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Podcast

Do I Owe Income Tax on My Fellowship?

February 19, 2019 by Emily

Postbac, graduate student, and postdoc fellows frequently ask whether their fellowships are considered taxable income. PhD-type fellowships that are not reported on a W-2 are non-compensatory income. They might be reported on a 1098-T in Box 5, on a 1099-MISC in Box 3, or on a courtesy letter or not reported at all, which accounts for the widespread confusion. Publication 970 answers the question of when a fellowship can be considered tax-free. Fellowships are considered part of the recipient’s taxable income unless they go toward paying qualified education expenses (students only).

Links Mentioned in the Episode

  • Publication 970

income tax fellowship

Transcript

Welcome to the Personal Finance for PhDs Podcast – a higher education in personal finance. I’m your host, Emily Roberts.

I’m doing something a little bit different in this special bonus episode for Season 2.

I’m using it to answer a frequently asked question that I receive about taxes. The question is: Do I owe income tax on my fellowship?

In this episode, I’m speaking to citizens and residents in the United States. And I’m also talking about PhD-type fellowships whether at the postbac level, the graduate student level, or the postdoc level.

What’s going on with these fellowships that makes the recipient question whether or not they are taxable is that they are not reported on a W-2. They might not be reported at all, or they may be reported on a 1098-T in Box 5, on a 1099-MISC in Box 3, or on a courtesy letter, which is not an official tax form but rather just a letter that states what the amount of the fellowship was in that calendar year.

Fellowship income is considered part of your taxable income. Now, you may not actually end up paying tax on your fellowship income depending on the rest of your return, like the deductions and credits you’re going to be able to take, but it is considered part of that taxable income.

Now, I know you’re not inclined to just believe me right off the bat. I mean, there’s a strong incentive for you to believe that your fellowship income is not taxable, so I’m going to give you a bit of evidence here.

IRS Publication 970 is the definitive publication on the taxability of fellowship and scholarship income. I’ll read you a few excerpts from Chapter 1 of Publication 970.

First, some definitions:

A scholarship is generally an amount paid or allowed to, or for the benefit of, a student (whether an undergraduate or a graduate) at an educational institution to aid in the pursuit of his or her studies.

A fellowship grant is generally an amount paid for the benefit of an individual to aid in the pursuit of study or research.

So you can see that fellowship grants are much more broad; they can be issued to non-students, whereas scholarships only go to students.

Chapter 1 of Publication 970 approaches fellowships and scholarships from the perspective of trying to make them tax-free.

So let’s see how that can happen:

A scholarship or fellowship grant is tax free (excludable from gross income) only if you are a candidate for a degree at an eligible educational institution.

So right off the bat we know that anybody who is receiving a fellowship who is not a student cannot make their fellowship tax-free, i.e., it is part of their taxable income.

Additionally:

A scholarship or fellowship grant is tax free only to the extent: It doesn’t exceed your qualified education expenses…

So now we’re just dealing with the graduate student population that has the potential to make a scholarship or fellowship grant tax-free.

The way that we use the terms ‘scholarship’ and ‘fellowship’ in academia, a ‘fellowship’ generally refers to the money that you take home for your living expenses, whereas ‘scholarship’ is the money that goes towards paying your tuition and fees, the qualified education expenses.

Very roughly speaking, your qualified education expenses can make your scholarships tax-free if you’re a fully funded graduate student, but there’s no more qualified education expenses to start making your fellowship income tax-free. Therefore, again, roughly, your fellowship income is included in your taxable income.

So to summarize, fellowship and scholarship income that goes towards paying our qualified education expenses like tuition and fees can be made tax-free, but fellowship and scholarship income that goes towards paying other kinds of expenses like your living expenses can’t be made tax-free.

Now, I’m glossing over some very important details on how you actually calculate your taxable income, so if you want more information about that, please see the tax center on my website, pfforphds.com/tax.

But, there you go, roughly speaking, fellowship income does need to be included in your taxable income, whether you are a postbac, a graduate student, or a postdoc.

Thanks for joining me in this short bonus episode!

Please share this episode on social media and with your peers because this is a message that they need to hear. It’s not a message that they want to hear, but it’s a message that they need to hear to stay on the right side of the IRS.

Show notes for this episode can be found at pfforphds.com/s2be1.

Thanks for joining me today, and I’ll see you in the next episode!

Further reading/viewing:

  • Weird Tax Situations for Fellowship Recipients
  • How Much Tax Will I Owe on My Fellowship Stipend or Salary
  • The Complete Guide to Quarterly Estimated Tax for Fellowship Recipients
  • How to Prepare Your Grad Student Tax Return (Tax Year 2019)
  • Scholarship Taxes and Fellowship Taxes

Using Data to Improve the Postdoc Experience (Including Salary and Benefits)

February 11, 2019 by Jewel Lipps

In this episode, Emily interview Dr. Gary McDowell, the executive director of Future of Research. Future of Research is an advocacy organization that uses data to empower early-career researchers. Gary outlines the ongoing work at Future of Research before diving into the details of their recently published study on postdoc salaries. Emily and Gary discuss the complexities around categorizing and counting postdocs as well as the interesting results from the data Future of Research acquired by Freedom of Information Act requests. Current postdocs can contribute to this ongoing project by submitting their salary and benefits data to the Postdoc Salaries database.

Links mentioned in episode

  • Tax Center for PhDs-in-Training
  • Volunteer as a Guest for the Podcast
  • Future of Research
  • Paper: Assessing the landscape of US postdoctoral salaries
  • Nature News “Pay for US postdocs varies wildly by institution” 
  • PostdocSalaries.com
  • PhDStipends.com

postdoc salaries

Teaser

Gary (00:00): We actually found that the median salary for all postdocs across the US, regardless of field, was actually pegged to the minimum National Institutes of Health National Research Service award stipend.

Introduction

Emily (00:18): Welcome to the Personal Finance for PhDs podcast, a higher Education in personal finance. I’m your host, Emily Roberts. This is season two, episode three, and today my guest is Dr. Gary McDowell, the Executive Director of Future of Research, an advocacy organization that uses data to empower early career researchers. Gary shares results from future research’s, recently published study on postdoc salary data gathered through FOIA requests. We also discuss how prospective postdocs can properly evaluate and negotiate their postdoc job offers. Current postdocs can contribute to this ongoing project by entering their salary and benefits data to the database at postdocsalaries.com. Without further ado, here’s my interview with Gary McDowell. Today on the podcast I have Gary McDowell from Future of Research, and we are going to be discussing postdoc salaries. Uh, they have just wrapped up or well wrapped up a milestone in an ongoing project, and we’ll be discussing that. So, Gary, please, you know, tell us a bit more about yourself and about future of research.

Will You Please Introduce Yourself Further?

Gary (01:25): Sure. Um, so I, uh, I’m from Northern Ireland Originally, I grew up in Northern Ireland, in Scotland. I did all of my, um, undergraduate and postgraduate study in the UK, um, and then moved over to the US to become a postdoc, um, first at Boston Children’s and then at Tufts University, uh, both in the Boston area. Um, and it was while I was there that I started getting more in interest in the, um, the scientific system itself, um, and how we are training people, how we are, um, you know, setting scientists up for success and producing scientists and not just science. So, um, obviously at that time I was also experiencing a lot of the frustrations that people find with the, the hyper competition that there is in this system. Um, and so, um, moved on afterwards. Uh, I’m now the executive director of this nonprofit future of research, uh, and we’re trying to, uh, champion, engage and empower early career researchers with evidence to help them change the, uh, research system and the enterprise that they’re experiencing, uh, and make improvements.

Emily (02:36): Yeah, I love this. It obviously dovetails really well with what I do. Uh, you guys have a broader focus. Mm. Um, I’m more narrow about just really getting people dialed in and helping them with their finances. Um, kind of throughout, you know, uh, pre-graduate school, during graduate school, post-graduate school. Um, so I love that we have sort of complimentary pursuits here. And we’ll of course be talking about that specifically with, with respect to salary in a moment. But can you, um, give me kind of a little bit more of an overview about, you know, what’s your team at future of research? What have you guys been up to, generally all the different areas that you work in?

