<p>Working women manage to work and take care of their homes and families, though they may have to pay for help (I did, and it did take a chunk out of my paycheck). Did you not say you were done parenting?</p>
<p>It’s not me, we pay 100% of private school tuition. </p>
<p>Anyway, the point was not really about working women vs non-working women per se. The question was, is it correct in an economics sense to think about college aid as a highly progressively structured tax. Maybe I should have said, “Dad was thinking about taking on a 2nd job but decided not to.” The incentives (or disincentives) would be the same.</p>
<p>mathmom, many women in your situation do the math and stay home. Even without the issue of lost financial aid, with a high earning husband putting their first dollar earned in a high marginal tax bracket, the extra cost of daycare, commuting, and clothes eat up most if not all of the paycheck. And then you gotta cook and clean too??</p>
<p>I generally do not fault people for making economically correct decisions.</p>
<p>There’s a difference between deciding that working is not bringing in additional income for the family because of the costs of clothing, commuting, daycare, additional taxes, etc…) and not working so as to get financial aid. In the second case, others pay so that the student can attend the university. The financial aid pot is not bottomless. There are students whose parents genuinely cannot afford for their children to attend university without financial aid, even when both work at two jobs.</p>
<p>Is the analogy to taxes correct, though? </p>
<p>If we make less and rely on financial aid the university has to find its money somewhere else. (Which it does to some extent anyway; tuition isn’t near to covering the cost per student at a research university).</p>
<p>If we choose to make and live on less money, doesn’t the government have to run on money paid by other people? Does that make it unethical to not work as much as we can, because then we aren’t paying our share for public services?</p>
<p>I agree that there needs to be some actual financial incentive to work (especially if the work itself is not particularly enjoyable). It might make sense for colleges to cut aid by 50% of AFTER TAX income. That would be more reasonable, IMHO.</p>
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<p>What do you mean by this? Aren’t you using police, don’t you put out garbage, use roads, get your road shoveled, etc… the same as people who do work?
Now, if you decided to not work and not send your child to university, then the issue of financial aid would disappear.
I have absolutely no problem with people wanting to stay at home while their children are small. I have absolutely no problem with people deciding to live on a single income (though I think it’s fraught with risk). What bothers me is the idea that one would deliberately choose not to work when work is available and one is able to undertake that work, solely in order to maximize one’s chances at financial aid.</p>
<p>VP: And where would the colleges find the money to expand financial aid so massively?</p>
<p>“And where would the colleges find the money to expand financial aid so massively?”</p>
<p>Well, we’re pretty far down “the slippery slope” at this point, so let me add this anecdote. Our family is being solicited for a large contribution to a private university family members have attended. The size of the contribution is not sufficient to get our name on a building … far from it. But it’s large enough that we’d have to deduct it over several years’ tax returns. This money is LIKELY to go in the financial aid pot, and a lot of the financial aid pot will go to students whose parents who had plenty of money to pay full-fare … until the credit crisis hit. [Very few economically disadvantaged students have the stats to be accepted to this particular university.] To our family, using our hard-earned and well-managed funds for this purpose feels like a bit of a waste.</p>
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<p>marite: are you the suggesting that finaid calculations be changed such that an able-bodied parent (dad or mom) is assumed to be working even if they are not (once the sibs are no longer “small”)?</p>
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<p>I do believe that is what fafsa does…of course, some/a lot? of that remaining ~50% is eaten up in commuting, work clothes, and child care for other sibs, etc.</p>
<p>bluebayou. No, I do not think colleges should assume any such thing, although during welfare reform, it was assumed that women who did not seek work were “welfare queens.”
