College Financial-Aid Loophole: Wealthy Parents Transfer Guardianship of Teens

Re:College Financial-Aid Loophole: Wealthy Parents Transfer ... by SilasX on Monday July 29, 2019 @11:28PM (#20561898)

Yeah that's kind of a danger when you have income-based aid. I remember hearing about related schemes where e.g. a couple will get divorced and give custody of the children to the lower-earning spouse so that said spouse can qualify for ACA exchange (Obamacare) subsidies and thus get cheaper healthcare.

It doesn't mean the costs outweigh the benefits, but you have to be careful about what behavior you're incentivizing and what you plan to do about that.

It's always tempting roll your eyes and say, "Come on, no one's going to legally disown their children/get divorced/have a child out of wedlock/pass up work just to game an aid policy!"

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Re:College Financial-Aid Loophole: Wealthy Parents Transfer ... by gizmo686 on Tuesday July 30, 2019 @12:54AM (#20562219)

I'm still not clear what the actual benefits are. In effect, adding a means test to your aid is just a tax. It just happens to be a tax that is hard to reason about and causes all sorts of weird effects. Wouldn't it be simpler to give everyone whatever subsidy we wanted to give; and as a separate matter (possibly simultaneously), increase taxes on the "richer" people (where richer is whatever we would have determined is wealthy enough to not need assistance).

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