Future of Research Nonprofit

Gary (03:09): Sure. So, yeah, we’re, uh, an organization, um, at the moment there’s just me as staff, and we have a board of about 20 early career researchers. Um, so we ended up forming this nonprofit. Originally we’d had a, a conference to bring early career researchers together and discuss some of the issues with, uh, the system and with hyper competition, um, that there is particularly in biomedicine. Uh, and from that conference and then a bunch of conferences around the country, we quickly realized there was this, this need for this, um, this group to be, you know, trying to have these conversations. Um, and in particular, you know, trying to give data and evidence to early career researchers to help ’em make better choices, but also to educate in some sense the rest of the scientific community about the realities that our generation is currently experiencing. So, you know, we have this board, um, um, and volunteers who are actively working on a bunch of projects and issues that, that come up and that we’re experiencing. Um, we have two major projects, which I think are, are, have both come out of local meetings that we held in the last couple of years which are really very, um, you know, we, we wanna try and have specific projects that we’re setting up and establishing, um, having looked at a, a need, uh, around in the community. So those projects, one of them we’re calling who’s on board, and that’s trying to get, uh, more early career folks into leadership positions. So we’re gonna start trying with scientific societies and trying to get more people onto the voting council positions at the top of the, the organization. Um, you know, and trying to bring in that perspective. Um, also recognizing that a lot of people need leadership training and development and, and so on. And hopefully generating a network of future leaders, um, that, that, uh, organizations across research can tap into. Then the other major project that we’re really pushing at the moment is, uh, focusing around mentoring. Um, I think mentoring is one of the biggest concerns of, um, grads, postdocs, uh, et cetera, you name it, throughout the system right now, junior faculty in particular, one of the first things that, that I am asked by junior faculty is, you know, how do I find out more about mentoring people and managing people because I don’t know how to do it and suddenly I’m expected to. Um, and, you know, this can lead to all sorts of issues with people reaching their full potential. Um, you know, egregious behavior can, can occur and is not really held accountable. So we’re, we’re pushing a big summit next June in Chicago to bring people working in this space, this, um, and doing research on mentoring together and trying to figure out what we can do to take grassroots action to really make sure institutions are putting mentoring right at the center of what they’re interested in. Um,

Emily (05:57): Yeah, sounds amazing. Um, especially, particularly the latter project, I think. Um, yeah, please keep going. Or any other major efforts there.

Gary (06:07): Yeah, so we, then we have, so those are things that we’ve sort of set up, um, deliberately, and then there’s things that we’ve sort of responded to and we try to be responsive to, you know, needs that arise. So one of those projects is sort of related to the who’s on board thing. Um, and it’s to do with peer review. Uh, and in particular, we’re trying to address this phenomenon of grad students and postdocs, essentially ghost writing a peer review report that is then submitted under somebody else’s name to a journal. Um, and you know, this, this is not only a problem, it’s sort of scholarly recognition. Um, but it, you know, at the same time we’re hearing that there’s not enough reviewers, um, and journals are sort of crying out for more reviewers and this lack of transparency about who’s actually doing the review and getting the names of particularly, you know, grads and postdocs who journals may want to review again in the future. Um, those sort of barriers of not putting those names across, um, and of not recognizing that scholarly work, uh, and, and who, who did it, um, is a thing that we’re pushing, uh, both with journals, but also, uh, we did a survey asking people about their experiences with this. And one of the big things coming up is that, of course, principal investigators have not been trained in peer review either generally. And so a lot of these practices are to do with just a lot of, uh, assumptions and, um, um, you know, a lack of clarity that there should be a different practice that you should be giving these names. So it’s really, that’s been really interesting to work on and sort of was in response to a survey done by, um, junior folks at eLife in the last year. So, so we’ve been following that. And then the other one, which, which we can talk more about now, is the, the salary project. Um, that really started just as we had formed the nonprofit. It was when there was a change to federal labor law being proposed, um, and the long, and the short of it was that this was going to affect postdocs and it was going to raise their salaries, um, or institutions were going to have to essentially have postdocs clocking in and out and, uh, tracking their time, which is not really very realistic. So, so there was this push to raise salaries, and we, we were following what institutions were doing, uh, to accommodate that change. And that then led us to asking, well, what are the actual salaries that people have and led into the, the, the work that we’ve, we’ve done here.

Emily (08:29): Yeah, I would love to talk about that a little bit more in depth now. Um, when I was, you guys just came out with a, a paper recently, right? What’s the title of that and where can people find it?

Gary (08:39): Sure. So the title is Assessing the Landscape of US Postdoctoral Salaries. Um, it’s open access, it’s in the studies in graduate and postdoctoral education, um, and, uh, which is part of the Emerald Insight Publishing Group. Uh, yeah,

What is a Postdoc?

Emily (08:56): Yeah. So my <laugh>, my question is, I was very interested in this, uh, section of the paper where you talked about the different titles that postdocs might have and how that affects what salaries they have. And it just led me to the question of what is a postdoc?

Gary (09:09): Yeah.

Emily (09:10): Actually, like, can we start there? What’s a postdoc?

Gary (09:12): Yeah. So yes, a postdoc is, so I can give you, I can start with what I think a postdoc should be, and we can maybe work from there. My, you know, when you’re, you’re going through the academic track, um, there’s, you know, you go through your undergraduate phase, then you go to graduate school, you get your PhD, uh, that’s the point at which in my opinion, you should be learning how to do science, how to carry out research, how to, you know, do experiments, uh, how to analyze them, how to learn the nuts and bolts of being a scientist. Um, then what has become the default over time is that in order to become a professor after getting your PhD, there’s an intermediate step known as the postdoc or carrying out post-doctoral research, um, post obviously being, after getting your doctorate. And, um, in my opinion, this is a period in which you should be thinking about your own research goals and how to take those forward and learning under the mentorship, uh, slash apprenticeship of an investigator who already, you know, is doing this, learning how to manage a group, learning how to mentor people, learning how to manage budgets, how to write grants, how to, you know, ensure that your research project can succeed and that you can lead a team. Um, but the postdoc more likely is in reality is, um, a period of further research. Um, usually someone will move on to do a, another project. It’s quite common to change field and get experience by doing a postdoc there. Um, but in reality, what people are doing is trying to get, uh, a number of papers trying to demonstrate that they can succeed in perhaps a different lab to where they did their PhD, um, and, um, sort of accrue credentials in order to get a faculty position to then start as a, as a professor.

Emily (11:09): And I, what I was curious about, because your understanding and my understanding are very, um, similar to one another, I was also coming outta sort of the biomedical world, so that kind of makes sense. But, um, I think in your paper you had something like 11 different common titles under which postdocs can be hired. And so I was just wondering if there’s part of the issue, uh, a discrepancy between how the, the employers or universities or workplaces or mentors see postdocs and how postdocs see themselves.

Gary (11:37): Yeah.

How Was the Idea for a Project to Assess Postdoc Salaries Formed?

Emily (11:38): Um, and we can get into this a little bit more, but one of, I think the main motivations behind your project was, um, just kind of trying to figure out what level of awareness universities, et cetera, have about their own, their own postdocs, whether they’re employees or not. So let, let’s take it back there a little bit bit. So like, you’re, you’re coming up with this idea. Okay. How, how was this idea formed for the project? What exactly were you asking?

Gary (12:00): Yeah, so you’re, you’re totally right, because we were coming from this perspective, I think this is particularly why we took the route that we did. Um, when we were looking at the policies that were being updated in response to this labor law, we started to ask ourselves the question, well, these are policies at an institution that doesn’t tell us necessarily what people are actually getting paid. And it requires adherence to a policy, uh, and that someone essentially is checking up that the policy is being followed. Now, we already, we have a, a preprint, um, paper, um, that we’ve done with, uh, rescuing biomedical research, another nonprofit in this space, um, looking at the National Science Foundation’s data on the number of postdocs. And, um, this was in reaction to a paper that claimed that the number of postdocs was in decline, because that apparently seemed to be reflected in the NSF data. Um, and we dug into that data a little, and we first questioned whether there was actually a decline or whether there was actually a bubble of people postdocing for longer after the recession in 2008. But one of the things we found was that institutions were doing a pretty terrible job of reporting year to year how many postdocs they had. And so, while we were very receptive to, you know, institutions telling us, oh, well, we’re raising our salaries, like this is going to be our new policy. Um, if you don’t know who your postdocs are to begin with, we were curious as to whether people would be falling through the cracks and whether you would actually know who your postdocs are, and, um, whether they’re getting the salaries that they’re supposed to be getting, uh, whether, whether the policies were actually reflected in reality, or whether an institution could say, you know, we recommend all our postdocs get this salary, and then there’s no follow up or, or action on that. So that was a big part of that. Right. And, and knowing as you say that there is this great breadth of, um, assumptions about what the postdoc is, um, you know, there is this constant argument of whether they are employees or whether they are trainees. Um, you know, sadly it seems that they’re employees whenever it suits in keeping them out of training or outta things that you need to do for students. But they’re also trainees when it suits in terms of giving them lower salaries and not giving them benefits.

What Position Counts as an Employee or Not an Employee?

Emily (14:16): I was just going to ask about that. Actually. This is one of, this is just a question that I’m constantly asking about whether people are employees w receiving W twos. Or not employees. And I would think that categorizing people as not employees would be an easy way to get around the, uh, you know, the pol- the, it’s a fair labor of Standards act, right? The FLSA, right?

Gary (14:38): Yeah. So yeah, the, the interesting thing about that, and a lot of institutions did in the beginning try to claim that they’re, because also it’s complicated by where the money comes from for the postdoc. So most postdocs are paid directly off a research project grant, um, as quote unquote staff on the grant. But a lot of postdocs are also on fellowships of various kinds from a whole multitude of different organizations and people on fellowships, uh, especially if they are per paid directly and not paid through the institution, they’re most usually referred to as trainees. Um, they often get the, the worst situation of losing their benefits often when they get on a fellowship, um, after moving off a, uh, another mechanism, um, because the institution says you’re no longer an employee, therefore you no longer have to provide benefits. And this came up a lot with the, the, the Labor Act, um, updates. And what was really interesting was the Department of Labor, um, the specification of like, who is a, who is an employee or not, doesn’t come down to who pays you. It’s the nature of the work that you’re doing. And one of the most interesting things that came up was this, this pushback that occurred of you can’t just claim that your fellows are not, that they are exempt from this law. They actually are not. And indeed, the Department of Labor told that to the National Institutes of Health, that’s why they raised their fellowship stipends, um, because they were told these people are not exempt. They are explicitly, they ended up explicitly being, uh, part of the target of those trying to make the change. Um, so yeah. So the, even within those definitions, part of them are just institutional. The institution will just argue that they have that definition, but it actually sometimes doesn’t even stand up under, under law. So it’s, it’s been an interesting part of this.

