Is Financial Aid fair?

Paying for College
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<p>Taxguy, the current unemployment rate is roughly 5% for people with B.A. degrees, 10% for the population at large, and 15% for people who lack a high school diploma. 5% unemployment is pretty close to full employment – that is, it doesn’t get much better than that.</p>

<p>So on an individual basis, the US government can’t know whether a particular student will get a better job with a college degree, but on a collective basis they know that it is an investment that is a pretty effective way to turn unemployed citizens into employed citizens. So long term its a pretty good investment.</p>

<p>And subsidizing education is one of the best investments the country can possibly make into its future – it ensures an educated workforce and productive citizenry. Our country cannot afford NOT to subsidize college educations.</p>

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<p>This is just a thought, but if everyone were to have access to college educations and obtain college degrees, who would take on the low-income, low-skill jobs in our society? As burdensome and unappealing as those jobs are, someone must do them and our society would collapse without them.</p>

<p>This would just further dilute the job market for people who have college degrees, and increase the unemployment in that category. There would be no net change in unemployment then, just more people with degrees who are unemployed when compared to before.</p>

<p>In addition, many of these college graduates would now have to take on those lower-income jobs, for they would be the only jobs available. An increase in the number of college graduates would not increase the demand for those skilled jobs. The job market is tied directly with economic growth, not the labor pool. Just take a look at Europe, where many college graduates have no use for their degree upon graduation, due to years of stagnation.</p>

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<p>There’s little growth in low-income, low-skill jobs–and many of these jobs are decreased or eliminated by growing technology. I mean, there’s no massive shortage of yardworkers or McDonald’s employees. In fact, there was a report on the BBC on how there are many sectors with open jobs, but which leave them unfilled because they just can’t find qualified applicants. Maybe we need to be looking at employers subsidizing the education (which is effectively job-training) of their employees on a larger scale.</p>

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<p>Maybe people who earn enough to pay for their kids to go to school … and the kids of these people … could decide that parting with some of their money for this purpose would be a wise investment. Maybe people could see that CC’s and state colleges provide a good education.</p>

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<p>Well financial aid doesn’t take into account the cost of living in any single location.
I believe that’s one thing that’s definitely unfair about it.</p>

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<p>I think it’s unfair in some ways, but there are no ways to fix the inequities I am thinking of without making it even more unfair. For example, my parents don’t believe college is necessary so saving was not even on their priority list even though our income is too high to qualify for financial aid, so my choices are huge debt or not going to college until I am 24. I think that’s unfair to me, unfortunately, but it’s fair to my family. That was my parents choice to make for me whether that’s fair or not. I can’t think of a single way to fix that issue that wouldn’t disadvantage parents who were actually responsible and did save. So even though I get the shaft I think it’s as fair as it can be, at least in that regard. </p>

<p>I do wish it took more factors into account, however. I think my family is at a disadvantage because my dad is a self-employed small-businessman. We could make 50k this year and 100k next year, so last years earnings are not indicative at all necessarily of our ability to pay for college this year-- not sure how that could be remedied, but it is a problem for us. Not to mention that our income, though substantial last year, is based on sales of a computer program my dad made that he sells himself out of our house-- so it’s not like he gets a steady paycheck.</p>

<p>More importantly, because he is self-employed we have to buy private insurance, and because we have pre-existing conditions the costs are astronomical. We currently pay $1000+ a month for catastrophic coverage, one doctor appointment per person a year, and limited prescription coverage-- I am disabled and chronically ill and I have to pay for ALL of my expenses out of pocket, in the last three months I have paid for bloodwork, colonoscopy, ultrasound, and an asthma treatment all entirely out of pocket. Last year my mom had to have a non-elective hysterectomy and we lost her income and had to pay for her surgery out of pocket. My 15 year old sister attempted suicide and was hospitalized for a week and none of that was covered. None of these bills are taken into account. We can send a letter of special circumstances to the school, but the most that has come of it was this year I got a $1000 grant for economic hardship, three years after my sister’s hospitalization and two years after my mom’s surgery. So the years those major bills actually came in, the economic hardship appeals were not granted. I wish our medical bills could be taken into account when calculating our need. One could say that my dad should have kept his grown up job rather than transitioning into self-employment and losing his employer provided insurance, and I wholeheartedly agree with that, but we made less money then and he was less able to pay our bills then even with the employer provided insurance benefits, so I am not sure how much difference that makes in the end.</p>

