments. For tax years beginning after 2019, certain taxable non-tuition fellowship and stipend payments are treated as compensation for the purpose of IRA contributions. Compensation will include any amount included in your gross income and paid to aid in your pursuit of graduate or postdoctoral study.”

I am not sure what “certain” means in this paragraph. “Non-tuition fellowship and stipend payments” reads to me as stipend or salary as long as your tuition is being paid by another source of funding. “Any amount included in your gross income and paid to aid in your pursuit of graduate or postdoctoral study” reads to me as both your employee income (reported on a Form W-2) such as from a graduate assistantship position or postdoctoral employee position and taxable non-employee (not reported on a Form W-2), often sourced from a fellowship or training grant.

My Conclusion

My conclusion is that the very clear language in Publication 970 and Publication 590-A excluding taxable fellowship and scholarship income from the definition of taxable compensation unless it is reported on a Form W-2 is not consistent with the spirit of the Graduate Student Savings Act or the current tax code. The changes made by the SECURE Act to the tax code included in the definition of taxable compensation “any amount which is included in the individual’s gross income and paid to the individual to aid the individual in the pursuit of graduate or postdoctoral study.” To me, this means that if you receive a taxable stipend or salary as a graduate student or postdoc, even if it is not reported on a Form W-2, it is taxable compensation for the purpose of contributing to an IRA.

What Do You Think?

I am really struggling with this and I honestly want to know: Do you see a flaw in my reasoning? Is there some difference between “fellowship” and “any income paid… in the pursuit of graduate and postdoctoral study”? Leave a comment here or email me ([email protected]). I am open to the idea that there is something I don’t see or understand. Or let me know if you agree with me.

What Can We Do?

If my argument is valid and the text in IRS Publication 970 and Publication 590A (in part) is incorrect, what can be done? Hit me with your ideas for getting this text updated.

My initial idea is to write to the offices of the Senators (Elizabeth Warren, Mike Lee, Ron Wyden, and Tim Scott) who sponsored the Graduate Student Savings Act to see if they can clarify why the IRS’s language in these publications doesn’t reflect the change the Act brought about. Do you have any other ideas?

The big win for our community was getting the Graduate Student Savings Act passed. The follow-through on that win is making sure that people (and tax software/preparers) know about the change so that graduate students and postdocs can functionally contribute to IRAs.

Fellowship and Training Grant Tax Forms

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There is no single correct IRS tax form on which to report PhD trainee fellowship and training grant stipends and salaries. Universities and funding agencies take different approaches, which often confuses grad students, postdocs, and postbacs. This article shares the crowd-sourced information on how universities and funding agencies are reporting fellowship and training grant income.

Please contribute to this project by filling out this survey to have your tax form included in this article—and share the survey as well.

I have included the number of entries that I’ve received for each type of tax form.

Further reading:

Tax Year 2024 Survey Results

External Fellowships

National Institutes of Health (NIH)

Continuing Education Training Grant (T15)

The T15 has been reported on a:

  • Form 1098-T Box 5 (1 entry)

Intramural Research Program: Postdoctoral Research Training Award (IRTA)

The postdoc IRTA has been reported on a:

  • Form 1099-G in Box 6 (1 entry)

Ruth L. Kirschstein Institutional National Research Service Award (T32)

The T32 has been reported on a:

  • Courtesy letter (2 entries)
  • W-2 (1 entry)

Ruth L. Kirschstein Predoctoral Individual National Research Service Award (F31)

The F31 has been reported on a:

  • Form 1099-MISC Box 3 (2 entries)

It has also been not reported in any way (1 entry)

Linked Training Award (TL1)

The TL1 has not been reported in any way (1 entry)

National Science Foundation

Research and Mentoring for Postbaccalaureates in Biological Sciences (RaMP)

The RaMP has been reported on a:

  • Courtesy letter (1 entry)

Graduate Research Fellowships Program (GRFP)

The GRFP has been reported on a:

  • Form 1098-T Box 5 (2 entries)
  • Courtesy letter (1 entry)

It has also been not reported in any way (2 entries)