Emily (16:24): Yeah, that is very interesting. And it is so important, um, I think for people who are looking to take a new position, whether it’s as a graduate student or as a postdoc or, or what have you, um, to know going into it, how you are viewed by the institution. Employee, not employee trainee, not a, not trainee, um, just because yeah, your, your benefits or whatever might, um, change depending on the, the status that you have. Um, they could be taken away from you if something changes at the university level. Um, so just kind of go into whatever situation you have with eyes wide open.

What Did You Do for the Postdoc Salaries Project?

Emily (16:57): Yeah. So let’s get back to the, to the salary project. Um, so you were curious about, you know, whether policies were actually being applied at, at the institution. So, so what did the actually project end up being? What did you do for it?

Gary (17:10): Sure. So, so we wanted to get these salaries, and this is data that is not, you know, easy to find, uh, that is out there. And so we ended up with this rather blunt, somewhat aggressive, but also, um, easy and also standard methodology, which was to carry out freedom of information requests at public institutions. So what we would do is contact the freedom of information, uh, office or the public records office at the, at a public institution. They’re legally required to give out data like this. And we would ask for, um, in this case, we asked for the simply the title and the salary of everyone who was a postdoc. Um, we wanted to keep it as, as easy as possible. And that was on, we were asking for salaries on the date of December 1st, 2016, which was when this labor law was due to come into effect, uh, when, when changes were, were likely to happen, the institutions had been preparing for at the time. Um, and so, yeah. And so we asked, basically asked for, for this data. Now the, the reason it’s a bit aggressive is that it ends up, um, basically forcing the institution to give data in a, you know, we weren’t asking institutions, we weren’t going to the sort of postdoc offices or to various administrators and asking them to give us the data. Um, but that actually worked out as a really interesting part of this project as an internal metric of whether a university’s administration knows what postdocs are. So I would find some institutions were able to provide the data with no problem, and other institutions, I would be contacted back and asked, you know, what is a postdoc? Can you explain what this is? You know, I would have to look up titles sometimes at the institution to find out what the relevant titles were that we wanted. Um, and, um, you know, we were sort of cross-checking the number of salaries we’re getting with the number that NSF thought, um, that they had. Which, again, those numbers should be reported by people who know better what postdocs are to the NSF. And so we’re, you know, providing all these like controls and looking at seeing how good is the data that we’re getting, um, you know, on top of just getting the numbers, what standard is it at? What are we getting back? And that was actually a really interesting aspect of, of what we were receiving as well.

Commercial

Emily (19:32): Do you know what’s even scarier than an upcoming committee meeting the prospect of preparing your tax return? But it doesn’t have to be that way. I’ve created a variety of free and paid resources to help you get through tax season with as little pain as possible. These resources are specifically for grad students and fellowship recipients, post back through postdoc, check them out at pfforphds.com/tax.

Analysis and Findings from the From the Postdoc Salaries Project

Emily (20:03): So once you were able to get, you know, some data, uh, coming back from these public institutions, uh, what what did you do with that? What was, what was your analysis like?

Gary (20:14): Sure. So we had, uh, a data scientist on our team, um, who went through and tried to analyze, basically, you know, we’re, we’re sort of looking at the, the, the distributions of salaries. Um, and, you know, we wanted to break things out by geographic region, um, by, uh, gender, um, and, um, possibly other demographics. We have a little try at that. And also by the, the title, whether what variables there were that were affecting the salaries, um, and what we, you know, what were we seeing overall as the, again, you know, to a big part of this was just assessing the landscape, just figuring out what postdoc salaries looked like and giving us a sense, uh, giving us a bar to work from, uh, in terms of, of efforts going forward.

Emily (21:03): And so, was there anything, uh, well, what were sort of the broad, I guess, conclusions, was it just like, okay, here’s ranges of salaries and, uh, here’s the breakdown of these different groups. Like what were some of those conclusions? And then also was there anything that came out of that that was actually surprising to you?

Gary (21:18): Yeah, so, um, so yeah, we sort of got broad distributions of where salaries were. And we actually, um, before the, the paper was done when we’d actually done the, uh, initial data gathering, we had it write up, um, uh, in nature about this, um, I think it was titled Postdoc salaries very wildly from institution to institution. Um, and they did a very nice demographic of where all the salaries lay, and most people were in the forties, thousands of dollars, um, you know, between 40 and and 49,999, um, which made sense. Um, we actually find that 22% of all of our data was in a $25 range around the new, uh, NIH minimum stipend, uh, which was very close to what the proposed salary threshold had been under the, the federal labor law change. So we found that that really had a, a very striking effect. Um, and in fact, one of the things that was most interesting and I think, um, is useful for us in, in doing policy work going forward, we’re interested in finding out what is, what are the levers that we need to pull in order to raise postdoc salaries? And we actually found that the median salary for all postdocs across the us, regardless of field, was actually pegged to the minimum, uh, national Institutes of Health, um, national Research Service award stipend. So these are the, the numbers that NIH uses for things like F awards and T awards that postdocs are paid off. Um, these are the only people who have to actually be paid according to this stipend. Um, but a lot of institutions just peg their salary scale to the NIH, and in particular, they may not use the scale year to year. They may not have increases per year, but they certainly will peg the minimum salary, must be the NIH’S level. And so we actually find that the most effective policy lever for raising postdoc salaries in the US would be to get the NIH to raise their, um, the, the NRSA award stipends. And that’s obviously something we’ve been pushing. 

Emily (23:28): I’m, I’m so glad you brought that up. Um, I remember, so several years ago, I, I did a fellowship at the, um, the National Academies, and I remember reading their, uh, postdoctoral report. The postdoctoral experience revisited, I think was the recent report on it. And seeing that and seeing that discussion about how important the NIH minimum salary, uh, recommendation was, how so many universities were going off of it, which is really just so surprising because again, it’s one, it’s a recommendation. And except for their own internal stuff like it, you know, that’s required. But for everyone else, it’s just a recommendation. And two, it’s a minimum. And it’s not at all taking into account like different cost of living, you know, areas. Like is it, like, is that minimum supposed to be for Bethesda, or is it supposed to be national? I’m not even sure about that. But, um, yeah, anyway, just the fact that they were going off of this as if it were absolute truth and no, it was only ever a minimum and only ever a recommendation. And I’m so glad that you brought that up. And I believe I read that within the last, we’re recording this in December, 2018. I think within the last week or so, NIH actually has raised, um, their, their recommended minimum salary, right?

Gary (24:35): They have, yeah. They have done, they, they did a big raise. We actually plotted this out in a, in the first figure in the paper of raises over time. And, um, you know, the, most of the raises, um, to the current towards the current level happened during the NIH doubling around the turn of the century. Uh, and then the, the Fair Labor Standards Act was actually another major push. Um, you know, the NIH had been pushed along, uh, a couple of times by various reports. Um, I think the, the, the last one previous to the FLSA was the 2012 Biomedical Working Group report. And so there’s been these little pushes and since the FLSA, they’ve pushed up a lot at that point, and then they have consistently continued to push quite high. Um, I think this year was a 2% increase, so that now the minimum is at $50,000, uh, which has been recommended for, for quite some time now.

Emily (25:30): Yeah. So they finally reached another milestone there of getting into the the fifties range <laugh>.

Gary (25:34): Yeah, exactly. So, um, yeah. And then, you know, this has actually been useful as a real policy example. You know, I and, uh, the president of Future of Research, Jessica Polka, were both on the National Academy study, uh, for the next generation researchers initiatives, which NIH is releasing its recommendations on, uh, in a, in a few weeks. And, um, one of the things we were able to push having this data was, well, we know the NIH number is a very important number. And so the recommendation, I think in the upcoming outta that report was NIH needed to raise its number, but also institutions should take that number and then adjust for cost of living and for years experience. So sort of both, both groups needed to be both sets of stakeholders needed to be, to be, uh, yeah. Working on that.

Emily (26:20): Yeah, absolutely. Um, so any other interesting findings from the paper?

