
Low-Income College Students Are Being Taxed Like Trust-Fund Babies - tysone
https://www.nytimes.com/2019/05/17/us/politics/college-scholarships-tax-increases.html
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swozey
> About 14 percent of the university’s undergraduate class is part of a
> program called the Carolina Covenant, which provides debt-free, full
> financial aid packages to students who fall below 200 percent of the federal
> poverty level. That package includes nontuition room, board and living
> expenses that total about $13,402 in the university’s estimated cost of
> attendance next school year.

Are you still required to combine both parents income (even if they're
divorced and you're estranged from one or both of them) before you qualify if
you're under 25 (23?)?

When I was 19 I didn't qualify for any financial aid because my fathers income
_HAD_ to be included in my application even though he didn't contribute
anything to me and my mother was on disability, they were divorced and I
hadn't seem him in years. I believe he was in the 40-50s range and my mother
was under $10k/yr.

I was making around $10/hr working full time and attempting to put myself
through about $40k of debt. No pell grants or anything. I couldn't afford a
real school and dorms or any of that at all. I eventually just dropped out
because working 8 hours a day and going to class and affording rent, etc
wasn't exactly going my way.

I feel like I rarely hear about this and it always makes me wonder if there
was something more we could've done. I remember this distinctly though and my
mother fighting back and forth with admissions. It just makes no sense to me.

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daniel-cussen
If financial aid helped everyone it should, it would just be called low- or
no-tuition. But if schools admitted that, they would have to accept something
they would rather not talk about: generous-sounding financial aid does not
make jacking up tuition a victimless crime.

~~~
rayiner
Why should financial aid help people who can afford to pay sticker?

~~~
Tostino
Why should "sticker" be as outrageous as it is currently?

~~~
barry-cotter
Why don’t I deserve a penthouse apartment in the centre of Dublin for €200 a
month?

Because suppliers want money and demanders are willing to provide it to get
what they want.

~~~
Tostino
Yeah that's a pretty dumb argument. I'm talking about education which
preferrably would not be subject to supply and demand forces as much as other
markets.

~~~
barry-cotter
If you want an education MOOCs, old textbooks and MIT OCW are cheap or free.
If you want a degree that costs money because people want their stamped
certificate of membership of the bourgeoisie.

~~~
Tostino
Your talking to someone who has done very well for himself without a degree,
not by choice. I couldn't afford community college in my day because I was
unwilling to take on debt, while working 40 hours a week and living at home.

I don't believe that is a fair way to treat students though. You shouldn't
have to get in debt up to your eyeballs to compete in the job market.

I was lucky I was naturally inquisitive and interested in learning all I
could. Not everyone is though, and that's alright. If they learn better in a
structured environment, I don't think that should preclude them from being
educated.

~~~
barry-cotter
The average Bachelor’s graduate in the US has $30,000 in debt on graduation,
the price of a new car. That just isn’t that expensive for the magic piece of
paper that gets you past HR. If you didn’t want to go into debt that’s fine
but if you have a credible chance of graduating $30,000 over the course of a
working life is not bad.

If you want a degree you can actually get a regionally accredited US one way
cheaper, from Western Governors’ University or go even cheaper and munchkin
transfer credit requirements and credit by examination like the people at
[https://www.degreeforum.net/](https://www.degreeforum.net/)

Or you can do like I did and fart about for years and go straight to getting a
Master’s in Finance for ~£10,000 from CEFIMS by starting off studying Master’s
modules as individual professional awards or in Software Engineering from
Oxford more or less the same way.

[https://www.cefims.ac.uk/programmes/ipa/](https://www.cefims.ac.uk/programmes/ipa/)

[http://www.cs.ox.ac.uk/softeng/study/apply.html](http://www.cs.ox.ac.uk/softeng/study/apply.html)

> Admission criteria Applications are invited from anyone with sufficient
> experience or proven ability in software, security, or data engineering. An
> appreciation of the challenges and practices facing professionals in the
> field is expected, together with an appropriate level of logical,
> mathematical, or analytical skills. A typical applicant will have at least
> two years' experience in a professional environment, and an undergraduate
> degree in a related subject. However, more extensive experience may
> compensate for a lack of formal qualifications

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4NDR10D
This doesn't only effect undergrads, this is also horrible for graduate
students. I'm going to be directly effected by this tax this year if the law
doesn't change. It will tax my fellowship stipend (used for living expenses
such as rent, food, and transportation) equivilant to an ESTATE.

It's basically like saying that grad students are not "earning" this income
and thus they don't deserve to be taxed on it as if it was a wage.

