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Undergraduates with family income below $200k will be tuition-free at MIT

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Re: Undergraduates with family income below $200k will be tuition-free at MIT

#161

Post by s1artibartfast »

ndriscoll wrote: post #151
s1artibartfast wrote: post #94

Earlier quoted context omitted.

Because it is really a discount to the parents, not the student. It is understood that few 17 year olds have saved enough money to pay MIT's tuition of $85k/year for 4 years and parents are usually footing the bill. Yes, students who's parents have money but choose not to spend it get a rough deal. You can make a pretty strong case that it is their parents screwing them over, not the school. The school doesn't owe a…

You can't make that case at all. The price these name-brand schools ask is pretty much "how much do you(r parents) have?", and your kids could instead go to state school (if they can get into MIT, they probably qualify for a full ride scholarship or at least close) and have that tuition go to an ~80% down payment on their first house.

I agree with that. I dont see how that is MIT's problem.

Re: Undergraduates with family income below $200k will be tuition-free at MIT

#162

Post by tdeck »

jjk166 wrote: post #97
tdeck wrote: post #67

Earlier quoted context omitted.

If they were spending the money on those things, this might be an argument. But they're not spending it; they're hoarding it.

I don't think you understand how endowments work. It's not a pile of gold sitting in a vault on campus. It's an account which is productively invested and generating returns which are what's actually used for funding operations. A $20 billion endowment would be expected to produce about $1 billion per year, or around 20% of the annual operating budget. They need to bring in about $4 Billion more dollars per year to k…

I do understand actually, and my argument is that this wouldn't be acceptable in any other category of nonprofit, so why is it acceptable for universities? If the Red Cross decided to take donations and then hoard a 20 billion dollar endowment while also charging top dollar for disaster relief, people wouldn't accept that as a legitimate strategy. Why is it suddenly OK when a university does it?

Re: Undergraduates with family income below $200k will be tuition-free at MIT

#163

Post by potato3732842 »

TheJoeMan wrote: post #32

This is a great step in the right direction. I can't speak directly for MIT, but there are issues with how these programs don't apply to parents with small family businesses. My parents had a small business, with my father taking home a salary of $XX,XXX. Duke University used the business assets to determine the EFC (expected family contribution) of literally 90% of the salary. Essentially saying to sell off the fami…

>but there are issues with how these programs don't apply to parents with small family businesses.

That's a "happy accident". The college educated bureaucrats who joined hands with academia to create these programs were perfectly fine omitting the plumber's children. They sure weren't gonna do a huge amount of work to find away to avoid an edge case they were ok with.

Re: Undergraduates with family income below $200k will be tuition-free at MIT

#164

Post by s1artibartfast »

xboxnolifes wrote: post #116
s1artibartfast wrote: post #78

Earlier quoted context omitted.

Isn't the entire point of these assessments to look at total assets, and not just annual income? I dont think this was an oversight or mistake. I think the expectation was that yes, people should sell assets if they have them .

The "mistake" is that the assets themselves are the source of income. Sell them off, and the income goes away too. It's the equivalent of expecting the parents to use 100% of their income to put their kids into college, which is impossible.

IF I have stock and make $XX,XXX in dividends, how is that different? IF I have own apartments and make $XX,XXX in rent, how is that different?

I think the idea is that Yes, the expectation is for people to make actual sacrifice before they qualify.

Re: Undergraduates with family income below $200k will be tuition-free at MIT

#165

Post by switchbak »

s1artibartfast wrote: post #78
TheJoeMan wrote: post #32

This is a great step in the right direction. I can't speak directly for MIT, but there are issues with how these programs don't apply to parents with small family businesses. My parents had a small business, with my father taking home a salary of $XX,XXX. Duke University used the business assets to determine the EFC (expected family contribution) of literally 90% of the salary. Essentially saying to sell off the fami…

Isn't the entire point of these assessments to look at total assets, and not just annual income? I dont think this was an oversight or mistake. I think the expectation was that yes, people should sell assets if they have them .