Gary (26:25): Yeah. Um, I think one of the things I was surprised with, uh, most was how many salaries there were in the fifties thousand, uh, of dollars. Um, and it was interesting, you know, we did a little bit of, uh, breaking down by, um, by field as far as we could. Um, we had only requested the title and, um, salary of the postdocs to, you know, to have this basic, uh, uh, request, um, and as reasonable requests that hopefully institutions wouldn’t refuse as possible. But half of those institutions ended up giving us also names and department, uh, information so we could work out field for a large subset. Um, and we find that there was no real field dependence on the salaries. Um, you know, I think a lot of people assume that, oh, the humanities will be all the salaries in the low range and the, you know, the higher ones will be computer science, and certainly towards the higher end, you do see some of that. But, you know, there’s no, the humanities are not lower on average than anyone else, to be honest. You’d be surprised how often biomedical en- engineering is, uh, in the low salary range. Um, and, um, yeah, so I think that was one of our surprises, and a lot of this anecdotally seems to be, um, you know, when I go and talk around the country about salaries, um, and make a, a big push for people to be talking about salaries, uh, I hear a lot of who negotiates. Um, a lot of postdocs are negotiating salaries a lot more than I think people know. And so there’s this whole, I think there’s this disparity in who’s asking and who’s not asking. And you know, frankly, that we’re not even supposed to be talking about money to talk about money in academia, as I’m sure you’re, you’re often facing as well in your work to talk about this is already to, to cast out on whether you deserve to be there, because if you’re looking for money, you shouldn’t be in academia sort of thing. Right. So, so that’s been an interesting thing to push as well.

Emily (28:22): Yeah. And I think that leads well into, um, the project that we first met over. Um, you first approached me about, so to give a little backstory for the listener, um, in 2014, I think my husband and I created a website called, uh, PhDstipends.com and it’s just a really simple database where people can enter what their stipends or salaries or fellowships or whatever, uh, your, your university is calling it, uh, basically how much you’re being paid, um, and then kind of whatever other details you would like to add. Um, and it’s just a very simple database, but it’s got, I think there’s over 4,000 entries in it now, and it’s, it’s getting pretty robust. Um, and so anyway, it’s a great place to go to just kind of compare maybe for prospective graduate students offers that they’re getting, um, to see if they’re reasonable, see what other people at that university are being paid, see what, you know, other people in their field are earning at different universities. So that’s kind of that purpose. And then forever, we had the idea that we should do the same thing for postdocs, but we never did it until you and I entered into conversation. And, um, if I remember correctly, the motivation for wanting something like what we eventually created, which is postdocsalaries.com, um, was to figure out if, again, these, well, sort of what you’re saying, if the policies are actually being played out at the individual level for postdoc. So, um, if even the data that was being reported to you was the same as what was perceived to be, you know, the salary by the postdoc, um, him or herself, and then also, you know, the FOIA requests were only given to public institutions. And so you’re completely missing everybody who’s at a private institution. So that was a big question mark there. Um, so yeah, so anything else from your perspective to add about sort of why we started that aspect of the project?

Gary (30:01): Yeah, I mean, as you say, you know, for example, I have no data from Boston <laugh>, um, in the, the postdoc salary paper here because there’s no public institutions essentially there that we FOIA’d or that you can FOIA. So that’s obviously, you know, that’s an example of missing out a, a huge chunk of the population. Um, and, you know, then you’re asking the question, well, this is all for public institutions. Do we think the private institutions might be paying more or less or, or what have you? So again, getting people to self-report, um, you know, the quality of the data that we got for this paper, um, we had a lot of pre-processing, first of all, because, um, frankly, the data that we got, what we asked for was annualized salaries. What we often got was what had been through payroll, and again, with the example of people on fellowships, uh, if they were being paid directly, um, sometimes we would get these salaries back that were zero or a few thousand dollars. Um, and you know, the, the absolute legal minimum under federal labor law is 23,660. Um, and so we, we give institutions the benefit of the doubt and said, well, let’s cut off all the salaries, be below this certain level. That’s not to say all the ones above it or exactly what is being paid, but there was this element of nuance to the numbers we were getting and whether that would affect overall our data. So with the self-reporting, um, it’s nice to not only get private places, but also to get a sense of whether what people are reporting, um, matches up with what the institution is reporting. We, we knew for one institution, university of Washington, um, they had actually sent us excellent salary data. Um, and, uh, I was contacted over social media by someone on a fellowship there who said, oh, you know, you’ve been talking a little bit about how fellows are gonna be lower. Um, you know, I, I’m betting that my salary in Washington will look lower than it is. And I was like, well, all the Washington salaries look, you know, very, they’re all above NIH and they all seem like pretty good. So I just sent that person what their salary was in my data, and they said, oh, that’s exactly what I’m seeing. So it was even, it was really great to see that positive story of an institution that was, you know, giving us like, the data exactly that we wanted <laugh>. Um, so, and seeing that match up. Um, but yeah, I think it’s, it’s fun to, to have the, the, the effort online for people to self-report because it gives you, you know, we are obviously putting out salaries and we’ve repeated our data collection effort again for 2017 and 2018. And so we’re starting to gather that data now and we can keep putting that data out there. But I think it’s very useful also for, for this sort of self-reporting tool for people to go in and look and see what people are doing. And it also gives the opportunity for people to comment on issues that have come up. ’cause we also have benefits in there. Benefits is just a whole minefield with postdocs, even within the same institution. There can be all sorts of different benefits categories for all sorts of different titles of postdocs. So people self-reporting what they’re getting, and also just having a free form space in which to comment on things they experienced has been really interesting to look at. Um, and that sort of sharing of information, which is really what we’re very passionate about, that people are making informed choices and able to act on those.

Emily (33:17): I think that’s where we have such good overlap between, between you and I in terms of our missions and, and I am like all about more transparency around money in general, but salary, I mean, that’s a really difficult area, but we need more transparency around that too. So I agree. It’s so interesting to look into the database. Um, again, postdocsalaries.com, go there, enter your salaries, enter your benefit information. What I love seeing again is, uh, fellowship versus employee kind of stuff. That’s so interesting. And again, what the titles are. And, uh, we do have a section there for demographics as well, so that you guys, that that data is not, uh, publicly visible, but you guys are able to do that analysis on it to continue the questions of who’s being paid what and why. Um, and then my other favorite kind of section about this is regarding negotiating, which you brought up earlier. Um, the last time I looked, which wasn’t, it was maybe a couple months ago, about 25% of the people who had entered, you know, their information into postdocsalaries.com had negotiated something or is had attempted to. Uh, which was kind of a higher proportion that I was thinking, but it’s very encouraging. And so any, I would say any person who’s looking at taking a postdoc position should at least attempt to negotiate. It might not be successful, but, uh, you know, that’s what you would do for any normal job. And absolutely, this is, you are at a high level of training already. Uh, many of us consider it to be a job, whether it’s that officially or not. And so I think it’s a good encouragement just to see other people’s examples, just to know that other people are negotiating and you know, you can do it too. 

Gary (34:46): I think that has been one of the biggest surprises. And then, you know, it’s one of those things that when I knew that a lot of people must have been negotiating because the salaries were there, were salaries higher than what I was expecting. And then starting to talk about that with people. Yeah. 25% now, I actually think sounds about right. Like it’s, it sounds high, but it also is, I think reflects the, the, the data broadly. Um, and my favorite thing in talking about this too, because whenever I give a talk in an institution, I just love to bring up money and talk about money and usually under the, the auspices of, we’re not supposed to talk about this, so I’m not gonna talk about salary and like, what you should do about it. Um, and as you know, speaking to graduate students in particular, um, this should be one of the questions that you ask your prospective pi, and I am, you know, the not only to to get more money, which I think people deserve, but also frankly, how that question is answered will tell you a lot. I think about whether you want to work with that person, because someone who says no can give very different reasons and can be a person that you may, may or may not want to work for. For example, if someone says, I would really love to pay you more, you know, I only have so much of a certain grant, you know, we can look into applying for fellowships and I can give you some more money on top as a reward, which is a thing that also happens quite often. Um, you know, because essentially you’re saving me a salary so I can give you some money out of a, you know, another budget or something for, for that. Uh, as a, as a thank you, uh, versus someone who says, oh, why would I pay you more? Right? Like, why, why should I give you a higher salary? This isn’t about the money. Like, I think if a person tells you that you should really reflect on whether you wanna work for that person, because that could reflect other attitudes that they have about you and your role and your importance and so on. And, and whether you are a warm body in the lab versus someone that they really wanna see succeed and, and encourage. So I think that’s, it’s all part of gathering information and being, you know, making an informed choice, um, and realizing also that you are a bargain, uh, to these people and that, you know, you really should be pushing. If they want someone good, it’s good to try and push a little and see, see whether they’re, they’re willing to budge on some of these things.

Action Steps That Postdocs Can Take Today to Improve Their Salaries, Benefits, or Working Conditions

Emily (37:02): I love it. I love it so much. <laugh>. Um, let’s, let’s zoom back out a tiny bit. So, what can a person who is a postdoc today or expects to be a postdoc in the near future, um, what can they do, what can they get involved in that will help them improve either their salary or their benefits or working conditions or anything like that? What’s some action steps that postdocs can take today?

