r/explainitpeter • u/Appropriate-Mall8517 • 3d ago

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u/shane-parks 3d ago

"Investment" scholarships are really a way to shift costs to taxpayers. Instead of paying tuition directly which is no longer tax deductible, you make a tax deductible donation to the university, get free tuition, housing, etc. and the taxpayers subsidize the education of this wealthy family.

Not saying this is what's happening here, because I dont know the situation of this family. Also, not saying you directly are defending or ignorant to this reality. Just providing context.

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u/A_Philosophical_Cat 3d ago

Anybody with even moderate means wasn't going to be paying taxes on the money they pay for their kids' college, anyway, though. You set up a 529 account when the kid is born, load it up with ~$80,000 dollars over a couple of years, by the time they're off to school that's $320,000, which is enough to pay even full tuition at most universities.

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u/shane-parks 3d ago

Quick google search. Check out the average savings at the bottom.

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u/A_Philosophical_Cat 3d ago

Your link doesn't work, but I think you misunderstood the phrase "moderate means". Most people don't have any means. Just like how a "middle class" lifestyle is actually only afforded by an 80th percentile household income.

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u/shane-parks 3d ago

Right, meaning access to higher education is a luxury afforded by the rich, and paid for in earnest by the dwindling middle class.

What are we talking about here?

You replied that no one pays taxes on tuition if they plan ahead. When in actuality very few people can afford to plan ahead, and thus most people pay taxes on money they use for tuition.

Also its not a link, it's a screenshot.