Ethics of Outside Scholarships

3togo
Thu, 05 Jul 2007 07:37:10 +0000

But in the same vein, are you all going to report the monetary gifts – often in the hundreds of dollars – that your child received as graduation presents since this is a form of income?

no and yes … we will follow the rules. If a gift is over $10,000 (I think this went up) then it will be reported as income because that is the law. Since I doubt anyone in my or my wife’s family will give our kids $10,000 for graduating from HS this is a moot question for us.

Why then did I say yes? If our kids receive gifts and they invest them the increase in assets will show up in the next financial aid cycle … so yes they will be reported. Our kids will not hide any cash under the matress so noone finds out. What they may do, and is within the rules, is spend gifts on items like laptops and other items they may need for college … and then their assets will not increase the following year.

The discussion we would have in our house is what is the behavior we would want to model for our kids … and we will land on following the system and living with the consequences. We may also try to change the system but we won’t end run it … and parenthood has made this much easier to do for us.