Parents with annual family incomes below $125,000 will pay no tuition
news.stanford.edu
news.stanford.edu
The only sad thing is how few people know about this. Under-privileged students think they can only afford state schools. In truth, I couldn't even afford a state school. Only a private college/university would give me the full financial aid that I needed to attend.
Thankfully programs like Questbridge[2] (it's not spam, surprisingly) help facilitate under-priveleged students applying to and attending top private schools.
[1] - http://colleges.usnews.rankingsandreviews.com/best-colleges/...
Harvard, for example, makes that guarantee only as to students whose parents' income is up to $65,000 a year (2)
1 https://fafsa.ed.gov/FAFSA/app/f4cForm
2 https://college.harvard.edu/node/426
Edit: In light of dollaaron's correction below, this is much less significant than I thought at first glance. This part "Scholarship or grant funds will be provided to cover these costs in lieu of a parental contribution" is still above and beyond what many schools do, but is similar to Princeton and Harvard, as he points out.
In this announcement Stanford clearly says that the no parental contribution level is 65,000, raised from 60,000 and now equivalent to Harvard/Princeton.
Am I misunderstanding how that works, or are they just saying "the parents should pay x and the student z - x" when they really mean "the total cost is z?"
Harvard was the most generous, fully funded tuition + room/board + clothing stipend (presumably to keep up with the lifestyles of what would have been my wealthier classmates) + transportation stipend to fly back home for holidays.
All of the other Ivies (Columbia, Cornell, Penn) had roughly the same deal - full tuition and room/board
Hopkins - I required that I borrow 15k over 4 years to attend. Interestingly, this is the school I ended up going to.
If you don't mind me asking, why did you make that (seemingly counterintuitive) choice?
Hopkins usually wouldn't be considered as a peer to the top schools which compete on aid packages.
It might just be a way of saying "pocket money", but if someone objected, this could be justified by Boston's climate. Poor students from warmer places are unlikely to own a sufficient range of coats and hats.
I wouldn't send this message through HN, but I don't know another way to contact you. If you join one of the Haverford LinkedIn groups, we can talk that way and stop spamming this thread.
This is a huge problem that, in retrospect, was rampant where I came from. A pretty typical middle-class suburban high school, but one which rarely to essentially never sent any graduates to Ivy League schools. Why? Because it wasn't part of the community's culture.
How do you fix this? In anything other than upper to upper-middle class suburbs, the parents themselves probably went to state schools and have middle class jobs (which themselves are under pressure now). So the parents and neighbors didn't know anything about Ivy League schools or how to propel their own kids into the upper class.
By the time most kids learn how the culture works, it's too late, they're already in whatever college and life track they happened to fall into. It's takes especially thoughtful parents or other older role models (like great teachers or counselors) to see a kids potential and tell them about their life options.
Some kids have this experience (maybe it's a family friend or distant relative that happens to be very wealthy and shines a light on possibilities to the kid), but most do not.
That is probably true, but there are undeniable benefits from the networking that happens at schools like Stanford. So if you have motivation and talent, you may derive even more benefit from going to an Ivy or similar school.
All of this makes a big difference when getting your first couple of jobs. After that, it doesn't matter as much.
http://cognitomentoring.org/blog/how-much-does-where-you-go-...
In regards to the online content, keep in mind that this content has been developed and published with the knowledge that tens of thousands of people will watch it, so it is important to ensure it is of high quality.
After that point, performance bonuses in their many forms can have such a large impact and that doesn't seem to be represented in salary comparisons.
Hmm, I'm skeptical that it was a cultural issue. I went to a suburban high school and the issue wasn't that we didn't somehow know about the top schools, it's that you had virtually zero chance of getting in.
My best friends were the top couple students from my year and the year before me and I watched them mortified as the pattern played out -- they each applied to several top tier universities and were deflated when the stream of rejections came in (though one got into Notre Dame). Just being a valedictorian, active, national merit scholar wasn't enough. Most ended up going to their "safety" schools -- either University of Texas or Texas A&M.
My takeaway from that was that if you were white, middle class and middle-American suburban, that there was almost nothing you could do distinguish yourself enough to get into the country's top schools. As such, I think this announcement is more meaningful for folks from genuinely poor backgrounds than for those from relative suburban privilege.
90% of my graduating class fits that description. Out of a graduating class of 500 I'd say close to 10% of my class got into an Ivy League. Hell we had 9 get into Cornell alone. The 2013 class sent about 5%. It is a public HS but they offered tons of AP/extra curriculars/etc.