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<p>I think the unfairness of that is debatable. Most of the world does not choose to live places they cannot afford to live in while still meeting their expenses. I was offered my dream job and I had to turn it down because it didn’t pay enough for the price of living in that area. I don’t get to say “well my job is there so I have to live there,” I don’t get the job because I can’t afford to live there and still meet my expenses. I don’t think anyone has the privilege to live in a certain area and get a break because of the cost of living just because their job is there, the rest of us have to take finances into account when considering what locale to live in. You are responsible for the cost of college if you make enough money to pay for it, but you have to choose to make that your priority-- if living where you do is your priority over college affordability, that’s your choice, same as the choices my parents made. It is a privilege to live in an area with a high cost of living that you earn by being able to afford it-- REALLY afford it, not a right.</p>

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<p>@ Emaheevul07</p>

<p>I see what you’re saying, but I think it’s a bit different from what I’m thinking about. </p>

<p>You say: “You are responsible for the cost of college if you make enough money to pay for it, but you have to choose to make that your priority-- if living where you do is your priority over college affordability, that’s your choice, same as the choices my parents made. It is a privilege to live in an area with a high cost of living that you earn by being able to afford it-- REALLY afford it, not a right.”</p>

<p>Would you say there’s an exception to your logic in the case of a resident from a state with an exceptionally high cost of living, such as, i.e. Hawaii? Most people (as in families who have lived here for generations, etc.) here don’t choose to live here over going to college. It’s a bit hard for every single non-millionaire Hawaii resident to just pack up and move to another state. . .</p>

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<p>[Jonathan</a> Swift - A Modest Proposal](<a href=“http://art-bin.com/art/omodest.html]Jonathan”>Jonathan Swift - A Modest Proposal)</p>

<p>A Modest Proposal For Preventing The Children of Poor People in Ireland
From Being A burden to Their Parents or Country, and For Making Them Beneficial to The Public</p>

<p>By Jonathan Swift (1729)</p>

<p>Excerpts:</p>

<p>"I think it is agreed by all parties that this prodigious number of children … in the present deplorable state of the kingdom is a very great additional grievance; and, therefore, whoever could find out a fair, cheap, and easy method of making these children sound, useful members of the commonwealth, would deserve so well of the public as to have his statue set up for a preserver of the nation.</p>

<p>I shall now therefore humbly propose my own thoughts, which I hope will not be liable to the least objection.</p>

<p>… a young healthy child well nursed is at a year old a most delicious, nourishing, and wholesome food, whether stewed, roasted, baked, or boiled; and I make no doubt that it will equally serve in a fricassee."</p>

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<p>For example, my parents don’t believe college is necessary so saving was not even on their priority list even though our income is too high to qualify for financial aid, so my choices are huge debt or not going to college until I am 24.</p>

<p>Those aren’t your only choices.</p>

<p>Many kids have parents whose incomes are too high for aid, yet they can’t/won’t pay for college. They do have other choices without incurring large debt or waiting til they’re 24 (that age probably should drop to 22, by the way).</p>

<p>1) Start at a local CC, then transfer to a local state school.</p>

<p>2) If your stats are high enough, then get good scholarships to go elsewhere.</p>

<p>3) Start at a local CC, do very well, then transfer to the school that gives good transfer scholarships (there are some schools who do this.) </p>

<p>4) Start at a local CC, do well, transfer to your flagship where you probably will need good sized loans, but they will only be for 2 years. </p>

<p>Trying to do all 4 years at the school of your choice with big loans is a bad idea.</p>

<p>Are you saying that your parents won’t pay one cent towards college or that they won’t pay their EFC? Big difference. Some parents can’t pay their EFC, but they can pay some. Every few thousand helps.</p>

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<p>I haven’t read the entire thread but agree with calmom. One statistic that I find troubling is the alarmingly low graduation rate of Pell grant recipients. This doesn’t bode well for the theory that they will become high-earning, taxpayers…and remember that the majority of Pell recipients have family incomes under $20K per year, so it’s likely that they and their families are receiving other taxpayer-funded services. According to the Pell Institute, there is a correlation between graduation rates and the high numbers of Pell recipients doing exactly as Mom2CK advises…living at home, going to CC, working to pay expenses, etc…where it’s less likely that they fully integrate into college or take advantage of the resources that larger schools have to offer them:</p>

