That's not really accurate for PhD students. I'm in Physics, the same stuff will be basically true for PhD programs in natural sciences (chem, bio, etc), math, and most of the social sciences, and for PhDs but not masters degrees in engineering. There's also some funding for PhDs in literature, philosophy, etc, but those are less universal. Basically, no one pays for a PhD in the (natural) sciences.
This is really long. Sorry. All of this should be considered typical and not exhaustive of every detail.
There's a couple of things. One is tuition cost. This number is around 40k USD/yr for graduate students. There'd be no way I'd attend if I had to go into that kind of debt, and most other's wouldn't, either. But that's before salary/stipend, which is about 30k before taxes. I don't pay tax on the tuition, but grad students really shouldn't since it's a made-up number that the university pays itself by taking money from one pocket and sticking it into the other. If we got taxed on that, tuition would go up, stipends would go up, and it would basically be a zero-sum game that just causes a bunch of headache for the student.
Quick rant about the cost of undergraduate tuition (which I conjecture helps set the rate of the fictitious graduate tuition):
Historically. College was *much* more affordable. People could work part time and pay for school back in the day. But now college is sold as an experience. It is not an education, but a cocoon of transformation and growth that only it could possibly provide. As such, there's a competition from universities to bring in money and build amenities to attract students, etc. Point of reference for my perspective - **** bottom of the middle class and lived at home to commute to the local state college for four years of a pretty decent education. During that time, I knew people from the next town over or even 15 minutes from the school who lived in the dorms for the experience. $11k/yr just to live 20 minutes from home. My cost to commute and all was probably around $3k/yr. Being from the shallow end of the middle class, I couldn't justify such a cost. They had parents who were happy to pay, good for them. Okay. So now we have a runaway problem of spending to attract students to have money to spend for amenities. All the while professors make a little more after inflation, but the amount of administration explodes in order to keep up with all of the amenities that they need to maintain to have the best experience (again, not edumacation but experience).
Okay. So. Graduate tuition rates are made up. No big deal. We need researchers to do cool stuff. Camera in cell phones? Invented by physicists. World Wide Web? Invented by physicists to share data. Etc. etc. Even the "this will never be useful" work is often useful or has side benefits of creating transformative technologies. We need to compress images to send pictures from outer-****ing-space... Thanks for the JPEG, astronomers. There are many examples like this such as black holes are really the "simplest" case of a strongly correlated system, which will almost surely transform technology once we (other physicists) figure out wtf is going on. I'm just in physics, but there's similar examples in all those less interesting fields, too.
Alright.. There's a compelling economic reason to fund research and keep those findings public. Due to the years of labor required to do that, there are compelling reasons to pay graduate students for those efforts. People do work, they get paid. We're capitalists, sure. How do they get that payment?
There are research assistanceships, in which we get paid just for doing research (in which the prof. asks the money management people to move money to the graduate school's people). The idea is if doing research full time, we get more accomplished. These funds are typically from external grants via the professor/advisor, but can also be for fellowships directed for the student.
The other method of payment is a teaching assistanceship (which includes the dept. moving money from it's pocket to the graduate school's pocket). At Purdue, this is a 20 hour/wk position (typically). We are expected to put in approximately 20 hours of total effort on average per week. In reality, it's often less than that. I taught physics for engineering students and came in under that. When I taught the physics for bio/chem people, I put in at least 20 hrs/wk if not more, but I was a particularly dedicated TA and pushed the students hard (10% loved it, 30% hated me, the middle was the middle).
As to the amount: It's not a lot of money. And truthfully, I'd be content with a raise, but it is enough to survive off of, and I'm not content lying about that in order to get a raise. We perform skilled labor (of varying quality) while effective apprentices. If we looked at an apprenticeship of say a plumber, the apprentice probably makes more. So maybe we are due for a raise on the merits. But the plumber apprentice doesn't get a PhD and start making 6-figures in industry, so maybe we need to go back to the accounting.
I did have a side gig throughout most of my PhD (until I started a secondary project). It did make a substantial difference in terms of being about to eat at restaurants, but I was so busy it ate into the extra income. I was definitely more satisfied with homemade food from my earlier days. Also, I had to dip into savings from those side gigs when I stopped having extra income but maintained spending not realizing the degree to which my net income was affected (those people in the CZ thread are terrible influences). Lesson in money management learned.
Foreign students are literally not allow to have a job outside of the university without breaking federal law - it's a condition of their student visas. Many of them live very frugally and even send money back home to help family. I think the Americans need to learn to make coffee at home (or at the office, for $0.50 I can get a pump-machine espresso. Pretty sweet deal), and learn how to manage off of a meager wage. It's enough to live off of, and will build a little character. Maybe it will even help them be more charitable when they earn better.
We in fact are professional students. And further, that's not a bad thing. PhDs are not like bachelors (or even most masters) degrees. A bachelors degree is a survey of a field. You learn a little or this, a little of that. PhDs are a training in independent research and are awarded when the student has brought forth something new that the world didn't know. Our years of schooling is really just a bump in human knowledge:
My collaborator tells his students that he expects 60 hr workweeks from them (I don't hit that mark, but I'm probably in the 50 hr/wk ballpark of actual work). The amount of work needed to succeed in graduate school in a 5-6 year timeline requires a lot of dedication and time. So, we have a 20 hr payment officially, but are expected to be obsessed with the work. There's more that could be said, but this post is already far too long.
There are issues with inflation, and I don't know details about IU, but Purdue does adjust yearly based on cost of living (we're barely above the poverty line). Also remember that most people who've made it through four-years of bachelors and are continuing on are raging leftists or have gotten beaten-down by the leftists - including me, though apparently I have a reputation for being the conservative grad student in the program (I do view myself as a conservative, but I've had at least one relative call me the D-word). Sadly, open debate isn't encouraged except to have people "fall in line." Reasonable people can disagree, but it upsets me slightly how no one's BS meter ever goes haywire hearing some of the claims, and when pressed, they accuse you some sort of -ism. Some of the things I've heard from other grad students are straight-up (cultural or fiscal) Marxist nonsense and riddled with inconsistencies (in short, I don't trust methods that involve other people putting in the money/time when the person making the argument is the one to gain even if only by their own self-adulation).
I do have ideas on how to reduce college costs, and there's too many young people in college, but that's a different discussion and I've got work to do.
All this education and my first attempt at cocoon was cacoon. Embarrassing.
Don't really have anything to say. Just thought this needed quoting...