FA (besides Pell) is not an entitlement program. You are risking a lot with any of these strategies. Any single element goes awry (like a D in senior year BC calculus for the kid you thought was breezing his way into one of the “meets full needs school”) or a suspension in September for a kid who hasn’t had a whiff of trouble in 12 years, and your plan to cut your income to get FA is on the rocks.
AND- the current list of generous colleges is NOT a guarantee in perpetuity that their policies won’t change. I remember when Brown shifted from “need aware” to need-blind a few years ago. As far as I know, that change didn’t come with a promise that this would be the state of affairs forever- just that the then-president (Ruth Simmons, who is now gone) had it as a strategic priority. Presidents change, the stock market/endowment changes, priorities change.
Acdchai- your friends were sure counting on a whole lotta luck to make their scheme pay out. A parent works to pay for their kids college education- that’s not newsworthy. The idea that you’d voluntarily make yourself “poor enough” to qualify for aid… because why have your “whole salary” go to tuition? Gee, that’s called being a parent.
When my kids were young and my entire paycheck went to daycare, taxes, and seemingly the pediatrician for every-other visits for an ear infection… hey, that’s what it means to be a parent. Sure- quit my job, qualify for one of the programs in my state to provide pediatric care for low income families-- now THAT’s a responsible way to move forward.
@planner03, I don’t consider financial aid a subsidy program akin to food stamps and welfare at all. I suppose if your child is attending a state school you might lean towards that thinking but if a private school deems we are needy and decides to smile down on us (which they did), its my belief that they want the kid there and whatever formula they are using makes it financially possible. FWIW, I consider myself low income and yet have never accepted any government assistance with the exception of a low rate mortgage (when I was 23), but the instate flagship ended up being 4x my EFC. D was given a full tuition grant at a private school (not merit) and I consider it a gift, not a subsidy.
NE- your D sounds wonderful. I think the point being made up thread is not to criticize your outcome… but to point out that if you were needy because you quit a job (because you hated your boss) and thereby qualified for aid, being smug at your wonderful choices would be a little off.
The answer to hating your job is to get another job, not to expect the financial aid fairy to bail you out.
I don’t believe they would. People don’t want to increase the minimum wage, but they don’t like it when people quit working because they make out better on public assistance either. I think taxpayers tend to not want to subsidize people who can work, but don’t. I’ve read posts on CC by full pay parents of kids at expensive colleges who complain that they’re subsidizing the kids who are getting grants. I don’t know if it’s true or not, but I can’t imagine they’d be happy knowing other parents were giving up their jobs to qualify for that aid.
I think it’s shortsighted to give up a job to gain financial aid. In example (1) of the OP, the couple isn’t breaking even if one parent gives up a $60k job so the child can qualify for a $60k full ride need-based grant. If they didn’t quit, at the end of 4 years they could divert that money to their retirement account. So beginning on year 5 they’re $60k in the hole every year, or $60k minus whatever that parent earns when they go back to work. I’d be interested in knowing which parent is giving up their job. I suspect in most situations, it wouldn’t be the husband.
In example (2), the $180k earner gets a $20k/year promotion which means the student loses a $30k/year grant. At the end of 4 years they still have that extra $20k coming in. Longterm, they’re going to come out ahead.
The only time it may make sense to consider not increasing income is on the other end of the financial spectrum. Low income NYS residents qualify for the ~$5k Pell grant AND a ~$5k state tuition grant. Parents close to the cut off may not net enough from an increase to cover what they would lose. When finances are that close every dollar makes a difference, and if they miscalculate they may not be able to pay for college at all.
In a forum dedicated to those social programs, I’m sure they would receive plenty of support, but from the Holier Than Thou crowd on here, they’d receive zero.
Let’s be honest, every system has it’s flaws, and people are going to game the system.
I’m curious if the people on here who are so opposed to this type of planning, on moral grounds, would be willing to voluntarily give up their financial awards (assuming they received some) if a review proved that there was a more needy applicant in the applicant pool.
For example, an applicant who’s need was underestimated because his parents got in massive credit card debt because of an injury, or a gambling addiction, or whatever.
Your financial aid award is not a competition with other applicants. It is based on YOUR financial aid application and YOUR need.
Debt because of an injury could be considered a special circumstance and could be subject to review by the college financial aid folks.
Debt from gambling or addiction (the purchasing of the drugs) would not be considered…as that would be considered choice consumer debt…which is not factored into financial aid.
Nobody in this thread suggested quitting the only job in the family to go on assistance. That’s a straw man. We’re talking about possibly giving up a low paying job that nets very little income when you factor in all of the expenses it creates.
Giving up a job like that might make sense even in there are no kids approaching college age. Of course it doesn’t make sense in most cases. All I’m saying is that there are a very small number of situations where it would make sense, like when the person wants to quit the job anyway, and take some time off. Maybe to go to school themselves, or just to concentrate on their kids.
