Our neighbors who are passionate on the topic of climate change are packing up their pavement-melting SUVs to drive their “strong and independent” children to college (where mom and/or dad will unload, unpack, plug in the toaster oven, etc.), then return home to work like slaves to pay for what formerly would have been learned in high school. Let’s assume that 18-22-year-olds who’ve had $500,000 of K-12 education (at taxpayer expense) are not capable of getting themselves to college, so the parents must do the drive. Is it obvious that the parents also have to pay?
A software engineer with middle-school-age children told me that he spends every dime that he earns, immediately selling stock when it is issued to him, for example. “The way that college financial aid is structured, it doesn’t make sense to save unless you’re earning more than hundreds of thousands of dollars per year. Your kids’ colleges will take any savings.”
“Can Married Students Get More Financial Aid Money?” (the nest) says
If you were considered a dependent student — your parents’ financial information was required on the financial aid application — before you tied the knot, that has changed. Married students become financially independent overnight as far as federal student aid is concerned.
as a married student, a higher amount of your assets are protected than with a non-married student. Your EFC will be based on your combined income, assets and student status.
Consider two 18-year-olds. They are starting college next month. Both come from families with $250,000-per-year in combined parental income and are therefore ineligible for a discount off the absurd “rack rates” that colleges post: they don’t have any “need” so they aren’t entitled to “need-based financial aid.” Why don’t they fly to Las Vegas this weekend, get married, tell their colleges that their situation has changed and now they want their financial aid recalculated? At Harvard, they would now be a “family earning less than $65,000” and therefore would get entirely free tuition, fees, room, and board (source).
How challenging would it be to find a mate? There does not seem to be any requirement that they attend the same college or live together. There is no requirement that they be of opposite sexes. So a male college student could marry another male and thus be assured of no liability for child support in the event that his spouse became pregnant at a fraternity event (in at least Massachusetts, children conceived during a marriage generate a 23-year child support entitlement for a plaintiff parent even if the defendant parent was not involved sexually or biologically). After college, or if one of them starts earning big $$, the happy couple takes advantage of the no-fault divorce laws (maybe spend a semester abroad in a European country where it can be done administratively without going to court; or go back to Vegas for a $199 divorce).
There are a lot of families liquidating their savings to pay for college, so I’m thinking that the above plan might not work, but I can’t figure out the flaw. (Of course, for some Americans the idea of marriage has a religious component and they wouldn’t be interested in this procedure for saving $200,000+)
[In this country with the world’s highest proportion of children who don’t live with two parents and therefore with the highest percentage of adults who are entitled by a court order to get child support cash from another adult, one complicating factor in the above plan is that a child’s marriage may result in the loss of the child support cashflow as the marriage makes the child “emancipated.” This can be an important factor in states where children can generate revenue beyond age 18.]
Readers: In our era of colleges shaking parents upside-down for cash while simultaneously offering a free ride to those with the correct paperwork profile, why don’t we see more marriages to form new zero-income “families” for financial aid calculation?
>When colleges shake parents upside-down for cash, why don’t we see more marriages to form new zero-income “families” for financial aid calculation?
But why do you assume it’s not happening?
If this becomes a widespread strategy, I assume colleges will start to deploy the same marriage-of-convenience detection processes that immigration authorities use today.
Suzanne: I’m puzzled by how many students in the US go away to college, especially considering the financial incentives to stay in-state! In Canada it’s not nearly as common.
> A software engineer with middle-school-age children told me that he spends every dime that he earns, immediately selling stock when it is issued to him, for example. “The way that college financial aid is structured, it doesn’t make sense to save unless you’re earning more than hundreds of thousands of dollars per year. Your kids’ colleges will take any savings.”
Is this surprising? It seems normal for someone with interest-bearing debt to spend as much money as possible paying down the debt.
I do not get something in this character’s strategy.
If family income is $250,000 + /year he is going to be hit by colleges to the maximum anyway, assuming his children do not win scholarships. Why does he spend his current income without lowering it? Putting maximum into 401K for example would lower income somewhat. He could take an easier job I presume.
I have a friend who discovered she could get in state tuition for law school the day before her fiancé shipped out. They went to get married and were told they had to wait like two days. They mentioned he was military and shipping out. The judge(? Whoever does these things there) said there was an exception and they were married right there and she got in state tuition. They did apparently have to hide this from her Mother who had definite religious views on marriage…
Would say you’re now better off working after high school, getting the highest position possible with free online materials & getting a company, the military, or aunt Yellen to pay for a professional school, only if that’s what your career requires. College for the rest of us is just an education in how to vote democrat. Better yet, just hope the domestic partner leaves you & finds someone else so the kids aren’t your problem.
