How to get a massive discount on college: get married | Hacker News Reader

How to get a massive discount on college: get married

jefftk.com

69 pointsjefftk72 comments

Just imagine all the possible hilarious dialogs if you do that, and then meet somebody you actually love andwant to marry. "Technically, I need to divorce first" -- "technically?" :-)

I submitted my 2015-2016 FASFA yesterday. They estimated that my Expected Family Contribution (just me now that I'm 25) was $17,900 based on the $57,000 of taxable income I reported last year. The problem is that the income was from SF and they have no mechanism for adjusting for cost of living. They did ask me how much cash I had in the bank and how much I had in assets, but it didn't seem to affect their estimate. I haven't received the official response yet.

They are saying compared to being an dependent on your parents taxes, you are better off being married.

The real alternative is to file as independent. I would want to know if there is still a discount to getting married compared to filing as independent.

I've wondered whether I could emancipate my kid to achieve the same effect. If you only have to file your own taxes, that'd make sense. Doesn't make sense to me that a legal adult's parents are roped into the equation.

They have to become emancipated before they turn 18, and you can only do that voluntarily in some states.

Isn't the issue is financial aid, not taxation? They are not the same notions of 'dependent'. EG you can be off US tax forms and still have your parent's assets/income disqualify you for finacial aid (ie, large monetary discounts on tuition a/k/a handouts etc).

Fair or not, for financial aid purposes, the student cannot just decide to become independent from their parents in the common scenario. They won't buy it. Also, I imagine everybody would do it if it were that simple.

Filing as an independent doesn't help. I had a friend who was in all ways independent (was basically disowned by her parents) and she couldn't qualify for any FAFSA based aid because she was still required to disclose her parents assets, and her parents refused to sign the forms to do so.

How old does someone have to be before they're automatically independent?

So can you just wait until you're 24 before signing up for college and get lots of subsidies?

Tons of high-school graduates in Australia get a job for a year after highschool, that way you will earn over a threshold amount in a year (I think it was $15k when I did it) and be declared independent from your parents.

Then when you go to university, you qualify for Youth Allowance and get paid to go, as I did. It was something like ~$450/week IIRC.

Yeah - http://www.humanservices.gov.au/customer/enablers/centrelink...

This is the biggest problem for many kids. The system assumes parents are willing to pay a "fair share", when many are absolutely not, for any number of reasons. Those kids are penalized and it is completely unfair.

Story of my life right now.

This was worse than that: her parent's weren't particularly rich, but she wasn't available for any FAFSA aid, since her parents refused to sign the disclosure forms.

Marriage is a way to qualify as independent on the FAFSA. There are several ways - military service, certain legal emancipation situations, being a ward of the state, and being over 24. Marriage is the way that is least difficult to achieve.

Aging to the age of 24 is also comparatively easy to achieve. :-)

It is, but it stunts educational progress by 5-6 years.

It stunts credential obtaining progress, more accurately. They're two independent phases.

Yes, I think overall it might even be better for education. Tons of 18-year-old college students have no idea what they want out of college or how to achieve it. That might also be true of 24-year-olds, but I would guess a larger % by that point have a better idea why they are attending college, what they want to study, and how to study it.

Don't forget to choose someone sane, stable, and who has no element of vindictiveness to them. Marrying someone means you are legally bound to them - you get to share responsibility for their debts, and they get to make medical decisions for you.

This marrying trick would probably work for most people, but it has the potential to fail explosively.

> they get to make medical decisions for you

At least in MA you can fill out healthcare proxy forms [1] to shift this back to your parents.

[1] https://en.wikipedia.org/wiki/Health_care_proxy

Now that same-sex marriage is legal, would that work if two heterosexual people technically marry each other? At least then you don't run the risk of the other party deciding they like this marriage thing and having a very complicated and uncomfortable time trying to disentangle yourself from them.

Sure, same as it works if a gay guy and lesbian woman get married for legal reasons now.

Wouldn't this be the case for similarly fake, different-sex marriages? And wouldn't this be the case before for civil partnerships anyway?