Saying that it never makes sense is just oversimplifying it. And saying that it’s immoral is laughable.
There are many students who are in an impossible situation because they have parents who refuse to pay for college, or non custodial parents who refuse to pay but whose income is still considered or a step parent who is not paying. There are student who really are independent but who fafsa and css do not consider independent. The system has decided that for the greater good, those student are SOL. They can get married or join the military or wait until they are 24, but they can’t have FA until they can fill out the forms.
It’s never going to be perfect for everyone. Someone is always going to get less, or feel someone else got more. Some are going to be offered more at School A, but really wanted to go to School B. Who can know when our kids are juniors in high school that making $10k less will mean a Pell grant, which might also trigger an SEOG grant, and a state grant? I somehow imagine that the people who might benefit most are the very ones NOT doing these financial gymnastics. They are the people who need the extra $10k when the kid is in high school. I’m sure there are people who have a parent quit a second job or have one parent say home and it does benefit them. So what? The entire system is not going to change because of a few people benefiting in ways the system was not designed for.
I knew a family with 5 kids. The mother stayed home, the father was a lawyer. The kids attended a Country Day School on 100% financial aid, including bus and meals. I knew them from a community band program where they were on scholarship for lessons and camp. The mother told me they made sure to stay ‘scholarship eligible’ for all their activities by the father making just under a certain amount every year. My kids had been offered a scholarship at the same school and I turned it down. I didn’t want my kids to always be the poor kids, to not be able to participate in all the clubs and sports and trips the others at this very elite and expensive school did. (I used to nanny for kids who attended this school; being invited to 40 birthday parties a year wasn’t unheard of, and the parties weren’t at Chuck E Cheeses either ). This family was okay with it, but I don’t think the kids had many friends from the school, or in the band. I don’t think they were getting invited to 40 birthday parties a year. I know that the people running the band were not happy with subsidizing this family year after year (the director told me, as she felt the subsidies should be temporary or for those who truly needed them) but the rules allowed it and so the family stayed.
Food stamps, and medicaid keep your life at a low basic standard, they are designed as a temporary backup when all else fails. Here we are talking about getting a kid subsidized tuition at a meets full needs school so that he or she can get a better education and go on to a successful career.
First of all, your child has to be accepted at a school that meets full need. Some of which are need aware and accept your kid knowing you will need money. The schools very much game the system as well. With admissions, with ranking, with advertising to attract kids who will never get accepted so their USNWR goes up. Until the FAFSA was changed this was used against kids so that schools could see how well they ranked and dole out acceptances and FA accordingly. Schools also have discretion over FA (what they decide to count, what they do not, you cannot ever say, why did my business partner’s kid with the same income but better stats get more money than my kid at your school?!) so that even with the same EFC, not everyone will get the same amounts, even at meets full needs schools. With schools that have the NPC that show you will get X in FA but do not mention ON THE NPC that they only meet full need for some students and not others. Meanwhile someone has applied based on the NPC who would never have applied otherwise (see post about BU transfer applicant). If they do not meet full need it should be on the NPC and in bold on the FA application, many parents and kids applying for the first time are not very sophisticated and some schools take advantage of that. If a parent is sophisticated enough to understand the system great. Most parents shoot themselves in the foot when filling out FAFSA and CSS Profiles and probably disadvantage rather than advantage themselves (see discussion about UGMA of siblings, most parents will add them in even when they should not).
States where a decent public education runs north of 30k a year. Why does a degree at the #50 private cost $65.000 a year in the first place. How is a family making 200k a year supposed to pay for that if they have 2 in college? That is $130k? In the case of the lawyer with 5 kids mentioned by another poster, their college education would cost about 1,300,000! That assumes they do not go to graduate school! Add that in and it could be $2,600,000. How does that even begin to make sense for one family of moderate means to pay? How would that father ever retire? Even at a public school that is over $600,000.
The point is that there are situations where you would be working for free and even situations where making more money will cost you more, negative income. Only an accountant can advise you about the specifics. Is it really for us to judge other people’s individual circumstances.
There are loopholes in every system as well. If you hold stock for 364 days you pay a hugely different rate than if you hold the same stock for 366 days. No one is volunteering to pay at the higher rate. Yet what does 2 days change in reality?
This is getting old so I apologize to others who have read this.
We were a two professional wage earner family. My husband’s income paid pair regular bills. Mine paid for college only for 7 years…except I did continue to contribute to my retirement accounts too. But really, I never saw any of my paycheck…not a penny of it…while my kids were in college. It went in direct deposit, and put auto withdrawal.
I was happy to be able to pay those college bills.
It never crossed my mind that I should quit my job. Never.
