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  • How to get a massive discount on college

    June 27th, 2015
    college, ideas  [html]
    Have you been accepted to a top college, one that promises to meet 100% of demonstrated financial need? (see list)? If you're planning on anything near the $60k/year sticker price you are dramatically overpaying. What if I told you that you could attend one of these top schools for free?

    They all figure your financial aid the same way. First they collect information about your income and assets using the FAFSA form, then they give you aid (effectively a discount) to make up the gap between what they charge and what they think you can afford. This is absolutely wonderful price discrimination: every industry would love to look deeply into your finances to figure out exactly what you'd be able to pay and charge you that, but only with colleges do we let them.

    As a high school senior, you probably don't have much in terms of income or assets. So why doesn't the college see you can only pay very little, and give you financial aid for most of the cost of college? Parents. The FAFSA doesn't just ask about your finances, it also asks about theirs too.

    But what if there were a simple way to exclude your parents' finances from consideration by the college? Where you'd be granted aid based only on your own income and assets? What's the catch?

    All you have to do is get married.

    Married? That seems a bit excessive! Promising to spend the rest of my life with someone from age 18 on, just to save money on college?

    Now that we have no-fault divorce, though, we're not talking about something permanent: you can plan to get divorced right after you graduate. So just find a friend you're not interested in romantically, sign a prenup, and go get married. Just a legal ceremony, you don't have to act married.

    Doesn't this devalue marriage?

    Marriage as a social institution is really important and beneficial. It's a good fit for a large fraction of couples, and the ability to invest and trust in a long term relationship is a wonderful thing. The declining marriage rate and high divorce rate make me sad. But the key thing here is that you don't act married. You're married legally but not socially, and it's the social institution that's actually important.

    But this sounds like fraud!

    From my reading of Marriage Fraud, (Abrams 2012, pdf) this wouldn't be marriage fraud because the test that would apply to determine if you count as married is simply "do you have a legal marriage" and not the more intrusive tests we apply in cases like immigration. But I'm not a lawyer, just someone interested in how this works, so you should probably check with one. The cost of running this by a lawyer is so much smaller than the cost of paying full price for college that it's worth checking. You can even have the same lawyer draw up your prenups!

    So who wants to save $200,000?

    (You could also turn this into a sketchy business. Offer to give people college for $10k/year and you'll handle the rest. You do the prenups, marriage, and divorce. You cover health insurance through age 26 because they're not on their parents insurance. You offer free legal advice in any situation that comes up where they're not sure how to report their marital status. You keep whatever money is leftover.)

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