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Undergraduates with family income below $200k will be tuition-free at MIT

(news.mit.edu)
581 points gnabgib | 19 comments | 20 Nov 24 16:59 UTC | HN request time: 2.776s | source | bottom
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TheJoeMan ◴[20 Nov 24 19:26 UTC] No.42197249[source]▶
This is a great step in the right direction. I can't speak directly for MIT, but there are issues with how these programs don't apply to parents with small family businesses. My parents had a small business, with my father taking home a salary of $XX,XXX. Duke University used the business assets to determine the EFC (expected family contribution) of literally 90% of the salary. Essentially saying to sell off the family business for the college fund, which was a non-starter.

Small businesses are allegedly the backbone of America, and I feel these tuition support programs overlook this segment of the middle-class.

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1. s1artibartfast ◴[20 Nov 24 22:09 UTC] No.42198630[source]▶
Isn't the entire point of these assessments to look at total assets, and not just annual income?

I dont think this was an oversight or mistake. I think the expectation was that yes, people should sell assets if they have them .

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2. xboxnolifes ◴[20 Nov 24 22:39 UTC] No.42198884[source]▶
The "mistake" is that the assets themselves are the source of income. Sell them off, and the income goes away too. It's the equivalent of expecting the parents to use 100% of their income to put their kids into college, which is impossible.
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3. Dylan16807 ◴[20 Nov 24 22:49 UTC] No.42198953[source]▶
A bunch of stock is a source of income too, but it wouldn't be wrong to use some of it.

If the business is worth enough then selling it can replace all the income you would have ever gotten from it. It's not as simple as "income goes away". The specific numbers make all the difference.

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4. bb88 ◴[20 Nov 24 23:21 UTC] No.42199183{3}[source]▶
> A bunch of stock is a source of income too, but it wouldn't be wrong to use some of it.

Normal US tax law that most people fall under says no, stock itself is not income. It's only taxed at the time of sale. If you ask for mark to market taxing then any increase in market value during the calendar year will count as income -- even if you didn't sell anything throughout the year. But usually those people are drawing a direct income from trading.

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5. s1artibartfast ◴[20 Nov 24 23:34 UTC] No.42199287[source]▶
IF I have stock and make $XX,XXX in dividends, how is that different? IF I have own apartments and make $XX,XXX in rent, how is that different?

I think the idea is that Yes, the expectation is for people to make actual sacrifice before they qualify.

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6. switchbak ◴[20 Nov 24 23:34 UTC] No.42199290[source]▶
Should they also cut their kidneys out and sell those too?

For someone not in your system, the expectations that seem normal to you sound absolutely insane to others.

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7. s1artibartfast ◴[20 Nov 24 23:36 UTC] No.42199310{4}[source]▶
Yes, but I think these tests look at both income and assets (like stock). That is why people get dinged for owning assets, even if they are a source of income.
8. s1artibartfast ◴[20 Nov 24 23:45 UTC] No.42199388[source]▶
Nobody is forcing them to pay this price any more than you are forced to sell a kidney for a private jet.

Education costs are out of control, but you can still get a degree elsewhere for 10% the MIT cost, and have it paid for entirely by the government if you are low income

9. to11mtm ◴[21 Nov 24 00:04 UTC] No.42199534[source]▶
I'd ask how the assets are structured internally.

Is it a small business netting the owner 100K a year with 500K in the bank?

That's different than a small business netting the owner 75K a year but the trucks and equipment for the landscaping business (easiest example, replace as needed) being worth 200K...

It's complicated.

10. albedoa ◴[21 Nov 24 01:14 UTC] No.42200003[source]▶
Does MIT include the market value of their kidneys in their assessment? You might have lost track of what is being discussed here.

Anyway no, they should not cut their kidneys out and sell them.

11. adastra22 ◴[21 Nov 24 01:54 UTC] No.42200269{3}[source]▶
If this was inventory they were counting, sure. But you can’t sell part of a small business. Let’s say the parents own a restaurant, and the value of the land, building, and kitchen equipment is a few million. Do they sell an oven from the kitchen to put you through school? Sell the parking lot?

It’s an all or nothing thing. The business needs all its assets to function, and shouldn’t be considered any more than for its income potential.

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12. ehnto ◴[21 Nov 24 03:39 UTC] No.42200869{3}[source]▶
That's economic suicide not sacrifice, for many small businesses the asset produces the revenue. Sell the asset you may as well close the business. It is not a fair assessment of a family's means at all.

It's not equivalent to making all your income off one rental and having to sell it, but it is closer to that. If you sell it, you have no income now. But a small business also creates jobs and provides novel value to the community, so even more is lost than just a single income.

13. throwaway2037 ◴[21 Nov 24 04:01 UTC] No.42200964{4}[source]▶
Lease back for land and building is definitely possible. Most capital efficient corps do not own their own land and buildings for precisely this reason.
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14. snowwrestler ◴[21 Nov 24 04:12 UTC] No.42201033{3}[source]▶
It would be similar if your stock dividends were your sole irreplaceable means of support. So, you sell your stock and give the money to MIT. Now you can’t buy more stock, and therefore have no future income. Permanently ending your career to send your kid to college is an unreasonable sacrifice, in my book.
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15. s1artibartfast ◴[21 Nov 24 04:22 UTC] No.42201090{4}[source]▶
I wouldn't want to make that sacrifice either, but I also understand that im not entitled to tuition assistance as some sort of human right
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16. snowwrestler ◴[21 Nov 24 05:11 UTC] No.42201336{5}[source]▶
No one is arguing it is some sort of human right. The argument is that being the owner-operator of a small business is a financially different situation from having a lot of liquid wealth sitting around. And that smart universities should figure that out so they don’t accidentally lose good students over silly structural flaws in their financial aid processes.
17. baq ◴[21 Nov 24 06:15 UTC] No.42201611{5}[source]▶
There are countries with free public respected universities. So yeah not a human right but not that far off depending on where you live.
18. adastra22 ◴[21 Nov 24 06:26 UTC] No.42201670{5}[source]▶
It is sometimes an option, not always. Depends on the cash flow of the business and current market risks. Not every business is automatically eligible. Small mom and pop restaurants often can’t get a loan on demand, at least not on predatory terms.
19. xboxnolifes ◴[21 Nov 24 09:04 UTC] No.42202424{3}[source]▶
Running a small business is not the same as owning stock. I can own stock and can still work and one does not affect the other in terms of time or capability. On the other hand, selling your small business is equivalent to quitting your job.