There was a discussion that one of my friends had when our kids were little, she hated the idea that all these professional women were quitting jobs because the cost of daycare made it ridiculous for them to work. She talked about the opportunity cost of not working, that in 6 or 7 years you will be done with daycare and then you will be at a point where your job will have advanced enough that it will be worth it to continue working. For many people she was right but I doubt she would ever have been right for that lawyer’s wife with the 5 kids even if the kids were in an excellent public school with free band classes.
@thumper1 I do not disagree with continuing to work if you like your job, there is potential for career advancement and you have enough left over to contribute to your pension. I doubt that would be true for the lawyer’s wife if she went back to work after being home for 15 years. Plus, if she is in her 50s instead of her early 40s, she will be of retirement age when they are all done with college.
Absolutely agree, band manager should have been reported for sharing the information.
No one is entitled to a $250k education, and NO ONE is entitled to graduate school. People who have 5 kids often take the free route - free public school rather than private, free day at the zoo rather than paying for 7 admission, camping vacations rather than a suite at the Hilton. If schools want to offer scholarships, that’s up to the school. As I said, we were offered a scholarship but I turned it down. Unlike this family, I didn’t want to live at a ‘scholarship eligible’ wage if I could earn more. I didn’t want my kids to be unable to participate in all the activities.
I was talking to my daughter about finances and told her we were pretty poor for a time when I was out of work and they were in 3rd-6th grades. Her response was ‘but we didn’t know it.’ They still did girl scouts and rec league sports and a lot of other inexpensive or free things. We didn’t feel entitled to participate but were grateful when the clubs or organizations made it possible. If they would have gone to the private school, they would have known we were poor.
There are very few free options for college. Even UA is only for certain people who score above a certain amount on a standardized test. I still do not understand why is costs $260,000 to attend the average top 100 private?
Or why in certain states it is over $120,000 to attend a public?
Realistically most families cannot afford it. Period.
The opportunity cost of not working for a period of time can be phenomenal. I was away from professional, full time work for almost 20 years. I cleaned houses for a while, was a playground attendant at the elementary, did a few years of substitute teaching … not to keep my income low for financial aid, but because it was what our family chose. Let me tell you, it cost me a bundle. I lost hundreds of thousands of dollars in real wages, plus my pay upon returning to the full time, professional work force is MUCH lower than it would have been had I stayed employed. I have too much responsibility for too little pay … I look at the careers of my friends who had similar jobs to my once-upon-a-time job & I see better job, better work environment, far better pay. Frankly, I think anyone who believes quitting work to get more financial aid is a good idea is a bit clueless.
Statistically most kids do not get above the 51% (obviously) on the SATs either so that they qualify for top colleges (or whatever the number is). Most do not earn a GPA over 3.8 or even 3.3. We are talking about a specific segment that can qualify for schools that provide need based aid without a gap or one that is manageable.
Perhaps our discussions should be limited to how to pay for community college. While I applaud everyone interested in going to college, whether it is a community college in Wyoming part time or Harvard, the reality is far more posters on this site are trying to figure out their chances of admission or financial aid at a top 100 college (public or private) than anything else.
Interestingly, all two parent families pay a penalty in FA if only one parent is working and the other is not a dislocated worker. It reduces aid by at least $1,000 if not more depending on the school. Try an NPC with the same income divided between two parents and then made by only one parent.
@kelsmom, you are absolutely right and that is the real reason no one should quit a job for financial aid. However hindsight is just that and perhaps at 25 or 35 you had other priorities and did what made the most sense for your family at the time. No can completely say what your associates gave up in non monetary compensation to make those higher salaries.
@kelsmom call me skeptical, but I never believe those whole “retired early to get full fin aid” stories. Wouldn’t the most generous schools catch these people through the PROFILE? I mean, they must have tons and tons in retirement accounts and those can’t all be protected, right?
The balances IN those accounts actually are protected. BUT the distributions from them are not. And surely these early retirees are living on something!!
Of course the retirement can all be protected - it’s up to the schools to decide what to consider. FAFSA protects it all except the funds that would be income in the prior year. Private schools can decide to do the same thing and ignore all retirement funds, home equity, and anything else. I don’t know of any schools that impute income and decide that a parent shouldn’t have retired early or shouldn’t be a public defender but should be a corporate lawyer and make more money. I worked on a divorce case many years ago where the court did impute income. The ex was a state supreme court judge, making $50k (long time ago). Court said, “that’s nice, but you could be making $200k as a partner in a firm and your child support will be based on that.” (this guy was a jerk and there was no question the court was punishing him for past bad acts of not paying anything, but it is possible to impute income if it makes things fair).
There just aren’t that many outliers to make it worth worrying about. Not many people retire at 50 to get college benefits, AND can live off $25k in retirement funds per year. If you can, you’ve benefited from the system. Take your FA and be happy.