<p>OP also stated that she could not have MADE $81K for D’s 4 years of HS tuition in her small town (say $26K/year before taxes, etc.?), so I assume those of you who think she should just get a great paying job to cover this $51K think she should move somewhere else?</p>
<p>I dont’ think anyone thinks that she can earn enough each year to pay for her D’s college. I think what people are thinking is that if she spends some of her money (and D borrows some), then she might be able to earn some of that spending back with a job over the next 10 years or so.</p>
<p>No one’s saying she must work…but you make choices in life, and some choices will rule out the possibility of super-expensive undergrad AND safeguarding assets for future generations.</p>
<p>I think people get annoyed because a lot of us work very hard, and either pay full-cost, go into debt, or find other, more affordable options. We ALL want a great education for our kids, we all want to save our assets for retirement/future. Most of us have discovered the only way to even begin to make this work is to …work.</p>
<p>She began investigating this a while ago (on CC) and was given the same advice she’s getting now about how her assets were likely to be an issue at Profile schools. </p>
<p>It is very complicated, and I do feel badly for her if she didn’t understand the advice; I wish she’s have gotten better guidance in real life. She would not be in this situation if she had.</p>
<p>Her D would have applied to true financial safeties. </p>
<p>I do agree that a job at this point is not going to solve the going-to-GT problem.
I wish her luck!</p>
<p>I was thinking about something in her situation that doesn’t click with me. She says she lives in a small town in Iowa where she could not have gotten a job which would have paid the D’s HS tuition. That suggests to me that the town is rather poor without a lot of good job opportunities (it’s because of the “small town factor” that she couldn’t make that much $)</p>
<p>But the town apparently also has a private HS which costs $21K, which is a LOT for anywhere. A school like that requires a base of upper class people who can afford to send their kids there from which is drawn a smaller group willing to PAY for sending their kids there. That would suggest this small town is not some rural dive. She also has $100K equity and a $100K mortgage on her house, meaning that it has a value of $200K, which would be pretty high in a really poor area. </p>
<p>Now it may be that she doesn’t have the marketable skills to make that much, and the school was just generous in relieving her of the tuition in exchange for the work she did there, but that doesn’t jive with blaming it on the small town factor.</p>
<p>what I would do in that situation is move- & find a school that would make allowance for the year that I would be in financial transition w buying/selling.
I wouldn’t move toward where my D was attending college necessarily, but I would move to where I could possibly retire- with good public transportation, available jobs in my field & otherwise a decent but affordable standard of living.</p>
<p>“there is no way that the college financial aid office would have known about the work-for-tuition arrangement from the FAFSA or the standard CSS Profile questions. So unless the OP volunteered that information somewhere along the line, that is unlikely to be the basis for the financial aid calculation that was so upsetting when it arrived last week.”</p>
<p>Actually, she did bring it up and, from her post, it seems they have told her that they did consider it. This is from her 3rd post: </p>
<p>“About the $81K I saved by working at my daughters private school: I had brought this up to the university to show that while I couldnt find a nose-to-the-grindstone job in my small town, I calculated that I could make up that income by trading my labor for education, specifically at the invitation of the principal. This meant that I paid for private education what I would have paid for public school: very little. I thought that would be seen as a very great judgment on my part but when I talked to the school yesterday this was the point they first raised; so I may need to make it clear that I didnt earn this income or pay taxes on it. I simply traded my work for education. This would be called sweat equity if I were building a house.”</p>
<p>It seems to me that if they were able to bring up the barter as their first point, they were talking to her with her papers in front of them and she may have basically had the meeting we are all urging her to have-- she just may not have known what questions to ask.</p>
<p>My head is about to explode having just read most of this thread. I don’t know what the school calculated, only they do. </p>
<p>From an accounting standpoint the one glaring thing that I see is this bizarre $81,000 barter arrangement with the high school. What bothers me is not that she has apparently chosen to convince herself that this arrangement isn’t taxable or that she truly believes it isn’t because she doesn’t know any better, what I can’t get is the prep school. Obviously they file taxes don’t they ? Did their accountant somehow miss the lack of $81000 in tuition over 4 years for a student in attendance ? Did the principal of the school rig the books ? I can’t imagine a CPA or CPA firm not sending out a 1099 B. Which is the 1099 form required by the IRS for all barter exchanges. I was a member of a barter exchange for several years, the IRS takes barter seriously.</p>
<p>To top it all off, it seems she called the financial aid office at the school and then told them about this barter exchange for her daughters schooling. If I was on the other end of the phone the first thing that would have popped into my head would be that both her FAFSA and Profile forms were incorrect. Face it what she basically did was tell the FA person that has no “real” job but that her hobby is selling her own home-made quilts on the internet and she just has PayPal deposit her money towards her mortgage balance, to the tune of $81000 over 4 years. It’s not as if I’m getting money for my work.</p>
<p>Probably the worst that could happen would be the IRS getting wind of some of this stuff.</p>
<p>Anyway, I wish her and her daughter all the luck in the world.</p>
<p>Sagiter, I think schools are allowed to provide tax-free educational benefits (below grad school level) for kids of employees. So I dont see a problem with the IRS. Is this section unfair to the rest of us, sure.</p>
