I agree with those who are pointing out that a lot of the things that are “supposed to help with financial aid” don’t really help, or don’t help enough to cover the costs. (for example the commission and fees on an insurance policy that doesn’t have to be reported on the FAFSA may be much higher than the gain in financial aid, if there even is any)
I think ethically, we need to be willing to pay for our kids’ educations. I cannot fathom the lessons a parent thinks a child will learn by paying their own way through school when a parent has money but just won’t share it.
On the other hand, the financial aid formulas are broken. There are so many people who just do not have their EFC, or perhaps they have it but are not comfortable with the risks involved in paying it (selling the family home and using it towards college, taking a loan when future income is not assured, etc).
Students are young and optimistic and sign up for loans with a bright vision of their futures. Parents who have lived a while know that bad things happen to good people and become more risk averse. Things like health issues, expensive accidents, natural disasters, and unemployment or underemployment (loss of overtime or bonuses etc). Maybe our own parents or aunts/uncles were forced into early retirement when they were laid off and there was age discrimination when they tried to find a new job.
I don’t think that trying to lower or pay less than your EFC is unethical in and of itself. The EFC as it exists today is not a fair standard for all families. But the ethical line depends on how much money you have, and how and why you are doing something to try to spend less than that.
My current college kid is full pay EFC but is going to a merit aid school. I was perfectly willing to be full-pay at the state U, but not at the private LAC she is attending due to the price tag.
Are there kids out there who “needed it more” - yeah. Did they apply to my kid’s school and did they get admitted with enough aid to attend? I don’t know. I don’t choose how the LAC decides to allocate merit and need-based aid. Is my daughter’s scholarship a win-win for her and the school? Yes, or the school wouldn’t have offered it. Is it a win for society as a whole? That part I don’t know.
I didn’t make any particular effort to hide assets from the formulas, but I steered the college list towards schools that either we could afford or that had a track record of awarding merit that would get the price tag within the budget. And this particular school is not an Ivy or anything where I am keeping a needy child out of the best opportunities in the country.
But, yeah - articulating the differences between “playing the game,” “playing the game as hard as you can,” and “cheating” is a hard one. I have much more sympathy with families that either never had the money or had it but spent it on something like surviving an adverse event without going bankrupt than I do with people making elaborate plans to work around the system to get more aid. Charitable or retirement contributions that reduce your income tax are one thing, an offshore shell company is completely different. But, I can’t really articulate a coherent philosophy. It’s not “anything goes,” but it’s not “ignore the rules of the game” either.