The Implicit Taxes from College Financial Aid / Andrew W. Dick, Aaron S. Edlin.

Format:

Book

Author/Creator:

Dick, Andrew W.

Contributor:

National Bureau of Economic Research.

Edlin, Aaron S.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5316.

NBER working paper series no. w5316

Language:

English

Subjects (All):

College costs.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1995.

Cambridge, Massachussetts : National Bureau of Economic Research, [1995]

Summary:

Families who heed the 'experts'' advice and save for their children's college education typically receive less financial aid. The variation in the net price of college functions as a large tax on savings. College financial aid also functions as an income tax. This paper estimates the size and determinants of these income and asset taxes. We find that the marginal income tax typically ranges from 2% to 16% and the marginal asset levy from somewhat under 10% to as high as 25%. If a typical family chooses to accumulate $100,000 in assets rather than consuming these resources, it loses financial aid worth $10,000-$20,000.

Notes:

Print version record

October 1995.