Gary (37:24): Sure. So, um, always having data to hand is such a useful thing. So both for the individual, but also for groups who are trying to advocate. You know, we hope that the data like this gives a, um, gives a somewhat of a mandate to say, Hey, you know, here are salaries that people are getting, um, that, that are, you know, are in my field or at this institution or what have you, and, you know, or this is what your policy says and this is what you should be doing. Really trying to go in with, with that, particularly on the personal level is good. Um, we found that, um, what was a nice example was that when we were comparing various institutions publicly, we found that there were administrators at institutions who were trying to push for raises who had faced opposition. Um, suddenly we’re able to say, well, we’re being compared with everyone else on this list and we don’t look very good compared to our, our aspirational peers or our, you know, whoever they’re comparing themselves to. And if we wanna be competitive for postdocs, um, that, you know, that then they were having success with that. So for groups who are looking to push for change at an institution, um, you know, there’s a number of lines of evidence. Um, we have, uh, various resources at our, our website on postdoc salaries that we hope are useful for people trying to push for those change at institutions. Again, comparing with the peers is always a useful one. Um, also pointing out the recommendations that there are, I think our most recent recommendation is that the salary should be at least 50,000 then has cost of living adjusted locally, then also has years of experience. Um, and, uh, yeah, that, that these are the recommendations that are out there, that this is what institutions should be doing. Um, you know, we see varying success with this, uh, at various institutions. It depends who’s there to be honest, and, and whether they feel they are concerned about this or not. Um, I would definitely recommend to institutions who are in the Midwest, um, or who are at places where there’s a, um, you know, there’s some institutions you go and they’re like, oh, we really struggle to get quote unquote good postdocs. Um, not quite sure exactly what that means. I think it’s a little bit of, you know, we are not in Boston, so we struggle to get all the people who just apply to Boston. But that’s a good point of, you know, if you’re in institution that shows that you can pay more and live somewhere in the Midwest, which has a lower cost of living, you actually may attract more people at this time when, you know, people are struggling to be able to afford to stay in academia, to be perfectly honest. So, so I think these are all good buttons to, to try to push. Um, and now that we have this data here as a baseline to start working with, working with, um, hopefully that’s, that’s a useful thing to, to use as evidence.

Emily (40:13): Yeah, absolutely. And the, the listeners can participate in this by again, going to postdocsalaries.com and entering their information and telling your colleagues and your friends about it too, and just continue to spread it. I think as of this recording, we have about 1200, um, entries, which is decent, but like, let’s keep it growing. Absolutely. Um, and you guys will keep going on the public institution side of that effort. So I would say particularly if you’re at a private institution, it’s even more important to get out this self-reporting, uh, mechanism because there’s not another good way to get at the data, at least that we know of right now. So, yeah. Gary, thank you so, so much for, for joining me today and I look forward to, you know, continuing to work together on this.

Gary (40:54): Yeah, for sure.

Conclusion

Emily (40:56): Gary, I’m so glad you joined me on the podcast today for this important conversation. Show notes for this episode are at pfforphds.com/S2E3. If you wanna get in touch with me, you can email me at [email protected] or find me on Twitter @pfforPhDs or Facebook Personal Finance for PhDs. If you’d like to receive updates on new podcast episodes and other content, go to pfforphds.com/subscribe. See you in the next episode. The music is Stages of Awakening by Poddington Bear from the free Music Archive and is shared under CC by NC Podcast. Editing and show notes creation by Jewel Lipps.

Negotiating PhD Funding Offers: This Grad Student Did It Successfully

January 28, 2019 by Jewel Lipps

In this episode, Emily interviews John Vsetecka, a second-year PhD student in History at Michigan State University. When John was a prospective PhD student, he attempted to negotiate the stipend and benefits of the three admissions offers he was seriously considering. John shares exactly how he initiated the negotiation process and the outcomes at each of the universities. His negotiation method is well-researched and well-considered and is applicable to many if not most other prospective graduate students. John and Emily also discuss how prospective PhD students should combat imposter syndrome during the admissions process.

Links mentioned in episode

  • Tax Center for PhDs-in-Training
  • Volunteer as a Guest for the Podcast
  • PhDStipends.com
  • GradCafe 
negotiating PhD offer

0:00 Introduction

1:05 Please Introduce Yourself

John Vsetecka is a second-year PhD student in the Department of History at Michigan State University. He studies modern Ukrainian history, with a focus on the 1932-1933 famine. Before beginning his PhD program, he worked as a GEAR UP advisor. This is a federal grant agency that works with low income students, called Gaining Early Awareness and Readiness for Undergraduate Programs. He worked in Colorado to help middle school and high school, low income students prepare for college. Before this job, he got a Master of Arts in History in 2014 at the University of Northern Colorado.

2:55 What PhD offers and interview requests did you receive from universities?

When John applied to PhD programs, he applied to eight schools and faced some rejections. He considered four offers, then narrowed his list to three. The first offer he eliminated would have required that he start with MA and work into PhD. Since he already had an MA, he felt he was ready to move on. He seriously considered three offers. He accepted the offer from Michigan State University, where he is now. He visited “University 2” in person for an interview. He had a virtual interview with “University 3.”

4:21 What did you think about the offers from these three universities?

John wasn’t sure what a fair offer was for a PhD position in History. Generally, PhD students are shy about sharing their financial experiences. So he did research and his mentor from the University of Northern Colorado guided him in this process. He talked to other PhD students, who would say they had enough to live on or that they were struggling. He used the websites GradCafe and PhD Stipends. He got a sense of what people were being paid, including their health insurance and fees. From all of this information, he decided two offers were fair and worth considering.

Emily shares an important piece of advice for prospective PhD students is to do your research. Anonymous databases, like PhD Stipends, provide more transparency around these offers. But you should talk to current graduate students, because it’s one thing to look at the numbers, and another thing to get a feel for how it is to live on that amount.

Further Reading: How to Read Your PhD Program Offer Letter

7:54 How did you initiate the negotiation process for your PhD stipend offers?

John negotiated his stipend offers during his interviews. He went to visit two universities in person for interviews, and had a virtual interview a University 3. His first interview was at University 2. During the visit, they have an itinerary and fully scheduled day. The experience is like a whirlwind. He prepared a set of questions for faculty members and set of questions for Graduate Director. With the Graduate Director, he talked about the PhD program as a whole to get their insight. Then he directly asked the Graduate Director if there is any other money available, such as other fellowships, and explained that he has other offers with higher financial value. The Graduate Director is the one that can control the money. The faculty can only put in good word on a student’s behalf. So as a prospective PhD student, you should know who you can talk to and know who you can negotiate with. You don’t need to be afraid to ask tough questions about financial aid.

The PhD program interview was a good time to negotiate PhD stipend offers. John waited until he received all offers to see where he stood across the field, and this gave him some leverage. Negotiating like this is is what people do with any other job. John told the Graduate Director that he had other offers, but he didn’t show them the letters themselves. Negotiating before receiving all other offers and before the interview can seem desperate. But if he negotiated after the visit, it might seem like that offer wasn’t his first choice and he was only negotiating after losing another offer. John also believes that talking in person is the best type of communication. Negotiating in person puts them on the spot.

During his interview visit for University 2, John asked the Graduate Director about the potential for a better financial package. The Graduate Director told John that they would get back to him a couple hours. Later that day, John received an email with a offer for a fellowship package. This showed John that they were willing to work on his behalf. He was surprised by this because he had expected them to negotiate and push back. During the interview visit, the department is most focused on recruitment, so they quickly considered his request and acted on it.

John went into the meeting with a set plan for negotiation. He had a notebook and visibly took notes during the conversation, which indicates that he took the negotiation seriously. Treating graduate school interviews like a professional scenario sets you up for success.

14:35 What new offer did you receive after negotiating?

Because he negotiated with the Graduate Director, John received an offer of a university fellowship instead of a teaching assistantship. The new offer was university-based funding, not department-based funding like his original offer. The university fellowship had different teaching requirements than the department teaching assistantship. It was more money in total, as well as better health care coverage. This showed what kind of control the department and university has over financial awards for PhD students. Even if the university can’t raise stipends, they can cover more fees or provide better benefits.

16:22 What outcomes did you get from negotiating with the other two universities?

John learned that not everyone would negotiate. At Michigan State, he had a generous offer that he was already happy with. Even so, he asked the Director of Graduate Studies at Michigan State about his financial award. The director kindly told him that his original financial award was what the department was willing to offer. John later learned that his department offers different financial packages based on a tiered system, and he was happy with the offer he received.

At University 3, John had a virtual meeting with the department. John brought up that he had offers with much more value than what they had offered him. John says that honestly, he was displeased with University 3’s financial offer. He learned that due to financial constraints at University 3, the department couldn’t offer more money. The department suggested term-to-term options. John didn’t want to be on his toes every semester wondering if he’d get paid. Though University 3 offered paid tuition, the money offered for teaching/research was not enough to even consider.

It’s important for prospective PhD students to recognize that some offers only tell you about the first year, while others present a five-year plan for funding.

19:35 Based on what you experienced, what would you do to negotiate differently?

John says he wouldn’t change much. While he knew negotiation was possible, he personally didn’t know anyone in his cohort group that negotiated their stipend offer. John heard from his advisors and mentors that it’s ok to ask, but you have to know to ask. John says this is one of those hidden things in academia. If prospective graduate students receive multiple offers, this is a chance to use offers against each other.
even if you get one offer, be happy, but if you get more offers you can use them

Emily brings up that often, applicants don’t feel a lot of confidence. They often think, “Who am I to be receiving these offers?” This imposter syndrome deters prospective PhD students from negotiating their stipends and ensuring that they receive the best offer.

22:27 How did you know negotiating your PhD offer would be possible and welcome?

