To avoid steep “tax” by colleges on parental savings, don’t save for kids college, have them borrow lots, then help them pay off the loans fast.
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Replying to @robinhanson
Huh? If parents save a lot, then colleges will not provide them significant financial aid, requiring student to borrow $$$. So what's the difference here?
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Replying to @Jofi_Joseph_99 @robinhanson
the choice is between saving to pay directly for college vs saving to then pay off student loans. If the parents haven’t saved then they can’t do either.
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Replying to @rickyofmontay @robinhanson
Yes, which is why I don't understand picking Option 2, which comes with additional interest and fees.
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I agree. This scheme makes no sense unless you conceal the money you saved ex ante in order to later repay the student loan. Which is to say, fraud.
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Replying to @SandrewFinance @Jofi_Joseph_99 and
From the financial aid officer’s perspective savings are savings. It makes no difference if you claim that they are “for college” or for some other purpose. It makes a great deal of difference if parents understate their assets, but that can’t be Robin’s prescription, can it?
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Or maybe the argument here is don't scrimp and save while your child is growing up, try to get as much financial aid as possible, and then help your kid pay back whatever loans are taken out. That makes more sense at least.
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Yes, this is the sensible version.
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