I'm so tired of the financial benefits that a) married couples, and b) parents, receive. Being married or having children should provide exactly zero financial benefit from governments beyond what bachelors/bachelorettes receive. It makes absolutely no sense that simply hitching yourself to another person or reproducing magically means you get government handouts. Neither of these situations provide substantial benefit to society deserving of special treatment. The discrimination against those of us who remain single is just mind-blowing.

Every adult should have the same government-mandated financial burden and reimbursement cheques in the mail. Why shacking up or pumping out kids gives the adults involved an advantage in their financial livelihoods is ridiculous. :(

Married couples have different tax treatments because of community property rules, and because the unit of taxation is the household, rather than the earner. It would be rather regressive to tax a two-person household each earning $25k/yr at the same rate as a single individual making $50k/yr, despite the fact that household income is the same. The intent of the different treatment of married-filing-jointly returns is to attempt to balance the tax paid by married couples so that it's roughly in line with the taxes that would be paid by individuals filing separately. This may result in tax benefits or penalties depending on the earnings status of each of the spouses, but it's hardly an across-the-board. "Tax divorces" are a thing; high-income couples may find it financially advantageous to divorce (even if they continue to live together as a de facto married couple).

As far as kids being an "advantage in their financial livelihoods"...well, yeah, that's just hilarious. Kids are expensive. Tax breaks for kids are a progressive measure intended to make it slightly easier to afford to provide for one if you're in the lower echelons of the economy. If you think that anyone is having kids because of the financial advantages they convey, you're high.

Regarding the article, the "financial benefit" isn't from being married, it's from not being a dependent of your parents. There's no married person favoritism at play here; it's simple dependent eligibility status. You can achieve the same thing by being 24 years old, or by being legally emancipated.

> It would be rather regressive to tax a two-person household each earning $25k/yr at the same rate as a single individual making $50k/yr, despite the fact that household income is the same.

Two individual people earning $25k should pay a lower rate of tax than one individual earning $50k, yes.

But a marriage-based tax break is not the right way to implement this. Tax them individually, just like everyone else, with a progressive tax.

The married couple already have significant financial advantages over the single person: the financial security that comes from having two incomes (or even from having one person managing the household, if that's what you're imagining) is huge.

But historically, two income households have not been common. This is a recent (past two generations) turn of events. I agree that a marriage-based tax break may not have been sensible, although now with gay marriage legal nationwide, as long as the government also recognizes civil unions, it may be ok and solve the part of the problem you note.

Dual-income families have been the norm for 40 years now, out of the 100 years that the modern income tax has even existed.

Two people making $25k/yr should be individually paying the taxes on their own $25k. There should be no ability to transfer tax burden between partners. An adult makes $25k, that adult pays the taxes due on $25k. It's not a difficult concept, and puts everyone in the same position, partner or not.

Participating in large-scale population growth planning provides a substantial benefit to society.

> Neither of these situations provide substantial benefit to society deserving of special treatment.

Are you kidding? You've heard of the national debt? Who, do you suppose, is going to pay for that? Nations need children. Lots of children.

And children are stupidly, ridiculously expensive. In a bygone era, children were assets. Now from even before birth, having a child is just about the most expensive financial decision you could possibly make. And taxes, like college, are priced progressively. As a society we generally want our families to be able to feed and clothe their children, so the taxes those adults can afford to pay while doing that are necessarily lower.

It can be a serious problem. Japan is facing extreme financial hardships in the future due to a rapidly and severely declining birth rate. They're doing all they can to get people reproducing.

http://www.ibtimes.com/japan-encourages-young-people-date-ma...

If it makes you feel better, most of those financial benefits disappear once you cross a certain income threshold, as I so unexpectedly found out post-marriage.

The post/article to not describing some enhanced subsidy or discount that a married person gets, it is about how a take advantage of how a student's ability to pay is determined.

If a student is single, both them and their parent's income is considered because the student is a dependent. If the student marries, only their and the their spouse's income is counted.