Should they also cut their kidneys out and sell those too?

For someone not in your system, the expectations that seem normal to you sound absolutely insane to others.

Re: Undergraduates with family income below $200k will be tuition-free at MIT

#166

Post by llamaimperative »

potato3732842 wrote: post #163
TheJoeMan wrote: post #32

This is a great step in the right direction. I can't speak directly for MIT, but there are issues with how these programs don't apply to parents with small family businesses. My parents had a small business, with my father taking home a salary of $XX,XXX. Duke University used the business assets to determine the EFC (expected family contribution) of literally 90% of the salary. Essentially saying to sell off the fami…

>but there are issues with how these programs don't apply to parents with small family businesses. That's a "happy accident". The college educated bureaucrats who joined hands with academia to create these programs were perfectly fine omitting the plumber's children. They sure weren't gonna do a huge amount of work to find away to avoid an edge case they were ok with.

That's quite a claim. Got any evidence for it?

Re: Undergraduates with family income below $200k will be tuition-free at MIT

#167

Post by s1artibartfast »

bb88 wrote: post #152
Dylan16807 wrote: post #127

Earlier quoted context omitted.

A bunch of stock is a source of income too, but it wouldn't be wrong to use some of it. If the business is worth enough then selling it can replace all the income you would have ever gotten from it. It's not as simple as "income goes away". The specific numbers make all the difference.

> A bunch of stock is a source of income too, but it wouldn't be wrong to use some of it. Normal US tax law that most people fall under says no, stock itself is not income. It's only taxed at the time of sale. If you ask for mark to market taxing then any increase in market value during the calendar year will count as income -- even if you didn't sell anything throughout the year. But usually those people are drawing…

Yes, but I think these tests look at both income and assets (like stock). That is why people get dinged for owning assets, even if they are a source of income.

Re: Undergraduates with family income below $200k will be tuition-free at MIT

#168

Post by tdeck »

blackhawkC17 wrote: post #83
tdeck wrote: post #67

Earlier quoted context omitted.

If they were spending the money on those things, this might be an argument. But they're not spending it; they're hoarding it.

$9 billion annually [1] qualifies as not spending it, I guess. I wish people actually checked figures before ranting online. 1- https://projects.propublica.org/nonprofits/organizations/231...

The page you linked shows their revenue is $9.93B/year and is greater than their expenses. So clearly they're not spending down the principal.

Re: Undergraduates with family income below $200k will be tuition-free at MIT

#169

Post by llamaimperative »

HeyLaughingBoy wrote: post #103
JumpCrisscross wrote: post #39

Earlier quoted context omitted.

It’s incredibly difficult to structure these rules in a way that doesn’t discriminate against small businesses while not opening a giant loophole for the rich.

There really aren't that many rich people, relatively speaking, so who cares? That's throwing the baby out with the bathwater.

At an upper end college? Yeah I guess it has to be like definitely below 90% of the population. Basically zero!

Re: Undergraduates with family income below $200k will be tuition-free at MIT

#170

Post by paulcole »

technothrasher wrote: post #143
jjeaff wrote: post #68

Earlier quoted context omitted.

I can understand why they might do this. Many people who own a small business underpay themselves significantly and use the extra funds on the business to build up assets. This defers taxes and allows the funds to be reinvested without tax. They might even take out loans on those business assets. The same way the wealthy will pay themselves a tiny salary and just live off the asset value of their stock. Someone who o…

As an owner of a small family business, I have to pay close attention to making sure my salary and that of my other family members involved is "generally commensurate with our duties" or the IRS will be up my backside pretty quick. I obviously try to minimize it as much as possible, but if you drop it to something insignificant and the IRS notices, they'll adjust your income and expenses reported to reflect your non-…

> the IRS will be up my backside pretty quick

How many times were you audited before learning this valuable lesson?

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