My school district, an amalgamation of suburban enclaves and small towns, only had about a third of that. I think being close to a larger city means probably a more sophisticated suburban population (I don't think I'd ever met anyone who'd been to an Ivy-ish school prior to college) and larger schools, which allows for more stratified educational tracks.
No sour grapes, that's just the way it is.
I'm skeptical this is a problem. There are some FANTASTIC public universities (many people choose to go to out of state).
> "By the time most kids learn how the culture works, it's too late, they're already in whatever college and life track they happened to fall into."
There's absolutely nothing wrong with choosing to go to a public university. Many of us decided to attend one instead of private ones.
However, there's a big difference between divorced parents and 10 siblings, and a situation in which I grew up: one sibling, married parents, lower middle class income, but my father had a ton of school loans. The result was that my family income was high enough that I qualified for reduced tuition at most private schools, but nowhere near enough reduction to make most schools viable. Cost was literally the only factor I was able to consider in my choice of school, and even having chosen the school which offered me the best financial aid, I was unable to complete school due to cost.
The fact is, the cost of education has risen to the point that higher education isn't available even to people in the middle class.
$125K/year family income reaches well into the middle class. I would have paid nothing to go to Stanford, and in fact I still would pay nothing to go to Stanford. I may actually apply and try to finish my degree. :)
Working at a thrift store full time making minimum wage and going to engineering school full time for the first two years, then doing tech support full time and going to engineering school full time for the last two years was no joke, and I still have debt remaining, two years out of school with a good job.
Why should it be the parents' income that anyone cares about?
Students are expected to contribute? Don't make me laugh. It's their education, they are of majority age, they likely will be paying for it and then some. How are PARENTS expected to contribute at all? Mine honestly did not and do not make enough money to have any left over after taking care of my two younger siblings (ten years younger), and yet on the FAFSA right there, an "expected family contribution".
Edit: they do, of course, make enough money combined that the government expects that they'd want to send their kid to college and could theoretically contribute something to it. They did what they could, but that wasn't what fulfilled expectations laid down by the Powers That Be.
Co-signing is taking on the financial obligation.
He could not, and does not to this day, have the money to pay down those loans (which I am currently paying down). However, he did have one thing he could offer: a reasonable credit history.
Essentially he lent me credibility. (And then told me nobody would ever find the body if I didn't pay down my debt.)
Think of your stepdad's stance as tough love and motivation.
Why did Willie Sutton rob banks?
This is a good case in point. According to the article families who make less than $125,000 pay nothing and those who make $225,000 or more pay the full amount, listed as $65,000. Now let's take the hypothetical family where one parent makes $125,000 and the other makes $100,000 and look at what happens. If the second parent keeps his or her job, this is where the $100,000 salary goes:
28% federal income tax ($28,000)
9.3% California state income tax ($9,300)
Stanford annual cost ($65,000)
Total: ($102,300)
It seems like this can't possibly have been the intended outcome.
The right way to fund things like this is to give the same dollar amount to everyone but collect the same percentage from everyone. The rich still pay their share because a percentage of $20K/year is naturally much less money than the same percentage of $20M/year, but you discontinue the wanton destruction of the middle class, and as a happy consequence you also eliminate a lot of waste and frustration because if you give everyone the same benefits unconditionally then you don't need an invasive means testing bureaucracy.
The basic income + flat tax system is ethically superior but politically impossible. What's worse is we're still actively going in the other direction, to more progressive taxes and more regressive subsidies.
Nope. Those families pay no tuition, but still may pay living expenses. The 'pay nothing' tier starts at $65,000
That doesn't actually make anything better. You're attempting to address the perverse incentive for one of the parents in the family making $225,000 to quit their job by pointing to a higher burden on the families making between $65,000 and $125,000, implying that it's less desirable to become one of those families. But the incentive is still there whether it preposterously exceeds 100% or only approaches it, and reducing it by making the burden on even less affluent middle class families worse can't possibly be the right solution.
Your calculation assumes a family could deliberately reduce their income by $100,000 in order to save $65,000 on their Stanford term bill, resulting in a (net gain of $2,300) but this is not correct. The savings are more like $45,000 (the cost of tuition).
But there are many, many things I didn't account for. The point was not to make a full accounting, the point was to present a back of the envelope calculation demonstrating what can hypothetically happen when programs are structured this way. If you want better researched numbers I encourage you to read this:
http://johnhcochrane.blogspot.com/2012/11/taxes-and-cliffs.h...