But the OP raised the issue of not working as a strategy for getting finaid. And that I find troubling. I’m with Newhope (although my own contribution to my alma mater is small).</p>
<p>marite: If its’ troubling, shouldn’t finaid deal with it? </p>
<p>But how do you decide what is “troubling”? The second parent who quits a job so they qualify for more finaid, or the second parent who purposely holds off re-entering the work force until last kid is a senior (and thus maximizing finaid)? Aren’t both the same effect? If both are troubling, aren’t both finaid kings/queens?</p>
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<p>We’re talking about an optional purchase here: a college education. So I don’t see anything wrong with making this assumption, so long as mom/dad are able-bodied, there are no more dependents at home, and the income assumption is around minimum wage.</p>
<p>Bluebayou: I find a lot of things morally troubling. But I leave it to those involved to decide how to behave. We’re dealing with the realm of intentions here. As I said, I have no complaint about the choices women make whether to be stay at home mothers or hold jobs outside the home. I don’t think any finaid officer would like to be in a position to guess what lies behind the decision of a mother to stay home, for however long. But when someone openly declares that not working is a way of gaining more finaid, I have no trouble expressing my opinion of such a strategy. It is a very different calculus than deciding that the marginal benefit of working is zero or near zero.</p>
<p>I don’t think not working is the best solution for funding a college education but people have funny ideas about how it all works. I’ve never run the numbers but I’m guessing that if after tax take-home etc. was in the region of $10-15,000 it would be rare that the college or university would give $10-15M of non-loan aid simply because of the lower AGI. If it were that simplistic more people would give up the second income as a college financing strategy. Me thinks the OP’s friend simply doesn’t want to work which is true of many SAHM who contemplate re-entering the workforce after an long period of unemployment as the working world has changed greatly in the past 2 decades. People can justify anything if they try hard enough.</p>
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<p>Then I am fine with the way things are and perhaps the OP could point that out to her friend.</p>
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<p>I was wondering the same thing. I’m not well-versed on the financial aid thing because we won’t qualify even on one income but I can’t imagine it’s a dollar for dollar thing - meaning for every dollar below a certain AGI you automatically get one dollar of non-loan aid. Or maybe it is? Again, I know every little about financial aid. I always thought that qualifying for financial aid means they determine the level of financial need the student has and while you get some non-loan aid, it’s rarely 100% and most families must cover a portion of it themselves (through loans or savings or whatever). I’m sure I’m oversimplifying things but the premise of the thread (100% implied tax rate) doesn’t make a lot of sense to me unless the family is at the very lowest income bracket.</p>
<p>We’ve run the numbers for our family, and have found that the financial aid calculation for our S’s private college is largely income-driven. Variation in assets and debt make little to no change in our EFC. Indeed, the fact that we’ve been spending down our assets on S’s tuition did not alter the EFC for our D, who will start the year after S finishes. Our EFC for her was about the same as for S’s first year, despite the fact that our savings are depleted.</p>
<p>So here’s what I think the problem is for the OP’s friend: most colleges only concern themselves with the family’s income the last tax year. Some schools may consider an additional year back. Based on that income number, there is a presumed ability to borrow and to have saved. But this could be totally unrealistic if that income number is brand new, ie. one spouse just went back to work that year but previously the family’s income had been tens of thousands less. It will make good financial sense for the spouse to return to the workplace only if s/he will earn above a certain amount, a calculation which will vary depending on that family’s income. Going back to work for minimum wage will likely not be worthwhile economically.</p>
<p>In the scenario described by the OP, it makes no sense to waste 8 hours a day working at a job for no net income or other benefit. I can’t believe this is even a question. It would be better to volunteer for the job for no pay and let them hire somebody in addition who could use the money. Remember, you only get to go around one time, then you’re done.</p>
<p>When my children were little, I ran the numbers for going back to work, using the cost of child care. I made $1.40/hour after all the expenses of working. BUT, as I told my husband at the time, the expense of replacing me after I went crazy from being at home full-time with my kids would have been even higher. (I went back to work part-time.)</p>
<p>My answer to questions about working/not working and paying for college (in this case) would be about the same: “do you enjoy working? do you need the social security later? are you vesting a pension? do you expect to stay married?” </p>
<p>My husband and I long ago made the calculation that it made the most sense, in terms of our collective family happiness, for me to work part-time and be the household/financial manager part-time. That worked for us; your mileage may vary.</p>
<p>“wasting eight hours a day working?” hmmm…</p>