231–240 of 487 posts
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Because they can afford it. It's a redistribution tactic. You can also phrase it like this: college should be free for all to attend. Then, as long as you have a progressive tax scheme, the outcome is the same. Cheap for the poor, expensive for the rich.
Then are you suggesting buying anything should work like this?
A sham marriage (get a prenup if you want) is sufficient to have parents' income not counted by FAFSA.
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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-…
That still seems like heavy handed overreach to me. Should they not instead contact you for clarifications about the ambiguity?
When I was touring colleges as a high school senior I met someone who had gotten into MIT but whose family could only afford to send one kid to an elite college, him or his sister. He decided to go to a state school which was a lot less expensive but whose academics weren't close to the same level. This stuff matters to people.
UVA does this for households that make less $100K. Hopefully, they’ll follow suit and bump it to $200K as well.
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This is a common myth. This might explain why Harvard or MIT tuition is high but not the average college. Tuition mostly reflects staff costs and those have been going up due to Baumol's cost disease. Dentists, along with many other industries with its main cost being highly educated staff that haven't managed to scale production like online brokerages, have had a similar price increase since 1970.
You’re going to have to qualify where you are talking about. Where I am, California, that only describes community colleges. Even state and especially UC have “invested” significantly in infrastructure improvements paid for with loans backed by expectations of tuition income, which has had an absurd effect on growing tuition far outside of inflation. Very little of your tuition at these schools goes towards teaching…
What timeframe are you looking at?
Back in 2011, registration fees at UC Berkeley were $7,230 per semester, with $813 allotted to health insurance (which could be waived if you provided proof of existing insurance from your family), so $6,417 ignoring health insurance. Meanwhile, last year, registration fees were an eye-popping $9,847 for new students, but cost of health insurance grew much faster to $1,929 ($7,918 ignoring health insurance). This is about a 23% increase, compared to CPI-measured inflation of about 35% between Sep 2011 and Sep 2023.
(The next biggest driver of the overall increase was the campus fee, which went from $253 to $820.)
Or, if you look at just tuition alone, that went from $5610 to $6261, or just barely above 10%.
https://registrar.berkeley.edu/wp-content/uploads/2021/03/Fe...
https://registrar.berkeley.edu/wp-content/uploads/fee_schedu...
If you look further back, in 1999, tuition was a mere $1543, but I posit that tuition at UCs has actually been fairly stable over the past decade.
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It’s not an unintended consequence. Another way of phrasing your concern is “MIT will have an especially strong applicant pool” which is a desirable outcome.
100% agree, isn't this the meritocracy we want? The other side of this is saying the status quo is; as a high school senior with wealthy parents, you don't have to compete against as many strong students if you apply for MIT because it has high barriers to entry (that aren't based on merit), and so you should apply even if you aren't particularly interested in their offering. Also, the reality is most kids will be ap…
This doesn’t solve all of those problems but it’s a start.
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Interesting question. I can't think of anything outside of the education sphere, no. Maybe someone else will chime in with an example.
I would argue that financing a purchase (say, a house or car) falls into this category. The object itself does not change price, but the financing will change price wildly depending on whether the parents have good credit and can cosign the loan.