[bklyn11201]

An employee does not gain taxable income by driving to a client site and being reimbursed $0.535 per mile by the company as they have used fuel and have caused wear on their vehicle. But if the company decided to purchase an employee a new personal car at the end of the year as a bonus, that would be taxable compensation.

The university has decided to declare a tuition of $50k per year. So charging one student $50k and then providing the rest of the students with a reimbursement, is seen as a gift similar to your employer gifting you a car. The university could choose to set tuition at $5k per year instead and with a little bit more grad student pay and the tuition tax deductions, it should all be even.