More financial aid fun from the Boston Globe.

Morton Schapiro was caught in the middle, between his parents and his children.

”When my parents gave money to their grandchildren [for college], they put it in their names, not the kids,” he said. ”I cringed.”

Morty has some smart parents! Naifs in the world of college financial aid should understand that when the Schapiro grandparents give $500 to Morty’s children in the children’s names, then the colleges to which the children apply will count that money against any potential grants or awards, almost dollar or dollar. But, if the money is in the grandparents’ names, the colleges may not even be aware of it. (I believe that financial aid forms do not ask for any grandparent information.) So, instead of giving X – $500, the college will give the younger Schapiros X, leaving them with an extra $500 to spend how they wish.

Of course, the whole idea that Morty’s children would be eligible for any financial aid in college, given their father’s income, is pretty unlikely. Yet, these sorts of issues can come up in graduate school funding, when parental income is sometimes irrelevant.

In any event, EphBlog readers are encouraged to follow the lead of the senior Schapiros: Keep gifts to your children/grandchildren in your name.

His discomfort comes from his position as president of Williams College in Williamstown, and as a member of the 568 Presidents Group — 28 colleges and universities that are trying to simplify the process of applying for student financial aid. As part of that effort, the group wants to eliminate the need for families to decide whether to keep money for college in the children’s name, the parents’, or the grandparents’.

What a marvelous technocratic delusion! I want to plant roses on Route 2, but my wishes and reality are probably in conflict. Unless and until the nice busy-bodies at 568 start demanding financial forms — tax returns? savings? property listings? — from grandparents, there is no way for them to know how grandparents could contribute. Moreover, even if we achieved Total Information Awareness with regard to grandparental assets, there will always be a way for (smart, privleged) people to beat the system.

And, even if the central planners at 568 could find out every dollar of savings available to the family, there would still be no way to reliably estimate the other side of the balance sheet, the liabilities that we all have. Grandparents with equal wealth often have very different sets of future obligations. Some are healthier, some have more grandchildren. All face a variety of human obligations, invisible to the form-perusers at 568.

And — how long do I need to go on? — even if one could ascertain the assets and liabilities for every set of parents and grandparents in the world, there would still be no way to measure the single most important variable: love. It’s sad but true that some grandparents love their grandchildren more than others and that, even for the same set of grandparents, some grandchildren are favored over others. How will Morty and his friend ever figure that out, determine how much money grandma is really willing to donate to her grand-daughter’s education?

Obviously, they can’t. The central premise — that “need” can be determined from a distance — of a collusive system like the 568 Presidents Group is false.

More ranting on this article another day. Previous similar rants here, here and here.

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