Those numbers also point out something else somewhat misleading about my example -- although it is possible (particularly with regard to education programs) for the upper middle class to be ravaged by excessive marginal tax rates, those most hard hit by means tested programs are really the working poor. Have a look in the first graph at the marginal rate on someone making minimum wage.
I'm not making any other claims about the merits of progressive taxation, price discrimination by universities, or economic policies affecting the working class. I'm just pointing out your error so that other readers don't rely on your calculations.
From the fine article:
"Stanford will expect no parental contribution toward tuition [~$45K for 2015-6] from parents with annual incomes below $125,000.... And there will be zero parental contribution toward tuition, room or board [~$65K for 2015-6] for parents with annual incomes below $65,000"
28% federal income tax ($28,000)
9.3% California state income tax ($9,300)
Reduced Stanford FinAid ($45,000)
Total: ($82,300)
There is a realistic hypothetical family that loses more than they make in total regardless of whether the loss of Stanford financial aid is $65,000 or $45,000.
"In either case, students will still be expected to contribute toward their own educational expenses from summer income, savings and part-time work during the school year. Students are expected to contribute at least $5,000 per year from these sources but are not expected to borrow to make the contribution."
So its really $5K/yr even at $60K/yr and below, despite the glorious headlines. Its quite a downer to start with a fantastic headline and realize its all BS, although the truth of the matter is a pretty good deal. The article should have been more honest. Under promise and over deliver, as opposed to the opposite provided.
Was comparing this to my own state school numbers from 20+ years ago. One year was < $5k. Min wage at $3. One could work a summer job (or two) and pay for a year of school. That just doesn't seem possible any more, or at least not without a lot of assistance programs.
The other part of this is the inherent infairness of someone paying $65000 per year for Stanford. That's just insane. The price of something should not change based on someone's income. Why should someone making $225k per forced to subsidize everyone else? If the lower income kids want a BMW, should higher income families be required to pay for it? Going to Stanford isn't a right; it's a luxury.
Tuition, like tax rates should be the same for everyone. As it is now, the market responsiveness of higher education costs is distorted because of this cross subsidization scheme. If we eliminated all financial aid, Stanford would cost $8000 per. As it is now, universities have zero incentives to cut costs because many of them face no exposure to actual market forces. Whatever extra they want, they know students will just go deeper into debt.
It's a scam. How many Vice Provosts and Assistant Deans or "coordinators for diversity" does a university actually need? They could likely cut half of university administrators and it would make no appreciable difference to the quality of education.
Now turn your perspective around. How fair is the distribution of educational opportunity and, especially, networking opportunity with powerful people?
Progressive taxes don't do my income any good. But I wouldn't be in the position I am today without them; I grew up poor, too poor to own a family computer, never mind a family car. I still resent the lack of information I had about educational opportunities. And more than anything, I wonder what we could achieve if the impoverished of the world didn't need to scratch out subsistence living, and could instead apply themselves to the limits of their ability.
It's exactly the intended outcome. Progressive taxes and regressive subsidies are designed specifically to disincentivize earning income. To think these policies are implemented without actually thinking about both sides of the coin would take Hanlon's razor to the extreme.
As more people stop to actually do the math, and realized the mind-boggling treadmill that is the middle-class, not surprisingly the middle class shrinks.
The only reason keeping many in the game while they have school-aged children is some professions don't lend themselves to just taking 5 years off. But some lend themselves surprisingly well to that, and frankly I don't see an ethical dilemma in not working if the work has negative expected benefit.
I just assume that I will pay for my kids' undergrad. It's the norm where I live.
How do you imagine you're going to be able to even as a likely relatively well-paid individual, if tuition rates keep climbing?
My wife and I currently pay about $25000 / year for daycare for two kids. Can't save too long for daycare, but can for Uni. We have minimal debt, and the house will be paid off by the time the kids go to University.
EDIT> Daycare is as expensive as University. I did not anticipate this.
This seems rather steep and definitely not the norm at Canadian universities. Take a look for example at UBC [1]. It's about 2-3 more than the actual number for most programs for domestic students. And also rather low for international students. It's similar for U of T [2] and McGill [3].
> $25000/year for daycare for two kids
Wow more than a 1000 dollars per kid? That's quite a bit. Is that typical?
