Another simple move that makes sense to me
by czeche (2024-02-24 15:28:28)

In reply to: There are simple, go forward solutions that are specifically  posted by Raoul

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Make the payments fully tax deductible.

Perhaps only if you work in the field you graduated from, but in general as others point out the funds I put into my education are a business expense.

Yes, I suppose one would need to identify vanity degrees that are meaningless, but even there it seems a lesser issue then giving money to a multi billion dollar hedge fund with an educational mission like ND.

entire payment or just interest?
by jt  (2024-02-25 15:02:05)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

I think that a deduction on interest is fair, perhaps with some income phase outs.
They have it on interest below certain income levels
by czeche  (2024-02-25 19:42:14)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

However, my entire medical school bill was a necessary business expense, both principal and interest. It's not any less relevant to me being a doctor than a company car is for a salesman or the myriad of write offs that businesses include, other than the temporal fact that the tuition expense is incurred in a different year, and by category is not a write off expense.
you don't have to convince me, I know and agree *
by jt  (2024-02-26 11:16:54)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

Interest was deductible until the early 1980s. Vivid memory
by Moose84 (click here to email the poster)  (2024-02-25 16:54:33)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

summer of 1980, when applying for my first loan, of my dad saying "after you graduate and are making money you will be glad to have this interest to write off." Nope. Eliminated while I was in school. Still, my $35K debt (10K undergrad, 25K law school) pales in comparison to today's world.

I feel like I am always on the losing side of these policies. My wife and I lived below our means to stash cash in 529 plans. Paid ~$700K out of pocket to get our 5 through college; 20 years of tuition in 12 years (2006-2018). Those that went to ND had some loans but happily 2 of the 3 have theirs paid off. Other two (UVA and SMC) had no loans based on their college choices. I played it safe and by the rules - others get bailed out. Oh well. I am grateful for the 529 saving plan incentive, however.

@jt - my middle child (it's always the middle child) may need your services as she is a doctor in debt, currently in a fellowship at Michigan. e-mail linked.
It's still deductible above the line. But phase out is low
by gregmorrissey  (2024-02-25 17:07:52)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

The interest deduction income phase out is comically low in my opinion.

Your daughter should look into PSLF and SAVE (or whatever they call the income based repayment plans now).

I do find it interesting how you look at it though. You call $12k a bail out. I'm interested to know how much capital gains tax was saved in the 529 plans. I'd guess it was significantly more than $60k (5 kids x $12,000). I'll admit I'm making the possibly wrong assumption that the full $700k was paid out of the 529. Also, depending on where you live, it's possible those 529 deductions saved you a decent amount of money in state income tax.

I'd be somewhat surprised if the full 700k was from 529
by jt  (2024-02-25 17:39:14)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

accounts.

That would be relatively impressive savings over a relatively short period of time, considering they weren't even around until 1996, and by 2000 there were only 30 states that had them. It really took the tax act of 2001 to get them off the ground and into the mainstream.

that said, anything is possible.
Agree, but tax savings likely still substantial
by gregmorrissey  (2024-02-25 18:06:26)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

I was just trying to point out it was a significant benefit received from a government policy decision, and I would assume Moose84 (similar to CATripleDomer below) would object if someone characterized it as a bail out.

In thinking about it a little more, $60k would require between $300k and $400k in gains which is unlikely so Moose84's net benefit of the 529 was likely less than $12k per kid, again depending on state tax impact.

I want to point out that it's an honorable thing that Moose84 did to sacrifice and save for his kids' tuition. He used the government programs available to him to as much benefit as possible which I encourage everyone to do. Just asking everyone to acknowledge the benefit and not describe benefits received by others using negative terms.

Thanks. And I am grateful for the 529 Plan program.
by Moose84  (2024-02-26 07:52:28)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

The tuition did not all come from 529. I had a unique situation 2010-2012 that allowed me to pay a year or two of kid 3's and 4's ND tuition out of cash flow while their 529s recovered and grew after the 2008 market meltdown.

Perhaps I was to strong in my wording saying "bail out." It just seems that policies change right at the wrong time for me. I am grateful I avoided parent loans or encumbering my house with new debt to accomplish the feat.

I said it before, I will say it again -- I am so glad to be out of that rat race!

@jt - I will e-mail you.

I don't know that I disagree with anything that you say
by jt  (2024-02-25 18:26:43)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

my concern is that this program, whether you call it a bailout or not, really doesn't solve the underlying issue(s).

It just reeks of politics as usual in this day and age.
I agree there too
by gregmorrissey  (2024-02-25 18:32:26)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

I wish they would solve the real problem or even make an attempt. I won't hold my breath. In the meantime, I'm not going to begrudge a government benefit that might actually go to a middle class recipient for a change after experiencing the actual bailouts over the last 15 years.