>Why shacking up or pumping out kids gives the adults involved an advantage in their financial livelihoods is ridiculous

short answer: because without kids society (and so government) dies. It's becoming more and more expensive to raise them (at least in the western world).

In my opinion in most of Europe these benefits are not enough as it's one of the most important contribution to society an individual can give (I'm not a parent and I won't become one in the near future).

Do you have stock in any company or work in a startup? If so, parents provide you a huge benefit. How much money is there in the advertising fueled-web when the current batch of 18-35 year olds isn't replaced by a fresh batch? The assumption of at least stable population is absolutely prices into all of the deals you read about on HN.

And increasingly, married people pay a penalty for that, at least in the U.S. tax code. My wife and I would save a bunch of money if we got divorced.

Why not get legally divorced (but not socially)? As long as you don't get married again it looks like that's not fraud by the IRS. Page 23 of http://www.jefftk.com/abrams2012.pdf has:

"Although the IRS attempted to use Boyter in several subsequent cases that dealt with divorces allegedly entered into to lessen tax liability, courts have sided with the IRS only in cases where the couple remarried after the taxincentivized divorce. In cases where the couple remains divorced, the sham transaction rationale is not available. For example, in U.S. v. Taylor, the government sought to satisfy a tax lien against a man by going after his pension plan—90 percent of which was transferred to his ex-wife in their divorce proceedings—by contending that the man had obtained a sham divorce in order to shield his assets.115 The court distinguished Boyter, noting that while the couple remarried in that case, in the present situation the couple remained divorced.116 Thus, the test that appears to operate in the tax context is a “divorce-plus” test: we know that a divorce is fraudulent if it is followed by the “plus” of remarriage."

I don't want to pay less taxes. I have a philosophical objection to unmarried couples paying less than married couples with the same income. Paying less myself doesn't fix that.

As the cultural and social power and significance of the institution of marriage starts to wear off, more people will start abusing it for the benefits. A lot already are -- my friend was telling of a guy who divorced his wife in the papers purely to get tax benefits, even though they're still together as man and wife.

Also conversely, another mate of mine was suggesting in complete seriousness to another friend of his that they should get married to get nice affordable housing benefits; both male (I mention they're both male because I think if the friends were male-female, social stigma would be stronger, but because they are old buddies from high school, this subject was discussed in a "hacking the system" mindset. It is very interesting to see that the institution of marriage is seeing its power drop, I think years ago people would absolutely gasp at someone doing this, now it's like "woah, cool trick, I'm gonna marry my friend and get in on this too!")

> Why shacking up or pumping out kids gives the adults involved an advantage in their financial livelihoods

Even with all the tax benefits that children bring, parents still have way less money available than comparable couples without kids.

This financial disadvantage is a serious disincentive to having children. Do you want to live in an aging society without kids that will be dead in ~80 years?

I did this; it worked.

Very nice :)

This does not work everywhere - e.g. MIT

Source: I asked the Fin. Aid department

As the author states, this hack is for the FAFSA (the free application for federal student aid)... And given that FAFSA is listed on http://mitadmissions.org/afford/deadlines it looks like it would work with MIT.

FAFSA is only binding for Department of Education money, which is approximately nothing for a middle-class student at a top-tier school. Most of the reduction off the $60k sticker price comes from university grants, which universities can apportion as they see fit. Many use a combination of the FAFSA, the CSS PROFILE (which is more resistant to asset-hiding), and sometimes proprietary forms.

As I understand it, the exploit makes the DoE no longer see the person as middle-class.

With CSS PROFILE it sounds like it's just that some schools ask for parents information anyway:

    When can a student fill out the PROFILE as an
    independent? A student is considered independent,
    for financial aid consideration, if he or she is
    or has at least one of the following: is at least
    24 years old as of Jan. 1 of the academic year,
    is married, is a graduate or professional student,
    has a legal dependent other than a spouse, is a
    veteran of the U.S. Armed Forces, or is an orphan
    or ward of the court (or was a ward of the court
    until age 18). If not, the student is considered
    dependent. A parent refusing to provide support
    for his or her child’s education is not sufficient
    for the child to be declared independent.