John’s MA program advisor told him how to negotiate PhD stipend offers. First, you have to apply to multiple universities and know their programs well. Second, you need to know who you want to work with. Third, you need to talk with current graduate students. This is the most important advice. If you find their email on department websites, you can email them directly. Fourth, online communities like GradCafe help you connect with people who can help you.

John says that graduate school applicants should treat a PhD position like any other job. John says this profession should not be excluded from the process of negotiation. John’s experience at GEAR UP, where he helped low income students fight for undergraduate school money, showed him that there is a lot of money out there. He says it’s unfortunate so many undergraduates go into a lot of debt, when there are all types of money out there for different skills and talents. John wonders why graduate students can’t have that money too? There are different organizations, based in different fields, but money is out there. He suggests prospective students apply to everything they’re qualified for, but they also ask universities and departments what they can give.

Emily adds that prospective PhD students need to consider cost of living. If you have school A versus school B with higher stipend and in lower cost of living, you can ask the school A’s department what they can do to make the offer comparable.

26:44 Has your negotiation had any lasting impact on your graduate career?

John says the negotiation process doesn’t stop when you receive your final offer. Negotiation is a longer standing issue to think about in the future. At Michigan State, John and his peers negotiate for conference money, travel money, research money for the summer. Some graduate students can’t find money beyond teaching assistantships. Because he considered these benefits in his financial offer, he accepted a position that allows him the time and money to not worry. He has summer funding and he can teach online. For instance, he taught a seven week class online while being in Ukraine for research. He chose a school with an institutional investment. The department is doing well and it is investing in its students. He saw that the department was willing to invest continually in their students. He thinks the investment will continue after he graduates.

29:33 Final Comments

John says prospective graduate students should feel free to reach out to him. He likes to help in any way he can. When you get your offers, the first thing you should do is celebrate, and get a round of applause. After celebrating, look over your financial offer, and look beyond stipend to health insurance and benefits. If you get multiple offers, compare them. Be confident about your acceptance into a program and don’t be afraid to negotiate. Know that you have power in these situations. Even though graduate students often don’t have much power, this is the situation where you do. You have all the power and you should use it while you can.John treated PhD offers like job offers because it’s also a job, in literal and figurative sense.

31:27 Conclusion

As a Single Parent, This Graduate Student Utilizes Every Possible Resource

January 14, 2019 by Jewel Lipps

In this podcast episode, Emily interview Lauri Lutes, a fourth-year PhD student at Oregon State University and single mother. Lauri’s stipend is equivalent to the local living wage for just one adult, yet she supports herself and her daughter on it without using student loans. Lauri details how she makes ends meet by taking advantage of every possible university and community benefit, such as subsidized and free childcare, food assistance, and recreation and arts scholarships. Lauri additionally serves her community by advocating for graduate student parents on two university boards.

Links mentioned in episode

  • Tax Center for PhDs-in-Training
  • Volunteer as a Guest for the Podcast
  • MIT Living Wage Calculator

resourceful grad student

0:00 Introduction

1:02 Please Introduce Yourself

Lauri Lutes is a PhD student at Oregon State University. She studies viruses on sweet cherry trees. She has an 8 year old daughter and she’s a single mom.

2:19 What is your current annual income and expenses?

Lauri’s graduate stipend is $24,000 per year. Her assistantship is assured for her entire PhD, for either teaching or research. Her modest estimate of her current annual expenses is $27,000 to $30,000. These expenses cover a bare minimum, like paying rent, and don’t include expenses like a car payment. Her estimates don’t take into account her supplemental income from food assistance programs.

According to MIT’s Living Wage Calculator (livingwage.mit.edu), the living wage for one adult with one child in Benton County, Oregon is $51,000 before tax/$42,000 after tax. In order to live with her daughter on her Oregon State University PhD stipend, Lauri has to take advantage of every possible resource.

4:24 What benefits do you receive and how did you find these benefits?

When Lauri was considering graduate school, her daughter was four years old. Lauri was most interested in Pacific Northwest universities, and she was surprised to learn that Oregon State University offers resources to help graduate students who are parents be successful.

Lauri receives two main benefits from the university. First, she receives a childcare subsidy that is provided through student fees and donor funding. Through the childcare subsidy, up to 50% of childcare expenses are covered. This subsidy is applicable for childcare for very young children before they’re in school, as well as for before and after school programs for children in public school. Lauri says it’s rare for a university to offer this assistance, and for the subsidy to cover up to 50%.

Second, Lauri receives assistance for non-school childcare. Oregon State University has two childcare facilities that are drop-in for up to three hours per day. This service is free. The childcare facilities are located in the library and in the recreation center. They are open from 10am to 7pm on the weekends and during the weekdays as well. They accept children on a first-come, first-serve basis, but Lauri has not had problems with accessing childcare from these facilities. Student workers from child development, education relevant fields are the childcare providers. Lauri says the facilities are a well-managed, reliable resource for student parents.

9:31 What is your daily routine like? Is your advisor supportive?

During Lauri’s first couple of years in her PhD program, she served in orchards throughout the entire State. Lauri had to take day trips and overnight trips for her work. She relied on friends and her community for help. Lately, she is in the lab for most of the day. She tries to keep a 9 to 5 work schedule. Her work doesn’t require her to be in the lab on the weekends. When she does travel, the bulk of her work is in the Columbia River Gorge, which is three hour drive from her university.

Laurie says she has an incredibly supportive advisor. She says she is fortunate that her advisor doesn’t make her compromise her parenting for her work. During her graduate school interviews, Lauri didn’t emphasize that she had a daughter, but she didn’t make it a secret. She encourages other people to consider how their potential advisors would support them.

13:06 Tell us about your service experience on advisory boards and committees.

Lauri was invited to join the advisory board of the university’s Family Resource Center. She viewed this as a place to get her voice heard, and to give a voice to graduate student parents. The advisory board decides on the budget for student fees, where that funding goes under the umbrella of the Family Resource Center. This budget includes the childcare assistance stipend, which is available for students with families on campus and employees with dependents.

Additionally, Lauri is the graduate student representative on the committee for children, youth and families in the university’s faculty senate. This committee reports directly to president of the university. To Lauri, this seems like they can make changes on the university level. This committee considers the university experience of students and faculty with dependents, not limited to only young children. Lauri says they want to cultivate a culture of care at the university, that includes being able to support students and faculty in whatever is going on in their lives. When employers are sensitive to family and personal issues, people are kept in the workforce.

17:34 What strategies do you use to keep expenses down?

Lauri emphasizes how important it was to let go of the stigma of needing help and asking for help. Before graduate school, Lauri had a stable position in industry and an income to support herself and her daughter. Graduate school brought a drastic change in income which was difficult to accept and deal with. To achieve her goal of getting a PhD, she had to use university and community resources.

Lauri uses the food bank on campus, and has let go of the stigma of actually going to food bank. Food insecurity is not only experienced by people with families. It is an all too common issue being discussed at many universities. Over half of Lauri’s income goes to rent, and there is no way for her to make that better. Lauri says one way to supplement her income is in food assistance. She says she has to accept that this is where she’s at right now. Oregon State University manages a twitter account @eatfreeOSU that provides centralized posts of where there is leftover free food from events. Some people rely on free food from seminars.

Lauri gets some funding through the SNAP food assistance program. She applied online, which she says was a fairly easy process, and had a phone interview. She had to prove her income initially and again every six months or whenever her income changes. SNAP benefits are for her daughter, not for use by her. The State of Oregon provides information for SNAP online. Oregon State University’s Human Services Resource Center is very helpful for students. Not every university has a centralized center for finding food assistance.

Lauri is enrolled in Mealbux, a university program funded by student fees. She applies every term. The application is a questionnaire about a student’s income and food insecurity situation. The funds are loaded onto the student id card for use on campus. This assistance is specifically for Lauri. Mealbux helps with a student’s sense of belonging on campus.

Lauri recently moved her daughter to school closer to home. At this new school, her daughter participates in free lunch program. Lauri has a car that is very old so she doesn’t have car payment. She rarely uses her car and expects it to break down anytime. She uses her bicycle to get around. She knows food expenses are hard to minimize.

Lauri finds community resources in many places. Local parks and recreation department has scholarships available, such as one that allowed them membership to community pool. Her daughter gets scholarships to take classes, like dance class or painting class. These are things Lauri wouldn’t be able to afford otherwise. Another resource is the Arts for All programs that provide inexpensive tickets to theater events. Lauri says don’t be afraid to apply for help and scholarships. She wants to give her daughter opportunities that she can’t afford on her own. She’s always looking for resources and she’s not afraid to take advantage of available programs.

30:30 Why have you chosen to this frugal strategy instead of taking out student loans?

Lauri has debt from her undergraduate education. These loans are deferred, but they are looming over her. She does not want to contribute more than she absolutely has to. She did take out a few loans to help transition into the PhD program. She has $30,000 loans for undergrad, and she’d rather make sacrifices now than contribute more to debt.

Lauri used to make living wage and be comfortable. Her goal isn’t to increase her wages with her PhD. Her field, plant pathology, is not known for high wages. She wants to be open to a postdoc position after graduate school. She expects to make similar wages as she did in the industry job she had with a Bachelors degree. She went to graduate school for education, fulfillment, and opportunity. When she finishes her PhD, she won’t make a lot of money that she can use to pay off debt. Emily adds that it’s challenging to pay off debt at any time.

