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

(news.mit.edu)
736 points gnabgib | 5 comments | 20 Nov 24 16:59 UTC | HN request time: 0.624s | source
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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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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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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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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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1. adastra22 ◴[21 Nov 24 01:54 UTC] No.42200269[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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2. throwaway2037 ◴[21 Nov 24 04:01 UTC] No.42200964[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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3. adastra22 ◴[21 Nov 24 06:26 UTC] No.42201670[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.
4. jorvi ◴[23 Nov 24 05:07 UTC] No.42219304[source]▶
Situation:

You have parents A, B and C.

- Parents A own a small business.

- Parents B sold their small business two years ago, and put the money in the stock market.

- Parents C just scrimped and scraped and over the years saved up money equal to parents A and B.

I’m not sure why you’re so hellbent on giving specifically parents A a free pass. Why the unequal treatment?

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5. s1artibartfast ◴[23 Nov 24 17:08 UTC] No.42221948[source]▶
Thanks for explaining this much more clearly than I did.