Tuition Exchange / Merrit Question

blossom
Sun, 16 Dec 2018 22:27:18 +0000

One of your kids decides to go to a Service Academy (they are free). So no benefit. One of your kids decides to go ROTC to a college which doesn’t participate in your exchange. No benefit. What if your university decides to downgrade or eliminate the tuition benefit (it happens) or what if a change to the tax code makes the benefit almost a wash with the increase in taxes?

I see your plan as filled with downsides and only a narrow window of upside (the plan stays the same, your kids want to attend the college you work for, or qualify for full TE at one of the exchange schools, your kids wouldn’t qualify for merit aid at a college they like more, or your kids won’t qualify for a “meets full need” need based aid college, etc.)

Lower paid jobs also get a lower contribution from your employer and/or allow you to shelter less money for retirement. For a year or so, that’s not all that meaningful. But over the course of a decade (if your kids are now 12 and 15, you need to be making a ten year commitment so your younger child finishes college) that can amount to a LOT of money which did not get set aside, pre-tax, for your retirement. That’s likely a bigger hit than the extra money (potentially) you’d get from TE, no?