~~~
awinder
But not quite like an estate since you have to have an estate larger than
$11.4M before any taxes will be applied to it. That raised limit was also part
of the tax bill; you’re just offsetting the cost.

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sriram_sun
> "The impact on full-time undergraduate and graduate students under the age
> of 24 went largely unnoticed until the waning weeks of tax season."

I disagree. So many Phd. students were complaining about it. I guess it has
hit them hard.

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6gvONxR4sf7o
So the problem is that all unearned income that isn't for tuition is being
taxed the same, regardless of who it's coming from and who it's going to? Am I
reading it right?

~~~
4NDR10D
Thats the gist. The main problem is the lack of distinction between finincial
aid or graduate fellowships and other forms of "unearned income". This lack of
distinction leads to a graduate student's only source of income (a fellowship)
being taxed as if it was a gift handed down by a rich parent.

~~~
briandear
It is a gift handed down by a rich parent — the parent in this case is the
university. There is no difference. Someone is handing you thousands of
dollars and they say: “here is some money for your school, in order to keep
getting this money, you have to get good grades and volunteer as a teaching
assistant.” How is that any different than a rich parent giving you the same
money with the same conditions? At the end of the day, some benefactor is
handing you a pile of money to get an advanced degree.

~~~
4NDR10D
It seems you may be unfamiliar with STEM Ph.D programs. The way it works is
professors "sponsor" a graduate student to do reserach for them. The student
will either work on existing projects started within that professor's lab or
start their own related projects. The goal of this research is to contribute
novel material into scientific literature.

It's also usually NOT a rich parent. For example a big funder is NSF or NIH,
these institutions grant money to labs with the expectation that they will
perform research.

Don't think of it as being paid to go to class, think of it as a job where you
work 40 hours a week (usually way more) doing reserach, then go to class, then
on top of that help teach those classes through being a TA.

~~~
6gvONxR4sf7o
Those cases really should count as earned income then.

~~~
lutorm
Indeed, and I'm surprised it wouldn't be. When I was a graduate student we got
tuition waivers but beyond that it was a salary for being a teaching or
research assistant. TAs were definitely considered employees, because they
were also union-represented.

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mrfusion
Is this only an issue if the students are claimed as dependents? (I might be
misunderstanding)

~~~
junar
No. The test are similar, but actually being claimed as a dependent has
nothing to do with it. If you meet all of these tests, you may be subject to
the tax.

1\. You had more than $2,100 of unearned income.

2\. You are required to file a tax return.

3\. You were either:

a. Under age 18 at the end of 2018,

b. Age 18 at the end of 2018 and didn’t have earned income that was more than
half of your support, or

c. A full-time student at least age 19 and under age 24 at the end of 2018 and
didn’t have earned income that was more than half of your support. (Earned
income is defined later. Support is defined below.)

4\. At least one of your parents was alive at the end of 2018.

5\. You don’t file a joint return for 2018.

[https://www.irs.gov/instructions/i8615](https://www.irs.gov/instructions/i8615)

Edit: But being _eligible to be claimed as a dependent_ can reduce your
standard deduction, potentially causing more of your income to be subject to
tax. Even if they choose not to claim you, your standard deduction is still
reduced.

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linuxftw
College education should not be the primary route out of poverty, that's the
real issue. Not everyone can or should get a college education.

College should just be cheaper for everyone. Eliminate federal-backed student
loans, eliminate useless classes, eliminate remedial classes, utilize more
technology, eliminate excess administrators, eliminate ever-expanding resort-
style amenities.

~~~
fzeroracer
College education is likely not the primary route out of poverty. That medal
would likely go to the military right now, and I hope I shouldn't need to
mention the myriad issues of having an entire class of citizen whose only
potential route out of poverty is by joining the military industrial complex.

Everything that you mentioned otherwise comes as a result of universities
designing for-profit over for-education. Because they have to attract the
people with the deepest pockets, which means resort-style amenities. The
easiest way to solve this problem is to just make college free and give people
the choice of going the traditional route, going to a technical school etc.

If people want to get a college education, they should be able to.

~~~
fjsolwmv
Military is only a good route if you win the lottery and don't go to a battle
zone and get injured and then thrown away

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kosys
Why don't we just be honest. The housing mortgages crisis bailout with many
other blunders by the government... has resulted in using the new generation
as the potential piggybank to pay it all back. The generation in power doesn't
care if one generation is sacrificed with all the downfalls that occur to the
young persons who have no help from their parents or whatever reasons.

~~~
resoluteteeth
The government got back the money from the bailout with interest, so there's
no debt left from it for future generations to pay back.

~~~
apta
Paid back by the people who this was passed down to.

