We have been looking into buying a car lately – used, but
newer and more reliable than the 1996 Honda Accord we drive right now. During
this process we’ve checked into getting a small auto loan in order to leave a
little bit of breathing room in our savings, since our income is relatively
irregular – I receive three stipend checks during the school year from the
university, we get a small monthly stipend (again, during the school year) for
our work as residence staff, and Tricia’s work as a doula involves payment from
clients after babies are born (quite an unscheduled thing!). Most of Tricia’s
clients are non-paying, too, as she does a lot of her work with Chicago
Volunteer Doulas, a (fabulous) group that offers free services to low-income
mothers.
So we went to our bank (Chase) and ran into a problem with
applying for a loan. The bulk of our income is my doctoral stipend from the
Divinity School, which for the 2011-2012 school year was $21,000. However,
because this was stipend money coming from a degree-granting educational
program, the loan representative would not count it as income.
I had a long and aggravating discussion with the
representative trying to figure out why they have this policy about education-related
income. I couldn’t really get out of him what exactly distinguished academic
labor from other sorts of labor in the eyes of the bank. He ended up explaining
that student remuneration was different than regular income because I could
leave the doctoral program at any time and then I wouldn’t have the stipend any
more. I suggested that he could
leave Chase at any time and he would lose his income as a banker too. He told
me that we weren’t talking about him. I gave him a long speech about trying to
feed my kids and how their policies are just making it more difficult for
people who are just trying to get by, but there wasn’t much more to say that would
have changed the immediate situation regarding the status of my stipend.
So, long story short, Chase does not consider a doctoral
stipend as income when evaluating loan applications. I don’t know what the
policy is with other banks, but my guess is that this is pretty typical (or at
least not out of the ordinary). This is something that people going into or
already in a stipend-granting program should be aware of ahead of time. To my
mind it’s a stupid policy, although I’m open to hearing the sense in it from
others. Sensible or not, it’s at least another financial hurdle for students
who are already often struggling with things like expensive family plans for
university student health insurance (family plans for staff are more reasonable, in my experience) or how to find affordable childcare so that a
second income becomes a possibility.
In our case the problem is now moot because the credit union
associated with the University has no issue with university stipends – this may
be a possibility in other financial institutions that have relationships with a
school and so understand academic peculiarities a little better. For situations where stipend legitimacy
is still an issue, though, we found that there are possible workarounds to
consider.
Apparently, Chase had an issue with the fact that I earned
“income” for being a student. It would have been different if I were teaching,
however, because that is legitimate “labor” in their eyes (or something). Upon
hearing this, I asked the representative how they handle something like a
graduate assistantship, where the income is not only for your work as a
student, but also for your work as a TA, instructor, proctor, etc. He said that
this would probably be fine. Afterward I asked my brother about this because he
has an assistantship at a doctoral program, and he confirmed that this counted
as income when he and his wife were buying their house.
At the University of Chicago Divinity School, a program has
been in place for a few years where every doctoral student gets a standard
stipend (as I said above, currently $21,000... the school year before it was
$20,000). They don’t call it an “assistantship,” but at some point during our
program we are required to fulfill a certain amount of “teaching points”, which
includes options like TAing, working at the undergraduate writing center, or
instructing. I have not worked toward any of these teaching points yet, but
because the stipend as a whole is contingent upon fulfilling these requirements
at some point during my program, the Chase representative thought that it
probably would be adequate basis for considering even my current stipend income
as real “income”. Again, we haven’t needed to pursue proper documentation for
this from the university because the credit union already accepts stipends in
any form, but it sounds like the option is there for us or for others who go to
schools with a similar financial aid set-up.
This may not be relevant information for many of you- I was
speaking with our Assistant Dean of Students about it, and she said she could
only recall one other instance during her time here when an issue like this
came up (it involved a loan for a house, and I assume it was long before the
Divinity School had their current assistantship-like program in place). But as
you apply to graduate programs or even now that you’re in one, it may be worth
quizzing the school about how exactly their financial package works. Sometimes a
program will offer highly-valued assistantships to some admitted students and
smaller grants to others. The
difference between these two options may not simply be the prestige of the
award or the opportunity for you to teach... one of them may count as “income”
to a bank while another doesn’t. Outside grants or dissertation fellowships may
function differently as well.
I am no expert on financial matters, which may have been why
it was a surprise to discover that stipend income didn’t count as income in the
first place (where it’s a personal benefit to count, at least... of course no
one has a problem with considering it income when taxes are being determined).
But if I wasn’t aware of this, I’m sure there are a few other finance-ignorant
humanities folks out there who could likewise use this sort of heads-up.