If kids were smart enough to do this they wouldn’t need to go to college.
You go to college to learn how institutions use societal norms and loans to rip off myopic naifs. Then you get married to learn how the state has insinuated itself into the family unit for the purposes of tearing the hearts out of fathers and completely abusing breadwinners of either sex. These are valuable educational experiences.
@Russil a significant percentage of kids do attend “in state” college (to include both the major university, and often a number of other state-run institutions). But that still means a lot of American kids are attending private college or paying out-of-state tuition at another state’s school (more common at more prestigious institutions like Michigan, Penn State, UVA, etc.). By the time kids are in graduate school, they are at least 21 years old, and so medical/law/business/grad schools generally allow them to establish residency, and often have minimal difference between “in state” and “out of state” tuition (mainly cuz they can’t bleed the parents dry with the FAFSA forms and rules).
Someone earning $250k per year should hopefully be financially savvy enough to have started saving a 529 plan early and have taken advantage of the five year forward lump sum contribution. Assuming a 7% return, $70k contributed at birth should be worth $236k by age 18, which is sufficient to cover college expenses at most schools,
> When colleges shake parents upside-down for cash, why don’t we see more marriages to form new zero-income “families” for financial aid calculation?
Because people don’t realize this is how financial aid is calculated.
Of course, if Junior/Missy was smart enough to get a scholarship, this would be moot anyway.
Another strategy if you have divorced parents and one parent is low income, is to get guardianship assigned to your grandmother/grandfather and omit the higher income parent from the FAFSA forms.
@Grandparents I’ve read this might work with some schools, but with the Ivies, which have a supplemental financial aid form (in addition to the FAFSA), they won’t let you pull this sort of stunt. However, WSJ had article a few months ago describing that grandparents are able to take out federal student loans for grandchildren for college (but not for grad school assuming the grandkids are age 21+), and that the rate of repayment is quite low if the grandparents pass away without any major assets. (Article was mostly talking about huge taxpayer bill for federal student loans in default, but focused on this grandparent loophole.) And that this scheme is making the rounds of retirement homes, where aforementioned grandparents are often spending their every dime — a Maryland CCRC charges over $6000 per month per couple for one meal/day and a few other services — and therefore have spent their assets before their demise.
Wouldn’t it be easier to just liquidate all your assets and put the cash under the mattress for four years? If loss of interest income is considerable in relation to tuition savings, then you’re rich enough to pay for school anyway.
My younger brother got into the #1 liberal arts college and I went to a “top-5” liberal arts college, both in New England. Tuition and room+board cost $40k/year and $35k/year respectively about 20 years ago. I just checked and the price now for both is around $65k/year. That is just insane (and it was btw, insane back then already when one thinks about it). Scholarship helped knock down some of the costs for us, but it’s still a significant chunk of money. My father made good money as a doctor so we were fortunate in that respect.
Is the quality of education better? I don’t know – with so many schools it’s hard to say. State schools to me seem to be very impersonal, short of resources and the faculty overwhelmed and the intellectual atmosphere of the student body I found a bit wanting. In my liberal arts college I at least felt surrounded by more people of some intellect/curiosity and general desire to be there. The professors were engaging – doing science meant better mentorship and interestingly more access to the equipment. I was shocked to find out that in the state school and bigger private universities people studying organic chemistry learned NMR Spectroscopy only from the text book and never got a chance to operate the equipment themselves.
In my case, my kids will probably end up studying in Europe/Germany, which from what I’ve seen, looks much like the experience found at American state schools. While the tuition is nearly free, parents must help to pay for room+board (eg. renting a flat and food expenses). So you are still talking about $6000-$9000 a year depending on the location.
GermanL:
My experience is opposite of yours. A very good student who went to one of top private/public state-level college department that is consistently in top 10 – 15 departments in world ranking in its field ended up doing paid research starting sophomore year after volunteering for 1 year and through graduation including 2 summers of paid research in top word departments. I attended graduation ceremony, although my student was summa cum laude (top 5%, top in his perspective concentration), top 10% – 15% students performed similarly and all got offers from top companies, start-ups and graduate programs. Only about 10% students were not hired by graduation and they admitted to be bums patronizing local beer establishments in their speeches Another top student, even with better achievements, went to one of top liberal arts colleges and although he did paid research one year is in way more uncertainty and received way less support. Both colleges are tough graders by modern standards and both students have great grades, with liberal college student having better grades.