[1]: http://students.ubc.ca/enrolment/finances/tuition/undergradu... [2]: http://www.adm.utoronto.ca/cost-of-university/ [3]: http://www.mcgill.ca/student-accounts/tuition-charges/fallwi...
EDIT> And Waterloo (see CS and Systems Engineering): https://uwaterloo.ca/find-out-more/financing/fees
I was referring to top engineering programs that are competitive with top US engineering and CS schools.
EDIT2> I doubt that the daycare rate is typical, in general, but it's typical for the area of Toronto that we live in. Overall, though, daycare is very expensive.
It's cheap.
We pay 700 EUR/month for 2 days/week daycare for one child here in The Netherlands.
So in my situation, I'm just above the threshold and have 1 child; so am lucky enough to have almost no subsidy whilst still paying extra tax for the privilege. Double dipping.
Luckily for the government here I can't vote (British citizen), and I'm a compassionate capitalist so generally agree with the idea of spreading wealth around (we just do a horrible job at taxing capital gains and inheritance; I'd happily pay progressive 70-99% on the top of my net-worth if the tax was applied consistently, fairly and accounted for income over time in a fair way (so taxes are normalized over years; for sports people and the like))........
I'd chalk it up to "cost of living" differences, but I'd say there is a whole lot more to it. Certifications, licenses, insurance, minimum wages. All these things affect the price, so we can't entirely compare the prices as apples to apples.
If I was to live there I'd pay much more in healthcare, but housing, childcare and laborer is really cheap.
(source: family who live there).
In the era of massive student debt it makes no sense to cripple your children (and therefore your family) financially, if you can afford not to. Especially not to prove a point that can be learned any number of other ways.
In this era, I believe that "don't go into debt (unless you can afford to service it)" is a much more useful lesson.
As far as I'm concerned, my children's job is to learn, and to figure out how to excel. That requires time and breathing room. If they look like they're turning into dilettantes, then of course I can decide not to pay for things. I just wouldn't prematurely handicap them (and myself) financially if I didn't have to.
EDIT> Basically, I object to your casting this in moralistic terms. Of course, we all know people who don't know the value of money. You'd be surprised at how often these are poor or uneducated people, though. If anything, having wealthy parents gives you more chances to learn how to deploy money intelligently.
The other responses say, "Because it's expected." That doesn't answer the question. Have attitudes shifted? As education's become more expensive, I wouldn't be surprised if colleges have marketed the idea that good parents pay for their adult child's education, in order to make sure that they have business as they jack up prices.
You shouldn't have to settle for shitty jobs in school, and focus on schoolwork is overrated. I honed graphic design, salesmanship, and web design skills from the three I had. The last actually was a distraction from school, but then "web" became a paying job for me when it wasn't in the school curriculum. The constraint of needing to work created a bunch of opportunities.
I mowed lawns, washed dishes, and worked retail before finding internships. But you know what? I still have more built in advantages than kids on need based scholarships. I'm luck my parents raised me well enough to get into good schools.
Universities raise the price of tuition, then increase financial aid for the subset of students who can't pay the increase. Incremental revenue for the university still goes up as they get more revenue from anyone who can reasonably afford the increased "base tuition" amount.
There may indeed be grotesque stratification problems with the system but that doesn't mean some part may do the right thing occasionally. Frequently even monopolies moderate their behavior out of fear of regulation. Here perhaps schools fear the reputation hit of graduating too high a percentage of rich dimwits.
Also, I actually think an intelligent monopoly might set their lowest price to 0 (for those who couldn't pay anything). It protects their market domination.
As it is today, the easiest way for universities to increase funding is through tuition increase and they've been using that method more in recent decades.
But I wonder if universities should offer some sort of deferred payment (5 years after graduation for instance) to students instead (not a 3rd party loan). If you go to Stanford you are pretty much guaranteed a stable income when you graduate. Yes ,granted, a lot of alumni do donate without feeling the necessity to do so, but having such an option will help universities, perhaps more for those with smaller endowments "recover" some of the cost.
Universities could always make exceptions some time down the line on a case by case basis, depending on student's current income which will vary violently even for top universities, with some students deciding to work for a non-profit while others choosing a more lucrative job, just like income tax works.
Again, I am really not sure, just throwing it out there.
You should pay it forward. It worked for you, help make it work for someone else.
But in the meantime I am trying in my own little way, by advising current students, interviewing applicants and also coaching students back home in similar position as I was by helping them with their applications and SATs
That's what I saw when I visited more privileged friends at Universities, anyway.