National Aeronautics and Space Administration

Future Investigators in NASA Earth and Space Science and Technology (FINESST)

The FINESST has been reported on a:

  • Form 1098-T Box 5 (1 entry)

It has also been not reported in any way (1 entry)

American Institute of Indian Studies

Junior Fellowship

The Junior Fellowship has not been reported in any way (1 entry)

National Institute for Occupational Safety and Health

Occupational Health Psychology Total Worker Program

The Occupational Health Psychology Total Worker Program funding has not been reported in any way (1 entry)

Internal Fellowships

Harvard University

Funding (stipend) for doctoral students still in coursework has not been reported in any way (1 entry – told to use paystub for reporting to IRS)

Northwestern University

The First-Year Fellowship was reported on a courtesy letter (1 entry – letter was requested by recipient).

Stanford University

Funding (stipend) for doctoral students has been reported on Form 1098-T Box 5 (1 entry).

University of Connecticut

The Jorgensen Fellowship has not been reported in any way (1 entry).

University of Pennsylvania

The Educational Fellowship has not been reported in any way (1 entry).

Vanderbilt University

Funding (stipend) for doctoral students has been reported on Form 1098-T Box 5 (1 entry).

Non-tuition scholarship awards (e.g., health insurance, health fee award) have been reported on Form 1098-T Box 5 (1 entry).

Tax Year 2023 Survey Results

External Fellowships

National Institutes of Health (NIH)

Dissertation Award (R36)

The R36 has not been reported in any way (1 entry).

Intramural Research Program: Postdoctoral Research Training Award (IRTA)

The postdoc IRTA has been reported on a:

  • Form 1099-NEC Box 1 (1 entry)

Ruth L. Kirschstein Institutional National Research Service Award (T32)

The T32 has been reported on a:

  • Form 1098-T Box 5 (3 entries)

It has also been not reported in any way (2 entries).

Ruth L. Kirschstein Predoctoral Individual National Research Service Award (F31)

The F31 has been reported on a:

  • Form 1098-T Box 5 (2 entries)
  • Form 1099-MISC Box 3 (1 entry)

National Science Foundation

Graduate Research Fellowships Program (GRFP)

The GRFP has been reported on a:

  • Form 1098-T Box 5 (2 entries)
  • Form W-2 (1 entry)

It has also been not reported in any way (1 entry).

Internal Fellowships

Harvard University

The Prize Fellowship has not been reported in any way (1 entry).

Mayo Clinic Graduate School of Biomedical Sciences

Funding (stipend) for doctoral students has been reported on Form 1099-MISC Box 3 (1 entry).

Ohio State University

The Presidential Fellowship has not been reported in any way (1 entry).

Smithsonian Institution

The postdoctoral Smithsonian Institution Fellowship Program (SIFP) has not been reported in any way (1 entry).

University of Nevada, Reno

The Bilinski Fellowship has been reported on Form 1098-T Box 5 (1 entry).

University of Virginia

The Diversity, Equity, and Inclusion Dean’s Doctoral Fellowship has not been reported in any way (1 entry).

A graduate research assistantship position has not been reported in any way (1 entry).

The Raven Fellowship has been reported on Form 1099-MISC Box 3 (1 entry).

Tax Year 2021 Survey Results

National Institutes of Health (NIH)

Ruth L. Kirschstein Institutional National Research Service Award (T32)

The T32 has been reported on a:

  • Form 1098-T in Box 5 (5 entries)
  • Courtesy letter (3 entries)

It has also been not reported in any way (3 entries).

Ruth L. Kirschstein Individual Predoctoral NRSA for MD/PhD and other Dual Degree Fellowships (F30)

The F30 has been reported on a:

  • Form 1098-T in Box 5 + Form W-2 in Box 14 (1 entry)

Ruth L. Kirschstein Predoctoral Individual National Research Service Award (F31)

The F31 has been reported on a:

  • Form 1098-T in Box 5 (2 entries)
  • Form W-2 in Box 1 (1 entry)

It has also been not reported in any way (1 entry).

Ruth L. Kirschstein Postdoctoral Individual National Research Service Award (F32)

The F32 has been not reported in any way (1 entry).