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<p>At the larger, more selective, public universities the graduation rates improve and they rise again for the group of Pell recipients who live on campus. I think this is a sign that the student is more invested in his/her education and is more likely a worthwhile investment for taxpayers. I am a fan of the TRIO programs like Student Support Services, which provide a personal contact and support to low income students through regular, mandatory meetings with advisors, cultural/academic support, enhanced skills training, etc. and I would like to see some of those things apply to the entire group of Pell recipients. Far too often, low-income students just don’t know who to see or ask about the services/support they need to succeed (and we all know that navigating college departments in search of the correct answer/person/program can be a frustrating experience for anyone). Worse, they may have no idea what to ask or even that there are resources in place to help them…so they never go looking for them in the first place and simply give up when they hit a major roadblock. It seems that the relatively low cost of checking up on the students who are receiving public funds can pay off in big ways.</p>

<p>I was also a supporter of the ACG/SMART grant programs, which required the student to maintain a certain gpa in order to qualify…although some of the other requirements made little sense. Unfortunately, the government is getting away from merit-based models. I think that giving a beginning probationary period, perhaps a year, and then giving enhanced grants to students who keep their cumulative gpa over a certain level, say 2.8 or 3.0, makes more sense. </p>

<p>In response to taxguy’s theory that we can’t afford grants, I can only say that my kid’s (large, public, research) U has determined that their economic impact on the city/region equates to $6 for every $1 in public funding that they receive. This does not include the number of companies who are started as a result of their research and licensing agreements. If the millions of Pell recipients were to suddenly drop out, think of the loss of income to the schools and how quickly that would trickle down to their employees, vendors, and local businesses. The Pell grant is just a small part of the funds that these students are putting into the local economies.</p>

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<p>Although in many cases the financial aid system does help rectify need-based situations, it has an unintended negative consequence of generating an additional layer of complication in already complicated system. The financial aid system complicates the college admissions process by rewarding those who understand the labyrinthine rules of the system. In essence, the financial aid systems turns the stressful situation of applying to college into a preview exercise of understanding the IRS tax code because there are so many particular sensitive details that a student and family have to reveal. It would sensible if the application process were more straightforward and remained focused on education. Fairness should ideally come with simplification, not complication.</p>

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<p>Ema did do this. She started at our local CC and then transfered to our state flagship (which is about $25k a year).</p>

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I’m not sure I agree with this. BIL2, BIL3, and SIL all live in areas with a relatively high cost of living (but a low property tax). They all made out like bandits on the housing boom - like their home value was doubling every month. We live in an area where home values are flat - a fact of which we were reminded weekly for umpteen years. So, yeah, their cost of living is high, but they are living the high life because of their housing investments, while we are muddling along at the same-old same old.</p>

<p>How unfair is that, really?</p>

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<p>I did go to a CC, and worked my way through and paid for it debt free-- and had a 3.7 despite having learning and developmental disabilities. Two years at my state flagship is 50k in loans, assuming you don’t need any summer school-- which I did. Transferring to a school that provides good transfer scholarships is great in theory, but when you have to stay in state your options are limited, and of all the schools I applied to I was only offered one $1000 non-renewable scholarship, and I applied to just about everywhere I could think of. Even if I had gone to the least expensive school in the state, which I did apply to but it was 7 hours drive away and I was hoping my parents would change their mind about letting me live at home and commute, my debt load would still have been around 40k and fewer courses would have transferred-- and I DID get to commute for summer school and couldn’t have otherwise, since it’s not like you can take courses at the CC at home over summer when you’re a transfer student because of the transfer limits.</p>

<p>And I am saying my parents won’t pay one cent toward college. They helped me outfit my dorm and rented a truck to haul me out here (wasn’t allowed to live at home and commute), they cosigned my loan, and that is the extent of their involvement. I pay the full COA by myself. I understand that not all families can pay their EFC, but when your EFC is 25-35k (what ours has ranged) and your parents don’t pay ANYTHING it can be a little problematic for avoiding big debt.</p>

<p>Like I said, I don’t really think there is a way to be fair to everyone that doesn’t involve me getting the shaft here because the reality is that the powers that be feel that parents are obligated to pay for college if they can afford it, and I accept that. I think it’s unfair to me, but it is the least unfair way to do things and it is perfectly fair to my family. If this wasn’t the way we do things parents would refuse to pay left and right and expect the govt to pick up the tab, and that wouldn’t be fair to anyone. So I accept that issue. The issue with medical debt, however, I don’t think is fair to my family. If our EFC weren’t entirely unreasonable for us by any stretch of the imagination perhaps my parents wouldn’t have given up on the idea of me going to college and left me to figure it out for myself. My parents owe the university hospital an entire years worth of tuition and room/board at my school for my sister’s hospitalization and that makes no difference in our EFC. How can that be?</p>