I'd really rather give money directly to someone that needs it than to a dysfunctional organization (and they are pretty much all dysfunctional). I wish that was actually feasible.
It is a sort of post hoc means testing, in contrast to the more usual undergraduate system of pre hoc means testing.
The federal government also has income based loan forgiveness programs (the current one is called Pay as You Earn), but it is far less generous.
http://hls.harvard.edu/dept/sfs/low-income-protection-plan-l...
Rather than all the crazy games, I'd prefer if education were genuinely market priced, or if individuals could take reasonable debt loads or sign indenture agreements. A commercial organization should be allowed to do something like ROTC; paying an undergrad full college costs in exchange for a guaranteed employee for 2-4y post graduation at market rate.
Seriously, pretty much the only field right now with a serious demand > supply condition is nursing, and MDs willing to do general family practice rather than higher-paying specialties.
If they had this program they would probably prefer Waterloo coop style students; get them for 2y out of 6y while in school, and then after.
Loan guarantees would probably be the most sane commercial way to do this. You are on the hook, but iff you join, we pay off your loans, and creditors could then reflect that in creditworthiness decisions.
I'm fairly certain they can. In fact, tuition reimbursement programs aren't uncommon amongst elite employers.
These things do exist, and higher education is not solely in the realm of government or colleges' doing. All it takes is for some sparky individual/group to implement it if the need is there. That is why it is very important to let the market price things using regular signals, instead of distorting it with government intervention.
What I mean is that currently there is a big shortage here for good software developers. So companies are willing to spend money on training up, paying college fees, whatever it takes.
On a side note. People are very wary of things such as "indenture agreements". It reminds them of slavery too much (I would hypothesize), as it seems they've conflated historically indentured workers with defacto slaves, despite consent.
Check out the SMART fellowship
The oligarchs, of course, don't care who much college costs be it 0$K, $100K or $200K year. Any at cost basis, it just doesn't make a dent in their wallet.
Down with the oligarchs!
it looks like getting divorced, or one couple quitting job before kids are going to apply for college, or having unlimited kids, are the right strategies for the best colleges application than otherwise. I actually know one family did just that, the college-educated mid-age mom quit her job so her daughter got all the financial support from Harvard, and she is walking her dog on the community daily to stay fit now(instead of working). I am not sure if she will be back to work after 4 years when her kid graduates.
Basically, the more screwed your (family) situation is, the more helps are there for you for free, even for the most prestigious universities admission! only the sky is the limit.
I very much doubt the veracity of this broad generalisation.
Indeed I'd be most surprised if there was any correlation between hard work and socioeconomic status, given that there are such a wide range of employment roles (including self-employed) in which one can work very hard, yet with such diverse financial rewards.
If it's really that onerous, take a pay cut and enjoy a drop to the MMC or LMC. Or join the working class. They don't pay much (individually) in the way of taxes, so apparently they're not screwed much. Life would be pretty sweet there!
http://www.heritage.org/federalbudget/top10-percent-income-e...
This chart summarizes decades of numbers pretty well:
http://static4.businessinsider.com/image/5033e3e3ecad0494170...
... it's from this article, which gives lots more detail:
But I'm also a little sad about the way this is playing out, because the net effect is to set the top private universities even further apart from the many great universities that nonetheless can't afford policies like this. There's already so much pressure on a lot of kids to get into a top private university, and now many of them are in a position where if they don't get into one of the top four, their only option is a public school. (And yes, there exist public schools, such as Cal, which one can argue deserve to be mentioned in the same sentence as H/P/Y/S, but certainly there isn't a UC Berkeley in every state, and going to a public school out of state can be as expensive as going to a private school.)
If you really want to be sad, take a look at how short is the list of schools with need-blind admission that claim to meet all demonstrated need:
http://en.wikipedia.org/wiki/Need-blind_admission#U.S._insti...
This is a supremely low bar, because schools get to define how much you need; there's no standard for this. And of course schools can meet your need with loans. But even still, the schools on this list are the only ones in the country which even claim to be meritocratic in their admission of US applicants.
This doesn't hit the rich, it hits the middle earner and it hits them extremely hard. It's frankly pathetic but I suppose what can you expect in an era of hard pressed populist socialism.
For San Mateo it's 87,633.
For Santa Clara it's 89,064.
"Families with incomes at higher levels, typically up to $225,000, may also qualify for financial assistance, especially if more than one family member is enrolled in college. Financial aid offers vary by family, but the financial aid expansion for 2015-16 will allow Stanford to reduce the expected parental contribution for many families at these higher income levels."