33:55 Final Comments

Lauri advises graduate student parents to take advantage of resources. Search for them, ask about them, and talk to others about possible benefits. By diving into resources, you’ll become aware of more. She believes that getting a PhD is worth the financial sacrifice. Though it is a financial challenge, don’t give up on your dreams.

34:55 Conclusion

An Unfunded Summer Didn’t Deter this PhD Student Thanks to Her Creative Side Hustle

December 24, 2018 by Emily

In this episode, Emily interviews Bailey Poland, a rising second-year PhD student in rhetoric and writing at Bowling Green State University. Bailey earns a stipend of just $14,000 for the academic year, but manages to live a comfortable life thanks to her disciplined budgeting and two side hustles. Unlike many of her classmates, she devoted her first summer as a PhD student exclusively to research, relying on her side hustle income and savings from her stipend to tide her over until the next academic year started. Emily and Bailey discuss in detail Bailey’s housing choice, frugal habits, and unique Patreon side hustle that complements her graduate work.

Links mentioned in episode

  • Personal Finance for PhDs Membership Community
  • Volunteer as a Guest for the Podcast
  • Frugal Month
  • How to Financially Navigate an Unfunded Summer
  • Bailey Poland’s Patreon

unfunded summer PhD

0:00 Introduction

1:26 Q1: Please Introduce Yourself

Bailey Poland is a second year PhD student in the Rhetoric and Writing program at Bowling Green State University. Bowling Green is a city in Ohio, located to the south of Toledo, Ohio. Bailey’s stipend is $14,000 per academic year. Additionally, Bailey earns $460 per month from Patreon and $150 quarterly from copy-editing a music magazine focused on Texas. She is the only person in her household.

Bailey’s PhD stipend does not include summer funding. She budgets savings over the academic year in order to meet her expenses over the summer.

3:25 Q2: What are your five largest expenses each month?

Bailey’s largest expenses are rent at $600 per month, car payment at $200 per month, health insurance and fees at $400 per month, food at $150 to $200 per month, and car insurance at $112 per month.

4:14 #1 Expense: Rent

Bailey rents a two bedroom apartment for $600 per month. She says this rate is higher than other options available in Bowling Green. She looked at options for rent at rates of $350 to $450 per month, but these apartments were in poor quality or clearly undergraduate housing. Bailey used to own a house, so she approached her apartment search with those expectations.

Bailey’s apartment is in downtown Bowling Green. She walks to campus, so she doesn’t use her car or have a university parking pass. She drives to the grocery store, but she lives above a coffee shop. She thinks she is in the perfect location. She lives by herself in the two-bedroom apartment, so she sleeps in the smaller bedroom and uses the extra bedroom as her office and library.

6:18 #2 Expense: Car Payment

Bailey pays $200 per month for her car. She has a 2017 vehicle that she bought new. She traded in her older Toyota Corolla when she bought her new car. Due to unfortunate family circumstances, Bailey received money from inheritance and estate closure. She used this money for her car payments. She has stayed ahead of interest and has gotten ahead on payments.

8:06 #3 Expense: Health Insurance and Fees

Bailey pays health and insurance and fees in lump sums a couple times a year. The amount works out to about $400 per month. She uses her credit card to make the payment at the start of each semester, but she pays it off immediately. Her credit card pays back 1.5% so she received a small kickback. Generally, she doesn’t keep a balance on her credit card so she avoids interest payments.

She made her first health insurance and fees payment before she received any of her graduate school stipend. Because she formerly worked as a marketing analyst for global HR and payroll company, she had enough savings available to make this payment when she started graduate school. She chose to go to graduate school because she was much happier in a classroom than behind a desk in a corporate office.

10:25 #4 Expense: Food

Bailey pays $150 to $200 per month for food, which includes groceries and dining out. She plans and prepares meals ahead of time. She cooks two or three times a week and freezes leftovers. She takes food with her to campus.

She has a limited set of go-to recipes. One of her favorites is chile garlic tofu. She says the meal is filling and takes half an hour to prepare. She gets four meals from one block of tofu. She eats lots of eggs, pasta, and rice-based meals. Her vegetarian cooking has increased since she started PhD program.

Bailey learned meal preparation from trial and error in the first few months of graduate school. She figured out which meals took too long or she didn’t like enough to have leftover. She used the Budget Bites website to find recipes. She cooks on the free nights of her week, because she knows which nights she’ll want to eat dinner as soon as she gets home. Bailey is on campus from 8am to 6pm most of the week. The latest she gets home is 7pm or 8pm. She takes lunch and a small snack with her to campus, and she eats dinner at home.

14:51 #5 Expense: Car Insurance

When Bailey purchased her new car, her car insurance rate increased from $85 per month to $130 per month. She has a plug-in for diagnostics of her driving habit, which lowered her insurance rate to $112 per month. She only regularly drives to and from the grocery store, which is a 10 minute drive. She also drives to her mom’s house, which is 30 minutes away and all highway driving.

Bailey says graduate students can get by without a car in Bowling Green. In her PhD cohort, at least one person doesn’t have a car. Busses run regularly to and from campus. Grocery stores deliver for a fee. Local activities are accessible to pedestrians. Bowling Green does not have cabs, Uber, or Lyft. It is pretty rural. Bailey needs a car to leave town to see her family.

18:10 Can you tell us about your side hustles?

Bailey has two separate side hustles. For one, Bailey copy edits a magazine about the country music scene in Texas. She missed doing copy-editing work, so she posted on Twitter that she was looking for an opportunity. Someone from the magazine responded to her and said they’d pay her to copy edit. Bailey has had this side hustle for three years. She receives $150 every few months and she has learned a lot about a topic that is unfamiliar to her.

For another, Bailey uses Patreon, the crowdfunding platform for artists and creators. She receives $460 each month from Patreon. She got started after she defended her Master’s thesis and she quit her corporate job earlier than she had planned. She was working at a bookstore and she needed more income. Some of her friends had Patreon, so she was familiar with the platform. Bailey started by doing live readings of The Rhetorical Tradition, like live tweeting her readings with funny commentary. People got invested in her live readings and she transitioned the activity to Patreon. Reading The Rhetorical Tradition was a really long project. She planned in advance and read as much as possible during the summer so she wouldn’t need to read during her first graduate school semester. She planned to post about The Rhetorical Tradition on Monday and Friday, post photos of her mom’s three cats on Tuesday and Thursday, and post an essay style blog post on Wednesdays. She only writes one or two truly new posts per month. With her PhD work, she doesn’t have time to write four or five new posts a month. Recently she has started a new reading series that overlaps with her prelim list for her PhD. She is gaining familiarity with texts in her field, having interesting conversations with her patrons, and making some money.

Bailey has created a very niche platform. Starting a Patreon was a huge leap of faith. She used to be super active on Twitter with a group of 18,000 followers. She authored a book, which helped her gain an audience invested in her thoughts. She trusted that her audience would move with her from Twitter to Patreon. She front loaded the work during the summer, so during her first semester it was more like a passive income stream. Now it serves multiple purposes for her. She finds it fulfilling that her academic work is accessible to the public. Her work lately is archival, and through Patreon she can share what it’s like to work in an archive. Bailey finds joy in her patrons and appreciates that they pay for her to do this work.

26:35 How do your colleagues react to your side hustle? Do they take on side hustles?

Bailey says her colleagues know and are supportive. For example, Bailey did a public series on Patreon that was a reflection on teaching practices she learned at Bowling Green. Her program’s website’s homepage included a link to her series. Generally, PhD students are discouraged from outside work because they should focus on doctoral work, but her department gives no formal prohibition of outside work. Most other graduate students have some other work, though it may not be talked about.

During the summer, other PhD students in her department find jobs. Some find online teaching roles, and one is working in the garden center at Lowe’s Hardware Store. One is going to a writers retreat that comes with a stipend. PhD students with spouses don’t work or find part time work.

29:28 Q4: What are you currently doing to further your financial goals?

Bailey has a 401k from her corporate job that she will roll into a Roth IRA over the next few years. She has investments with Betterment that serve as her long-term emergency funds. She has a high earnings online savings account as her primary emergency fund. Her goal is to have three months of expenses saved, and she is $600 short of her goal. Generally, her goal is to have her retirement well planned. She wants to be in academia long term, but she can’t be certain about this path. She wants security and confidence during her job search. Having savings going into graduate school frees up opportunities.

During her first summer as a PhD student, Bailey is working on archival projects and taking a class. During the school year, Bailey has multiple things going on, like classes, teachers, committees, conference planning. Summer is really valuable to devote focused attention to a project. In subsequent summers, it is possible she will take teaching jobs.

34:30 Q4: What don’t you spend money on that might surprise people?

Bailey doesn’t have student loans. She paid all of her loans within two years after undergrad. She hasn’t taken out any loans for higher education. Because she went to a State school, had scholarship, and finished in three years, she had very manageable loans from her undergraduate education. She took a job after college right away.