<p>Sagiter, Yes, unless the school recorded it as financial aid (which doesn’t jive with the way she described it). </p>
<p>My concern is that since she brought it up to the school before she had the offer in hand (after all, they were able to bring it up as the first point which means they had that information ahead of time), she either communicated it during a phone call (the $9,000 phone call) or she wrote them a letter. If, in fact, she let other schools know, there is a good chance they also took it into account.</p>
<p>2college – As I read Section 117(d) of the Internal Revenue Code, I think it is not that tough for this to qualify as a non-taxable fringe benefit, that of providing a tuition in leui of salary. </p>
<p>I suspect that there were just too many redflags on this application, including a lot of investment income, attendance at an expensive HS.</p>
<p>It seems to me that it could only be considered a non-taxable fringe is if she is an employee of the school. If that were the case then she would be paid for her services.</p>
<p>Unfortunately this appears on the face as a straight up IRS recognized barter arrangement. The specific deal she struck was tuition for work. If it looks like a rose and smells like a rose…</p>
<p>I agree that not only were there many red flags, every one of them seems almost bizarre in nature.</p>
<p>Sagiter. There is no requirement I see that entire salary can not be eliminated per tuition reduction. This is not a straight up barter. So this is the deal. Woman goes to school – offers plan. School accepts, sends out paperwork, you will be employed at 20K, as an employee at will. Also attached is tuition reduction election form. Please fill it out before you start.</p>
<p>Sagiter, please read Section 117(d) of the Internal Revenue Code, of 1986 as amended. This is an exclusion from income. It may irk you that teachers and professors get this deal but it is NOT the same as a barter. If you tried to report someone to the IRS for this, you would be laughed at.</p>
<p>I have been following this thread. No where did I see that she live in a small town in Iowa. Someone raised the question if this was Fairfield (either town or county) CT. There it is entirely feasible that private school tuition costs over $20,000 AND that she would have “wealthy gentlemen friends” able to generate the “interest income” she has been living on. </p>
<p>I have been biting my tongue because point of fact there are many issues in this story that are “odd” to say the least.</p>
<p>Is this never-ending debate about the tuition “rebate” really necessary. Although the “facts” were introduced by the OP herself, there is truly no need to speculate endlessly about the IRS views on barter income. Inasmuch as the OP perceived this is a “barter” for services, there are plenty of other possibilities. For instance, the OP’s daughter might have received financial aid from the school she attends, or perhaps the late husband was a member of that school in some capacity in the past. Would it be hard to understand that the OP had NO obligation to volunteer at the school, might not have any schedule or functions that elevates her to the status of an employee, staff, or faculty? </p>
<p>Please consider that at many expensive private schools there are often plenty of parents on campus who come to “help out.” At one very famous school in Dallas, parents flock to the cafeteria every day and serve all meals, leaving the school with a skeleton crew. The parents range from incredibly large donors to scholarship recipients. Nobody would think that the scholarship recipients need to obtain a 1099 for bartered services. The list of functions filled by parents is endless … chaperoning activities and trips, coaching teams, organizing fundraisers, name it! </p>
<p>All in all, the OP might think she “bartered” her services for tuition, but the school might see it differently. But it really should not matter to any of us!</p>
<p>No way any of us can pinpoint where the hits on need were made. Only GT can do that, and hopefully, the OP has discussed the matter with them. She did say, however, in one of posts that the arrangement was a sticky point with GT. How GT knew about it if it doesn’t show up as a taxable item is a puzzle. Perhaps an example of giving a school too much information, which is one thing the OP posts did provide. Too many distracting details from the main purpose of her post. </p>
<p>Long after the advice to the OP has run dry (and rancid, in some cases), the comments and perceptions of other posters was interesting.</p>
<p>There are no reason to doubts that the OP resides in a small town in Iowa. Just as there are more towns called Rome than in Italy, there are towns called Fairfield outside CT. Thinking that there is an expensive private school in a small town in Iowa is not speculativel it is a FACT.</p>
<p>I became curious about the private high school, and googled …</p>
<p>Note from moderator.
Please refrain to post links to sites that directly identify the persons discussed in this thread. Our community should attempt to respect the privacy of its members, even when most of the information was volunteered by the member herself. </p>
<p>Hopefully she hasn’t wasted time posting here, but has reached out to GT instead to get clarification. And, like most have said, if the finances don’t work out, I do hope they have financial safeties arranged.</p>
<p>My D is an athlete who for a short time considered this school.</p>
<p>Through close mutual friends, I met the coach for her sport in a social setting.
By this time, my D wanted to go elsewhere, so it was off her list of possibilities.</p>
<p>The coach told me that she had one full scholarship to spread around for the whole
team roster, which for this sport is around twenty athletes. NCAA rules permit
up to 12 full scholarships for this sport, split up anyway they want. </p>
<p>That evening I heard more than one story about how difficult it was for this coach to handle the meetings with parents when FA reality hit. </p>
<p>She dealt with it by selling the school brand and it’s worth for the rest of the child’s
life. </p>
<p>I came away from that discussion with the impression that this school may engage in
a institutionalized bait-and-switch approach to attracting students. </p>
<p>I’m adding my two cents here to what seems to be amazingly knowledgeable supportive advice from others about how FA works.</p>
<p>Good luck with the process, I’m sure your D will end up at a great school.</p>