Still, I can't complain. I wouldn't trade my Stanford experience for anything. And for what it's worth, it would have actually cost me more to go to Berkeley as the aid package there wasn't nearly as generous.
EDIT: Just for kicks, here are some emails here that demonstrate the reality of Stanford financial aid at the master's level.
Last quarter:
Nov. 17th: Hold on registration due to account balance... Nov. 18th: This is a friendly reminder that you have unpaid charges on your account... [PAYS $10,000 of tuition]
This quarter:
Feb. 16th: Your Stanford student account has been placed on hold* due to an outstanding balance... Feb. 17th: This is a friendly reminder that you have unpaid charges on your account... Mar. 18th: Student Account Notice... Today: We are sorry to inform you that you are not currently eligible to participate in the StanfordCardPlan...due to financial hold. [PAYS $5,000 of tuition]
This cycle has gone on for the past year now. For some context, I take two classes per quarter and live on-campus (on-campus housing is the cheapest you can get in Palo Alto). My total tuition + housing is $15,562 per quarter.
Masters students are customers buying an extra year or two of education.
The Fed gov gives unlimited loan money to anyone for grad school.
And why should they subsidize a degree that is supposed to put into a high paying job. Even if you were poor, you won't be after.
Having been in that exact situation before, I wouldn't complain too specifically about Stanford's master in CS. That department makes it really easy to get a TA/RA (I'm comparing with my friends in less trendy fields of study), and while they represent a non-negligible amount of work, I think they are perfectly manageable at the graduate level. So while it's not financial aid, it actually makes it possible to go through the whole program with a positive net balance. Now I understand that the absence of guaranteed funding can feel scary for many, although the current state of the job market should greatly reduce their fears.
Not saying that being a TA is by any means "easy," but come on. Complaining about having to work while being at one of the greatest universities in the world is a bit whiny, is it not?
You don't have to go to graduate school. It's a choice. If you want to be a career academic, you're grinding it out now for what could be a cushy life.
It's great that children from lower income families are getting subsidized, but with these kinds of policies there's always a hard cutoff point, and the people just above that cutoff point are the ones who get screwed.
Money shouldn't be in education period. If whether or not you can study is even partly determined by the finances of your parents, then the system is wrong.
Is Stanford that powerful of a brand?
Part 1 is quickly becoming a commodity for many study topics that are available online, for free or close to it, so it's hard to justify a $200k price tag for something you can teach yourself.
Part 2 is much more difficult to supplant with alternative education. The people I've met while at Stanford have been invaluable to me in starting my career, and I don't even consider myself great at networking. There's just such a huge brain trust there it's hard to even question the value of being there. I'm sure the same can be said of the top 20 schools, however that probably quickly drops off past that.
As a thought-experiment, imagine going down the hallway at a large company, talking to all of the new entry level recruits, and trying to guess which ones went to college and which ones studied at home, just from their behavior. Now guess which ones will move up the ladder and which ones won't.
If colleges are driven out of business, affluent parents will find other ways to provide their kids with those extras, poor kids won't know why their online education hasn't made them employable, and we'll just be back to the same disparities as before.
I'm obviously pushing a particular agenda here, but I think it's worth considering.
I don't know that that doesn't happen at real schools too though
while I'm sure college works as a smoothing function
but it seems to me that certain (almost always UMC) kids show up and immediately get what the valuable connections to make at the school are
they get what sorts of fraternities are worth trying to get into, what sort of extracirricular activities are likely to prove valuable in the future, what sort of internships are worth angling for, that sort of thing
while alot of the less clued in students sort of fumble around almost at random
it strikes me that the degree of clued in'ness' usually breaks down along class lines
(this might be more of a finance, politics, business thing than a tech thing)
> In either case, students will still be expected to contribute toward their own educational expenses from summer income, savings and part-time work during the school year. Students are expected to contribute at least $5,000 per year from these sources but are not expected to borrow to make the contribution.
15 weeks / semester * 2 semesters = 30 weeks. $5000 / 30 weeks = $166 / week. At $8 an hour, that's 20 hours a week; at $10 an hour it's 16 hours. (Ignoring taxes, which are low but still push the hours needed higher.)
This is not accounting for summer jobs, but my original point was that having the student contribution at that level will make some students take a paying but dead-end summer job over an unpaid internship or other opportunity that would benefit them more in the long run. (Another reason unpaid internships are questionable ethically...)
