• Posts
  • RSS
  • ◂◂RSS
  • Contact

  • Thinking About College Funding

    September 9th, 2021
    kids, money  [html]
    A few years ago I wrote about how, if you're trying to decide between direct work and earning to give, the college price discrimination system of financial aid can push towards direct work. It's a bit of a niche thing, since it really only applies if:

    • Your children are likely enough to be admitted to the kind of institution that commits to meeting 100% of demonstrated financial need, or otherwise has a similar "100% effective tax rate".

    • You're not be very interested in saving money for your own future use. The CSS Profile suggesting 5%/y for parental assets means that with three kids at 4y each you might be asked for 60% of assets.

    • Your earnings need to be low enough just before and during college, either because your career has never been highly lucrative or because you are willing to change your line of work for that time period.

    Now that we have a third child I'm thinking about this again, and in our particular case I now think we are pretty unlikely to take the direct-work-minimize-income approach:

    • Nora is unlikely to be in college at the same time as her older siblings, since she's five years younger. This would mean a much longer period of applying that approach, ~10y instead of ~5y.

    • The CSS Profile is very comprehensive in identifying assets, and likely to continue to get more so. If we chose that approach the value of our house and retirement assets would be unusually high for our income. This could raise flags, and many places do consider them to some extent.

    • I've been lucky in how well compensated I am, and if this continues then paying sticker prices for college would not impact our ability to donate.

    • I continue to enjoy working as a programmer, and think it's pretty likely I'll want to be doing something similar in ten years.

    This also means that a 529 college savings plan probably makes sense for us. This is an investment option where gains are not taxed as long as funds are limited to educational expenses. It's a lower priority than donations or retirement savings, but if we have additional money left over the lack of capital gains tax is nice.

    Comment via: facebook, lesswrong

    Recent posts on blogs I like:

    What I've been doing instead of writing

    I’ve been too busy with work to write much recently, but in lieu of that, here’s a batch of links to other stuff I’ve been doing elsewhere. The thing I’m most excited about: Wave raises $200m from Sequoia, Stripe, Founders Fund and Ribbit at a $1.7b valuati…

    via benkuhn.net September 11, 2021

    Meet a Historian: Michael Taylor on Why We Need Classics

    Note from the Editor: This week, Michael Taylor joins us to present A Defense of Classics. The last decade or so has seen Classics (the study of Mediterranean antiquity or more narrowly the study of Greece and Rome) in a hard sort of quandary. On the one …

    via A Collection of Unmitigated Pedantry September 10, 2021

    What’s Frustrating About Bus Redesigns

    The transit vlogger Alexandra Rose said something deeply disturbing and yet true on Twitter: More and more I think that bus network redesigns are too often just managed decline. I was really into zero cost change redesigns a few years ago, less so recentl…

    via Pedestrian Observations September 5, 2021

    more     (via openring)


  • Posts
  • RSS
  • ◂◂RSS
  • Contact