She has stopped buying books, which is hard for her personally. Even if she buys used books, it adds up quickly. She tries to keep miscellaneous spending low every month. She used to buy $200 to $300 worth of books every month, now she just buys one book a month. She checks out a lot of books from the library, and she lives less than a block from local public library

She doesn’t spend a lot on hobbies. She likes to cross stitch. This is inexpensive and takes a long time. She can spend $20 on one project that entertains her for five months. She has hobbies that help her relax and are not difficult for her budget.

39:00 Q5: What are you happy with in your spending and what would you like to change?

Bailey’s rent is higher than she wants to pay and is more than what others pay. She negotiated for lower increase rate when she renewed her lease. She’s considering doing a spending fast over the summer because she has no stipend coming in. She wants to minimize the hit that her savings is taking. She can find entertainment in Bowling Green for free. For example, there is a huge arts community and a massive arts festival.

42:12 Q6: What is your best advice for someone new to your city who is budget-conscious?

Bailey recommends that someone new to Bowling Green shops around for a place to live. There a lot of good options. Graduate student housing is affordable and it is easy to find a roommate. She says to look for an apartment as early as possible. She started looking in July, which limited her options. She would have looked earlier if she knew.

She advises new PhD students in Bowling Green to plan on saving. She says make sure you have cushion before you get here. Graduate school is stressful enough without living paycheck to paycheck. You should get rid of debt completely if you can.

44:22 Q7: Would you like to make any other comments on what it takes to get by where you live on what you earn?

Bailey says it is definitely possible to live in Bowling Green frugally and have a good time. She says there is always stuff happening that’s free or inexpensive. Toledo is a twenty to thirty minute drive. It may not be possible to live on the stipend alone, but you don’t need much more. Bowling Green has a low cost of living and is a college town invested in the university community.

45:22 Conclusion

Travel and Savings Are This Frugal Grad Student’s Top Priorities

October 22, 2018 by Emily

This podcast episode is a budget breakdown with Latisha Franklin, a third-year graduate student in biochemistry and molecular biology at Penn State University. Latisha works to keep her housing and especially food spending low so that she can spend more on experiences, such as her yearly international vacation. She employs several powerful strategies in her frugality and budgeting to enable her saving, such as taking out cash for variable spending, prioritizing a “me” budget category, vegan meal prepping, and actually reading her email to find free food on campus. Emily and Latisha discuss how establishing a routine schedule lends itself well to developing frugal practices.

Links mentioned in episode

  • Personal Finance for PhDs Membership Community
  • Volunteer as a Guest for the Podcast
  • Frugal Month
  • Investing for Early-Career PhDs

Subscribe on Apple Podcasts, Google Play Music, Stitcher, or Spotify.

Give your feedback on Season 1 and influence the direction for Season 2 through this form.

frugal grad student travel saving

0:00 Introduction

1:14 Q1: Please Introduce Yourself

Latisha Franklin is a third-year graduate student in the Biochemistry and Molecular Biology program at Penn State University. She moved to State College, Pennsylvania, for graduate school from her hometown Mobile, Alabama.

Her stipend is $1,996 per month after taxes.

2:27 Q2: What are your five largest expenses each month?

Latisha’s top expense categories are rent, car insurance, food, bills, and “me,” in other words, money she can spend freely on herself. She shares that she budgets much of her income for her Roth IRA and savings.

3:57 #1 Expense: Rent

Latisha lived in a one-bedroom apartment with her dog at the time of the interview. However, she had plans to move. Her rent was $820 per month and the rent in her new place is $710 per month. Originally, she wanted to move to a new place with a roommate. When those plans fell through, her realtor helped her find the new apartment.

Her new apartment is attached to a house. She has access to a backyard for her dog, which was appealing to her. Her new apartment is closer to Penn State, a 5 minute drive and 20 minute walk from campus. The neighborhood is family-oriented. This is in contrast to her former neighborhood that had a good mix of graduate students, young families, and late-career adults.

Latisha thinks Penn State graduate students living alone pay about $900 or more for rent. She thinks that $700 is the low end of the range for rents. In her estimates, she is not taking into account possible lower rents in shared housing with roommates.

8:29 #2 Expense: Car Insurance

Latisha has a 2016 Hyundai Tuscon. She bought the car new in winter 2015 and paid it off completely within two years. She used savings she had been building since middle school to buy the car new. Her monthly insurance payment is $159.

10:22 #3 Expense: Food

Latisha spends $150 per month on food. She spends $20 each week for food that she’ll eat during the week, and $50 each month to buy items she’ll use throughout the month. Her strategy to keep food expenses low is to meal prep and cook in bulk.

During her first year, she found herself cooking every other day. Cooking was too time-intensive, so she read articles about meal prepping. Now, she uses Sundays as her meal prep and cooking day. She makes enough to last the week and portions food into six or seven containers.

Latisha didn’t have any dietary restrictions or considerations during her first year in graduate school. She has now removed meat and dairy from her diet. She uses many kinds of beans, rice, nuts, and fruit in her meals. She buys fruit from the farmers markets and from her share of community supported agriculture (CSA).

Her meals include muffins, which she eats every week, salads, soups, and pastas. Additionally, Latisha eats free meals on campus as often as three times a week. She takes ten minutes each day to read her university emails to find events with free food that also match her interest. She rarely eats take-out or at restaurants, and this expense is from her “me” category.

18:54 #4 Expense: Bills

Latisha’s pays for electricity and wifi, because heat and water are included in her rent. Her parents pay for her cell phone bills. The electricity bill is $13 per month and wifi bill is $32 per month. To keep electricity costs down, Latisha makes the most of daylight for work. During the evening, she relaxes and minimizes her electricity use.

In her new apartment, she will have to pay for all utilities separately. She’ll have more bills, so she has planned to increase this budget category.

21:38 #5 Expense: “Me,” or Variable Spending

Latisha budgets about $20 a week, or strictly $100 a month, to spend as she wishes on herself. Typically, she uses this money to go to the movies, go out to dinner, or try something new. She bought herself a microscope because she enjoys using it to look at everyday items. Overall, she prefers “experiences, not stuff.”

Latisha’s strategy is to keep her “me” budget in cash. Using cash is strategy to keep variable spending in check. She mentions that credit cards didn’t suit her.

25:17 Q3: What are you currently doing to further your financial goals?

Latisha prioritizes savings. Since her teenage years, she kept savings for undetermined large purchases. For example, she bought her new car with her savings, even though she hadn’t intentionally planned the purchase.

She contributes $150 per month to a Roth IRA for retirement. She saves $50 per month in her savings account. This is about 10% of her net income. She is focused on building her Roth IRA

She started savings with a CD, about three years ago, without much knowledge of savings or investing. Her dad encouraged her to get a Roth IRA. Latisha read Emily’s emails and is now working on better managing her Roth IRA.

Latisha has set a goal to take one big trip a year. Here she discusses saving for her trip to Iceland. She has budgeted about $100 per month and has $1,200 saved at the time of the interview. She likes to travel and wants to get out and see the world while she has minimal responsibilities. Iceland is the first big trip that she has initiated on her own.

33:24 Q4: What don’t you spend money on that might surprise people?

Latisha spends very little on food. Many of her peers claim to not have the time to cook, so they get take out or eat out more often. She found the time on the weekends to prepare all her meals for the week, so she saves time during the week. Emily and Latisha agree that in reality, getting take out or going to eat can take just as much time as preparing your own meals. Prioritizing cooking your own meals is a great frugal strategy.

35:34 Q5: What are you happy with in your spending and what would you like to change?

Latisha is happy that most of her money goes to experiences, not things. She wants to add money to food, because she believes trying new kinds of foods is a good experience. Joining the CSA is one way she is trying new foods. She is interested in new fruits, like dragonfruit. Additionally, she is happy has “cushion money” so she is prepared for anything.

36:48 Q6: What is your best advice for someone new to your city who is budget-conscious?

Latisha recommends over estimating your budget so you have cushion money. This reduces stress and helps even out irregular expenses. One strategy that Latisha uses is to set up separate accounts for her money. For example, she moves her income out of her spending account into a reserve account. This restricts how much money is available for her to spend, but the money is still accessible if she really needs it.

Latisha also recommends personalizing your budget. She has had financial training that emphasizes certain income percentages for budget categories, but this advice doesn’t suit her lifestyle. She realized this when she went through the process of purchasing a home but ultimately could not get approval. During the process to buy a home, she found that financial advisors insisted that 50-60% of income is budgeted to living expenses. Though she was frustrated she couldn’t buy a home, she is glad she went through the process and would recommend the experience to other graduate students.

44:46 Q7: Would you like to make any other comments on what it takes to get by where you live on what you earn?

Latisha takes the bus for her commute. She does not use her car for every day commuting, just for irregular driving, like taking her dog to the groomer. Penn state has a graduate students bus ridership program that Latisha says is a $180 one time fee, then free riding for the entire year. Just a few rides each month would make the pass pay off. She says this is definitely worth it.

Latisha says her budget is possible because she manages her time carefully and sticks to a routine. Her budget is a result of her focused lifestyle. Emily and Latisha agree that budgeting is easier and more accessible when you recognize the patterns you have in place in your life.

48:30 Final Comments

Latisha and Emily hope listeners learned more about frugal strategies for living on a graduate stipend.

48:45 Conclusion

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