And there are plenty of off-campus jobs (SAT tutoring, etc) that can pay $35+/hr.
The takeaway is, maxing out retirement accounts like a 401k and dumping savings into paying off the primary residence mortgage are ways to accumulate net worth without accumulating "above-typical" assets.
http://financialaid.stanford.edu/site/faq/index.html#faq_20 ===========
What do you mean by "typical assets"?
For applicants who report total annual parent income up to $125,000, we generally consider "typical assets" to be an adjusted total net worth of less than $300,000. Adjusted total net worth usually reflects the sum of the following amounts:
Cash, savings, checking Investments Home equity, capped at 1.2 times annual income Equity in real estate other than the home Business net worth
We do not include formal retirement assets (401k, 403b, IRA, Keogh) in our analysis.
> Stanford has long been committed to need-blind admissions for U.S. students, supported by a financial aid program that meets the demonstrated financial need of all admitted undergraduate students.
I looked into going to a US university when I was finishing high school in Brazil but the reality is that even with aid packages and all of the assistance you can get, the process involves a significant chunk of money being spent on paperwork (official translations of dozens and dozens of documents are expensive, US visas are expensive, intl travel is expensive, the standardized English exam is expensive, etc.).
A free ride to Stanford for me when I was going into college 3 years ago would have put my family in debt. Today I know that I could've remedied that with a single internship in the US, but back then all of the costs intimidated me and I gave up.
The incentive is the American dream. Starting from nothing and making it to the top. I'm sad that you're offended by that.
Consider two families. One makes $100k/year and has $750k saved. They drive modest cars, live in a modest home, take modest vacations and drive their kid across town every day to the public (free to them) magnet school. The other family lives very well, has nothing saved, a house that they can't afford, and debt from paying for private school. Which one should get the free ride at Stanford? Which one will?
With real interest rates below zero and a bailout culture, which family is living the modern version of the American dream?
What about the family that makes 126,000 who pays tuition and is now in a much worse position that a 124,000 family.
I just wish there would have been SOME kind of retroactive forgiveness for those of us who were well below the family income threshold but were born just a couple years too soon. Don't get me wrong, I understood the implications of taking out huge loans and I'm doing pretty well now (finally making progress on the loans) - but it kills me to think I could have had the same education without the crushing debt.
[1]http://colleges.usnews.rankingsandreviews.com/best-colleges/...
It's to protect against people who have a million dollars in assets but make "only" $100,000 a year.
Wealthy individuals have greater spending flexibility and access to things like trusts, asset relocation to no-tax locations, deductions, etc.
In '09, 35K households with income over $200K reported 0 tax liability [1].
[1]http://www.businessinsider.com/some-of-the-wealthiest-pay-no...
Right?
[1]http://www.forbes.com/sites/beltway/2013/09/05/how-some-high...
1) Earn most of your income in a foreign country so you pay taxes there instead of the US.
2) Earn most your income from tax exempt bonds.
Anyone can do this. You don't need a fancy accountant. Just either:
1) Move to a foreign country and get a job there.
2) Buy a bunch of tax exempt bonds.
These aren't people with high paying jobs somehow magically not paying taxes on them. So, like I said: "largely a myth".
You seem to be getting hung up on whether there's anything "novel" about a subset of tax avoidance schemes and not mentioning trusts or other tax schemes disproportionately used by wealthy individuals such as offsetting income with high medical costs or moving assets to lower-tax jurisdictions.
FWIW, the IRS study in the article referenced breaks down these expenses for folks without worldwide income.
They also won't actually save you any money. With the former you'll just be paying taxes to a foreign government instead. With the latter you'll get a lower rate of return than you would for buying other bonds.
I didn't mention "trusts or other tax schemes" because the Forbes article you linked to didn't mention them. It didn't mention them because those aren't actually ways to get out of paying taxes. That is, as I said upthread, largely a myth.
You bring up medical costs so I'll touch on those as well. People don't get sick or injured and pay lots of money for medical treatment to avoid paying taxes. Certainly one can debate whether such expenses should result in a tax reduction but we, as a country, have currently decided that they have in most cases. Again this doesn't constitute "accounting games." They are, again, very straightforward deductions available to all. Keep in mind though that you do have to spend the money on medical care instead of taxes though. So you won't have saved any actual money to spend out a house or a new iPad or whatever.