    Financial aid eligibility is, in part, determined
    by a student’s dependency status. Independent
    students are treated differently from students
    who are dependent on their parents. However, some
    schools and programs require parental information
    on the PROFILE even if the student is considered
    independent based on the criteria above.

https://secure-media.collegeboard.org/CollegePlanning/media/...

Nailed it.

MIT has a fairly strict financial aid process. There are some gotchas, and even marriage won't make you exempt. When it comes down to it, it's a private institution that is able to decide for itself how it gives out financial aid, independent of FAFSA or CSS.

Someone at financial aid told me that they once dealt with a 35 year old, and they made him submit his parents financial information. Who knows if that actually happened, though...

I probably should note that the marriage trick can be of benefit with government issued grants and loans. You will probably also get some kind of tax benefits. You would definitely get $2500 for the American Opportunity Credit (but you can still sometimes get it if you're single.) Pell grants are also a thing.

This is relatively common in the military where being married bumps up your salary and gives your spouse free health care. One young lady I knew had her husband take out credit cards in her name. Also, IANAL, but prenups hold different weight in different states, no?

In the military, getting married to get paid more or to get off-base housing (a "sham" marriage) will get you jailed and dishonorably discharged. The housing allowance gained through the sham marriage is technically larceny -- it's a stolen benefit. [1] [2]

I would not be surprised if college kids in a sham marriage to gain financial aid could be charged with larceny of the financial aid.

Another, less felonious option, is to simply wait until you're 24 to start going to college full-time. Spend a few years going on some ridiculously interesting adventures, and another few years trying out various jobs, and you go to college as a mature adult with some actual life experience and a better idea of how you want to spend your life? I'm surprised it's not much more common. I guess if the cutoff was 21 and not 24 it would be an obvious choice, 6 years only works if you can actually start working in your industry of choice before getting the degree.

[1] - http://archive.armytimes.com/article/20121024/NEWS/210240319...

[2] - afcca.law.af.mil/content/afcca_opinions/cp/hall-38241_pub.pdf

The military might have some luck with such regulations, but I doubt civilian bureaucracy even pretends to care as long as the marriage actually exists on paper. It's just not enforceable.

The military is one thing, but I don't foresee a time when DoE is going to able to comment on the "content" of a marriage. Realistically, most of the most significant benefits of marriage are financial. This is just another example of such.

I'm going to go out on a limb here and say that this idea isn't going to catch on. Sorry.

It's quite a small amount of effort for quite a large gain. The ROI seems near-certain, if the article is correct.

It may not become the norm, but if the loophole works, there's probably already some people who are doing this.

Especially with the supreme court ruling on gay marriage makes the barrier to this even smaller.

Thats exactly what I was thinking after reading this article. If you don't want to make it awkward to explain to your future wife who this girl that you married 10 years ago is, just marry a guy instead.

> The ROI seems near-certain, if the article is correct.

Specifically, before getting married you can (have a friend) check with the college in question to confirm that they don't require parents financials for independent students.

You are correct - I know someone who told me she did this to get through college with minimal payments/debt.

If it catches on, changes will be made, and it will stop working.

Don't forget same-sex marriage is now a thing too, if you have trouble finding friendly members of the opposite sex.

Wow, this could get sketchy like those mail-order brides from Asia or Eastern Europe if people were to abuse this

This would probably work, but at the same time, is also incredibly depressing.

I'm not depressed by it, but I think it verges on silly that such a loophole exists. Marriages of convenience have been happening for a very long time. There is at least one really weird one that's been in the news for the past few months...

It's sort of like taxation. Any system of nontrivial complexity can be gamed.

This is easier than going to Germany and learning German.

Would this work in other countries? For example the UK?

I believe Student Finance ask whether or not you're financially dependent/ living with your parents, so I'd guess not.

what if i am gay ~>:C .... OH WAIT!!!!!!!!!!!!!

What if I'am widowed?

Remarry, duh.

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