Leilani Burke/Sun Staff Photographer

Many international students have reported receiving unexpected, significant tax withholdings on their financial aid awards, leading to stress and unforeseen financial burdens.

October 3, 2022

International Students Receiving Financial Aid Encounter Unexpected, Stressful Tax Withholding

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Among the myriad of challenges faced by international students at Cornell is the unnotified imposition of a 14 percent tax withholding on students’ financial aid refund. 

To Ezgi Yılmaz ’24, this amount, which was not withheld from her first and sophomore years’ refunds, came as a “shock.” 

“Like every fall, I was expecting a certain financial aid refund, but the amount that I got paid in August 2022 was around $3,000 less than that,” Yılmaz said. “I was shocked about it. I went to my Cashnet and saw that there was a foreign students 14 percent tax withholding.”

Typically, for those who receive financial aid, once tuition and mandatory fees are billed in Cashnet — the University’s platform for payments and billing history — the remaining amount from the award is disbursed in full to the student. However, in the case of international students, the International Revenue Service classifies this refund as “taxable income,” and, according to the financial aid website, requires Cornell to withhold 14 percent in taxes if the student is not eligible for exemption from taxes under a tax treaty.

Ghali Jorio ’23, an international student from Morocco, is exempt from this tax by virtue of the US-Morocco tax treaty. However, the University never informed him of his exemption, and he was charged the 14 percent withholding during his first year. 

“I didn’t know anything about it. At that point, I had to do some research and email the Cornell Tax office that where I’m from has a tax treaty with the U.S.,” Jorio said. 

After he submitted the required paperwork, the tax office removed Jorio’s withholding. However, he was charged again this semester and is in the process of having it removed. 

Lili Mkrtchyan ’25, an opinion columnist for The Sun, faces a similarly confusing situation. Like Jorio, she discovered the withholding on her account during her first year; however, she could not be refunded the deduction because Armenia, her home country, does not have a tax treaty with the U.S. 

 “I don’t know what’s going to happen this year. There is no information about the tax, though I have received financial aid,” Mkrtchyan said.  

Students have expressed concern about Cornell’s lack of notice regarding the withholding. Although the policies page of the financial aid website lists this information, it is not included in their financial aid notification nor is it available on Student Center. Furthermore, there is confusion surrounding when a student becomes eligible for this withholding, and why students like Jorio, who are exempt from it through a tax treaty, are charged regardless. 

In an email to The Sun, the tax office wrote that informing all students of their tax withholding requirements is a high priority. The office stated it partners with departments across campus to provide as much information as possible and help students meet their obligations. 

The office noted that students are asked to provide information about their specific circumstances through a form called the Foreign National Questionnaire to evaluate individual benefits and obligations for tax reporting purposes. 

“It didn’t make sense to me – the money [deducted] is significant, and if you have considered that person for a full scholarship, how do you expect them to pay taxes?” Mkrtchyan said. 

Students like Yılmaz have been put in a strenuous position, having to work close to the student limit of 20 hours a week to compensate for the unexpected deduction. Yılmaz also noted that Turkey, her home country, is experiencing an economic crisis and the devaluation of the Turkish Lira against the US dollar has exacerbated her burden. 

“It’s putting me in a difficult situation, and I’m taking a lot of classes as well,” Yılmaz said. “The financial aid office said ‘it’s not our fault, what you can do is take loans or apply for scholarships.’ But I cannot get a loan; I worked so hard to get to this place and who knows what’s going to happen in the future.” 

Mkrtchyan reported receiving more support from the University, which offered her emergency aid. 

“I think if I knew this beforehand, I wouldn’t have to stress about getting less money and bothering to hold office meetings – having two meetings is a lot of time and effort,” Mkrtchyan said.

While the Tax Office did respond to her queries within a week, Yılmaz felt that the Financial Aid office was “apathetic” during their call. 

“Maybe there is a lack of empathy here? On how $2,000 to $3000 can impact students from countries with depreciated currencies. It isn’t a small amount. There should have been more thought in it,” Yılmaz said. “One U.S. dollar is 17 Turkish lira. I have a right to know this so much earlier.” 

According to Yılmaz, simply stating it on the website is not acceptable without mentioning it on the financial aid award that students receive. Jorio and Mkrtchyan agree with her in that the financial aid and tax offices should take responsibility to reach out to international students first, and not the other way around. 

“Since they are investing in us, they should know that we are struggling. Our mental health and success is impacted,” Yılmaz said. 

Yılmaz noted that financial security is imperative to the diversity that institutions care about, citing Princeton’s recent program that makes college free of cost for students with families receiving below $100,000 in annual income. Yılmaz said that she would like to see similar support offered to students at Cornell in the form of a resource center. 

Regardless of how University offices responded to their concerns, the students agreed that the damaging impacts felt by the deductions could be avoided by ensuring they are well informed in advance about such significant charges. 

“I think it’s a pretty clear problem with a pretty clear solution,” Jorio said, “Better communication from the tax office and being proactive about not charging students from certain countries since day one.”

Correction, Oct. 16, 3:05 p.m.: The initial version of this article misstated that the University tax office did not respond to requests for comment. Their statement has been included.