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<p>I, too, got shafted by the financial aid process – in the form of my mother agreeing to help pay for college but then deciding not to once I actually enrolled and was literally on campus. I grew up without college-educated parents or many of the resources that my peers had growing up, but my dad was able to acquire a large house and boat a year into my high school life. He eventually was killed in an accident and my mother received a massive insurance policy payout… but then she basically decided to run off and play with the money instead.</p>

<p>So I got the quad-shaft:

  1. Family death + the large policy that counted against my EFC and drove things up to a higher level than it would have been otherwise
  2. Large house counted as a sizable asset despite being somewhat later in the game
  3. First-generation struggles
  4. Remaining parent unwilling to pay after I had already gone to the school</p>

<p>Luckily, finaid understood my situation somewhat and knew how crazy my mother was to deal with (they had quite a few phone conversations with her and had told me that they’ve never had the pleasure of speaking to someone quite that crazy before). Unfortunately, they weren’t able to justify significant discounts or anything like that due to financial/legal reasons/etc even though I was on my own.</p>

<p>So I had to take on a ton of work to help pay for costs and help drive down the total cost of school throughout my college experience. It was absolute hell, but I managed to work off enough such that I graduated with about 50k in total loans. I had to skip out on so many things like books (I couldn’t afford to spend hundreds on books at the time, and there were constant ongoing issuing with my student account), and so I’d have to buy them online or buy scans or find a friend with the book or check college listserves, etc. The process of financing my education was so difficult that it made it hard to actually HAVE the education – my grades took a huge hit, and so did my emotions and health. Transferring was expensive and extremely difficult at the time, and it was also doubly hard to give up on sacrificing my Wharton education that I had worked so hard to achieve.</p>

<p>So, was any of this fair? In my case, it was pretty crappy, but I don’t think anything could have been done. I already received quite a few scholarships to help lower the loads – so somewhere out there, many people have helped to invest in my education even though my parents did not. Is it fair to those people? </p>

<p>It’s always hard to define what’s “fair” when you have an expensive good but a scarcity of resources – or an unequal distribution of resources. Who’s obligated to give and who isn’t? Even at Penn, though, I felt that I rarely encountered other poor students in a similar situation. Many of my peers were rather well-off. Those who were poor usually had very supportive parents.</p>

<p>All I can really say about the entire process is that college is absurdly expensive, and nobody ever truly makes it alone.</p>

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<p>I did go to a CC, and worked my way through and paid for it debt free-- and had a 3.7 despite having learning and developmental disabilities.</p>

<p>Awesome! </p>

<p>So why did you say that your “ONLY” choices were …</p>

<p>*so my choices are huge debt or not going to college until I am 24. *</p>

<p>???</p>

<p>You had a 3rd choice (which you took) and that’s going to a CC and then going to a state school and paying for it yourself.</p>

<p>I don’t know your personal situation, but many kids have parents that don’t help directly with college costs, but they do let their kids live at home for free while commuting to a CC and/or local state school. During that time, the parents may be paying for cell phone, car insurance, or other things. In a rather big way, that can be a contribution. Room and board can be $10k+ per year.</p>

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<p>I think Ema paid for the CC portion out of pocket but had to borrow for the university.</p>

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<p>^MOM2: The COA in-state at her university is approx $24,000 Undergrad, because it is a well-regarded flagship. With an EFC of $30+k, she therefore had to finance her COA entirely from loans, ergo “Going into debt.”</p>

<p>Had she waited until age 24, she could have applied as an independent. IN that case, the school likely would have met most need via grant, and she might have also been Pell Eligible.
However, deferring school to age 24 is a risk in other ways.</p>

<p>So I suspect this is why she said

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<p>Eg. she considers $50k to be a huge debt – which is more or less correct as it is double the “average” college undergrad debt.</p>

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<p>A lot of schools, though, don’t fill most need with a grant even for independent students. As you say, it’s a risk, and you might end up just burning time if you don’t have a solid plan to get into a college program at 24 and are just hoping that things will fall into place once you hit that magical age.</p>

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<p>A lot of schools, though, don’t fill most need with a grant even for independent students. As you say, it’s a risk, and you might end up just burning time if you don’t have a solid plan to get into a college program at 24 and are just hoping that things will fall into place once you hit that magical age.</p>