In reality, things are actually fairly straight forward when it comes to our taxes and most of the time if you're earning money you're paying taxes. If you aren't, it's generally for a pretty good reason.
Also, there are restrictions on how you carry forward losses and how much you can deduct in later years.
edit: I think the issue is you're being nuanced about the connotations of "accounting games" (I mention this downthread and argee that some tactics are straightforward.) the user [tiler] above, responded as if the recession explains how 35K people with $200K+ income had 0 tax liability, which is silly.
All of which is to say that the college might think you can pay a lot because you have a lot of income, or because you have a lot of assets.
What counts as "assets" varies also. Obviously things like bank accounts and stock investments are included, though retirement accounts are typically excluded. Home equity for the primary residence is included by many private colleges but not by the FAFSA's methodology (which is used by most public colleges, as I understand).
So yes, this can be a massive caveat. Stanford does consider home equity as part of your assets, so if you have a fully paid off house they may effectively assume that you will take out home equity loans or a mortgage on it to help pay for the college education.
Of course it's not that common for families with income of < 125k who have college-age kids to have a fully paid off expensive house. So in practice for many people this is not an issue. But there are absolutely people who are asset-rich and income-poor (think retirees!) for whom the fact that all this stuff is not purely income-based makes a huge difference.
(not a personal attack, just an observation - usually lots of 'grass is greener' talk in this sort of threads, but still urban centers grow at the expense of so-called 'low CoL areas')
Another thing I like about this is the "only contribute $5000 a year" part (especially if it does expand to adults) - that means if you've built a small personal safety net, you won't have to watch it all go up in smoke instantly. That adds a margin of safety you don't get right now.
Of course, one of the problems is that the selection based on money is very different from selection based on school grades, and the whole sport story is set to play again with Saudi students.
on one hand this is good in that they are recognizing that debt burdens are a real hinderence to their graduates
on the other hand, this is used to pitch the line that 65K tuition is no big deal
which you're in line for at the full rate at combined 225K income
look, I get that in modern internet culture, no sypathy is supposed to be shown to people with household income over 200K, but that is still really alot
its also not at all obvious that the return on any investment of 200K for education is worthwhile
I'll just link to: http://www.nber.org/papers/w17159
http://www.brookings.edu/research/articles/2004/10/education....
http://www.brookings.edu/research/articles/2004/10/education....
for the general case against
also even if it does pay off, you have to work like a dog to make it pay off, its not a passive investment
if you're buying a website on flippa, the degree to which your investment is passive or active factors pretty heavily into the price,
it should be the same for colleges
(I'd also love to see a breakdown of exactly how much of Stanfords admitted class comes form < 125K parent income, between 125K and 225K parent income, and > 225K parent income)
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also, I have a problem with the meme that elite colleges are now cheaper than state colleges
I get that merit scholarship vary by college, but students qualified enough to get into Stanford or Harvard will almost certainly qualify for full merit scholarships at most if not all state schools
(maybe not at Cal or UCLA, but almost certainly at UCSB or UCD or San Jose State or Fresno State)
that meme should stop
Is there no bank that will let you take out these loans? isn't it possible to take out a combination of federal and private loans to cover the cost?
Disclaimer: I was fortunate enough to go to a top university and pay nothing for tuition and housing.
7,018 undergraduates [1]
9,118 graduates [1]
2,118 faculty [1]
2,872 clerical [2]
So, when I got my rejection letter, I replied with "I reject this rejection" like in the Snopes story.
Then went to talk to the admissions folks, who thought that I had literally hopped on a plane and flew half the planet just to make good on a joke (I was already in the US for work actually).
Ended up working with a Stanford prof for a semester, after which I decided I was done with academia.
Even if the expected contribution for a family with $130k is very small, it would be tempting to fudge the number and put that tuition money towards other expenses.
Even this 125k threshold assumes a 5k student contribution and doesn't cover the mandatory 15k in room + board for incoming freshmen. It's great PR, though, and still, props to them.
at my (private) school the ONLY way to get into an ivy league (no matter how high your grades were) was to get a letter from the teacher with the connection to Harvard ... or the (other) teacher with the connection to Stanford ... or the (other) teacher with the connection to Yale
students even decided early on which courses to take so that they would have exposure to these teachers early on
So what countries are that?
$125,000 is just the lower bound where transition is 0.
source: http://www.mercurynews.com/health/ci_27799963/stanford-unive...
That's why you get non-profits with million dollar CEO salaries- its they only way to funnel money out.