Individual Predoctoral to Postdoctoral Fellow Transition Award (F99/K00)

The F99/K00 has been not reported in any way (1 entry).

Intramural Research Program: Postdoctoral Research Training Award (IRTA)

The postdoc IRTA has been reported on a:

  • Form 1099-G in Box 6 (1 entry)

NIH Oxford-Cambridge Scholars Program

The Oxford-Cambridge Scholarship has been reported on a:

  • Form 1099-G in Box 6 (1 entry)

National Center for Advancing Translational Sciences Clinical and Translational Science Awards (CTSA) Program TL1

The CTSA TL1 has been reported on a:

  • Form 1099-MISC in Box 3 (2 entries)

Clinical Connections-Connecticut (CNC-CT)

The CNC-CT has been not reported in any way (1 entry).

Molecular Biophysics Training Grant

The Molecular Biophysics Training Grant has bee reported on a:

  • Form 1098-T in Box 5 (1 entry)

National Science Foundation (NSF)

Graduate Research Fellowships Program (GRFP)

The GRFP has been reported on a:

  • Form 1098-T in Box 5 (13 entries)
  • Form W-2 Box 1 (1 entry)
  • Courtesy letter (1 entry)

It has also been not reported in any way (5 entries).

Postdoctoral Research Fellowships in Biology (PRFB)

The PRFB has been not reported in any way (1 entry).

Department of Energy (DoE)

National Nuclear Security Administration (NNSA) Stewardship Science Graduate Fellowship

The NNSA Stewardship Science Graduate Fellowship from the Krell Institute has been reported on a:

  • Courtesy letter (1 entry)

Department of Defense (DoD)

National Defense Science and Engineering Graduate Fellowship (NDSEG)

The NDSEG has been reported on a:

  • Form 1099-NEC in Box 1 (1 entry)
  • Courtesy letter (1 entry)

Science, Mathematics, and Research for Transformation (SMART)

The SMART Scholarship has been reported on a:

  • Form 1099-MISC Box 3 (1 entry)

The National Academies

Ford Foundation Predoctoral Fellowship

The Ford Foundation Predoctoral Fellowship has been reported on a:

  • Courtesy letter (1 entry)

Henry Luce Foundation

Clare Boothe Luce Fellowship

The CBL Fellowship has been not reported in any way (1 entry).

Simons Foundation

The Simons Postdoctoral Fellowship has been reported on a courtesy letter (1 entry).

Internal Fellowships

Cornell University

A fellowship for first-year rotating students has been reported on a Form 1098-T in Box 5.

Harvard University

The Prize Fellowship has been not reported in any way (1 entry).

Indiana University

The University fellowship has been reported on a Form 1098-T in Box 5 (1 entry).

Mayo Clinic

The Mayo Foundation for Medical Education & Research Fellowship has been reported on a Form 1098-T in Box 5 + Form 1099-MISC in Box 3 (1 entry).

Rochester Institute of Technology

A graduate research assistantship position has been reported on a Form 1099-MISC in Box 3.

University of California, Berkeley

The Chancellor’s Fellowship has been reported on a Form 1098-T in Box 5.

University of California, San Diego

The Summer Training Academy for Research Success (STARS) Fellowship has been reported on a Form 1098-T in Box 5 and a courtesy letter (1 entry).

University of Connecticut

The Jorgensen Fellowship has been not reported in any way (1 entry).

University of Michigan

The Rackham Merit Fellowship has been reported on a Form 1098-T in Box 5 (1 entry).

University of Pennsylvania

The Dean’s Fellowship in the Graduate School of Education has been reported on a Form W-2 in Box 1 (1 entry).

University of Southern California

The Merit Fellowship has been reported on a Form 1098-T in Box 5 (1 entry).

University of Virginia

The Diversity, Equity, and Inclusion Dean’s Doctoral Fellowship has been not reported in any way (1 entry).

Washington University in St. Louis

The WM Keck Postdoctoral Fellowship has been reported on a courtesy letter (1 entry).

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Workshop: Quarterly Estimated Tax for Fellowship Recipients