7-year-old starts recycling business

[StormRichards]

Nice little story. Raised over $10k for college already

http://www.msn.com/en-us/news/good-news/7-year-old-starts-recycling-business-to-earn-money-for-college-while-saving-the-planet/ar-AAmPOqh?li=BBnb7Kz

[bennkar]

The only thing I don't like about it is when he goes to college (assuming he does), most colleges will cut back on financial aid because he has that money, basically penalizing him for doing this. Yeah, first world problems I suppose, but there's just something about that that really irritates me. Still... good for him.

[creditcardfree]

The only thing I don't like about it is when he goes to college (assuming he does), most colleges will cut back on financial aid because he has that money, basically penalizing him for doing this. Yeah, first world problems I suppose, but there's just something about that that really irritates me. Still... good for him.

Why do people think they deserve financial aid for college if they have the ability to save? Nothing against you personally bennyhoff, I just find the mentality of getting penalized a tough one to understand.

Yes, students and parents should use funds they have saved for something they want. One really has to be low income to get true financial aid in the form of grants that don't need to be repaid. Most financial aid comes in the form of loans with interest that the student has to pay back, so it is one's interest to at least have some money saved in advance for the cost of college.

[Like2Plan]

, most colleges will cut back on financial aid because he has that money, basically penalizing him for doing this.

If you were to insert "the amount of loans he gets" instead of "financial aid" and leave off "basically penalizing him for doing this", I wouldn't have any heartburn with your statement.

Folks believe financial aid is a good thing. It is if you don't have any other way to pay for college. But, financial aid shouldn't be the goal. Most of the financial aid is in the form of student loans and work study unless the parents are in a very low tax bracket with no assets.

Financial aid= loan. A loan has interest payments. Paying interest on top of paying for college makes college cost more money. Having to pay interest on a loan is the penalty.

[bennkar]

Why do people think they deserve financial aid for college if they have the ability to save? Nothing against you personally bennyhoff, I just find the mentality of getting penalized a tough one to understand.

Yes, students and parents should use funds they have saved for something they want. One really has to be low income to get true financial aid in the form of grants that don't need to be repaid. Most financial aid comes in the form of loans with interest that the student has to pay back, so it is one's interest to at least have some money saved in advance for the cost of college.

Financial aid in grant form depends heavily on your family finances, amounts saved, and the retail college costs among other factors. While sure, if the family is doing well then his saving for college is a no brainer, but if his family isn't that well off, saving in his name *may* be penalized heavily by lower grants. Everything is variable, but some colleges will expect a child to contribute 50% or more of their saved money for college costs. If the choice is between say buying a decent car to take to college versus not buying any car and going to college without one and saving that money for college instead it would be hard to justify not buying that car if he is going to be "taxed" 50% instead. As this is a saving advice forum, I think you would be hard pressed to find someone that thinks getting taxed at 50% is a good idea.

TL;DR: For almost everything in life saving money is good & overspending is bad. When getting funding for college overspending is good & saving is bad.

PS: I don't take it personal - I know my viewpoint isn't universal on this.

[creditcardfree]

Financial aid in grant form depends heavily on your family finances, amounts saved, and the retail college costs among other factors. While sure, if the family is doing well then his saving for college is a no brainer, but if his family isn't that well off, saving in his name *may* be penalized heavily by lower grants. Everything is variable, but some colleges will expect a child to contribute 50% or more of their saved money for college costs. If the choice is between say buying a decent car to take to college versus not buying any car and going to college without one and saving that money for college instead it would be hard to justify not buying that car if he is going to be "taxed" 50% instead. As this is a saving advice forum, I think you would be hard pressed to find someone that thinks getting taxed at 50% is a good idea.

TL;DR: For almost everything in life saving money is good & overspending is bad. When getting funding for college overspending is good & saving is bad.

PS: I don't take it personal - I know my viewpoint isn't universal on this.

I understand. There are lots of factors at play. I think your viewpoint may be more common than you think though, maybe just not on this forum.

[bennkar]

If you were to insert "the amount of loans he gets" instead of "financial aid" and leave off "basically penalizing him for doing this", I wouldn't have any heartburn with your statement.

Folks believe financial aid is a good thing. It is if you don't have any other way to pay for college. But, financial aid shouldn't be the goal. Most of the financial aid is in the form of student loans and work study unless the parents are in a very low tax bracket with no assets.

Financial aid= loan. A loan has interest payments. Paying interest on top of paying for college makes college cost more money. Having to pay interest on a loan is the penalty.

While this is true (and I certainly agree), realize that "financial aid" loans usually have much better terms (lower rates / interest deferral) than open market loans will give. While not nearly as onerous as being penalized with fewer grants, being forced to get a loan at your local bank and having interest added over four years (and at a higher rate) is still a big penalty for the saver.

[disneysteve]

some colleges will expect a child to contribute 50% or more of their saved money for college costs.

I think you would be hard pressed to find someone that thinks getting taxed at 50% is a good idea.

So you think being expected to use your own money to pay for college constitutes a "tax"?

I have no problem with students and families getting aid they qualify for, but if they have substantial assets of their own, they shouldn't qualify for aid, or at least not as much.

My daughter is a junior in college. We get zero need-based aid because we are fortunate to not have financial need. My wife and I and our daughter all have savings. I wouldn't want the school or government to hand us money just because when that money could be going to someone who actually needs it.

[greenskeeper]

The aid should be contingent on grade point average per funding period. If you flunk out you are on the hook for all the money, from there pro-rate the aid based on grade point average giving 100% aid for a 4.0

When I was in college I distinctly remember a conversation with fellow classmates who didn't get any aid, wondering why the "thugs" from the city were able to get practically a free ride, party the whole time doing drugs, and then go back to the hood while we were struggling to either finance tuition or pay cash.

[bennkar]

So you think being expected to use your own money to pay for college constitutes a "tax"?

I didn't mean for that to sound like I was referring to it as a tax, but you got me thinking on it now.

Governments look to what their lower income citizens need (social services) that they can't afford to pay for and they tax people to pay for these services (usually higher earning individuals). Ok very simplistic and ignores lots of interactions, but you get the point.

Colleges look at what their endowment can afford to give out over the coming year, they look at what the level of need is for the student body for the year and allocate those funds out by giving more financial aid to "higher need" students, however they define that. That means more must be paid by the lesser need students to pay for the shortfall after considering the money coming from the endowment. Ok, again this simplifies it a lot, but you see how it works.

So yeah, it works like a tax. I mean, is there any other item you are expected to pay more to get strictly because you can pay more? Income Taxes are the only thing comparable I can think of (Ok, I thought of another - church tithing. I don't go to church, so it didn't cross my mind). And when I say it is a tax, I don't mean it in a pejorative way as taxes can be good for a society as a whole. I just think this sends a bad message to potential students that (everything else being equal) you should be a mindless consumer sucker and that we'll (gov't/college) make up for it so it won't hurt that you behave that way.

Another way to look at it is the old inheritance question. If you have siblings and you save and scrimp so you can have a decent life, and then you find out after your parents die that they gave their money to your spendthrift siblings while not giving anything you, do you feel proud that you got nothing from them or do you feel like a chump for working extra hard & denying yourself all those years. If you don't even have a twinge of regret or heartburn then you're a better person than me. Not saying I would hate my siblings or question my choices in life, but I would at least wonder about my parents priorities.

Oh, my apologies to the OP. I didn't mean to derail the wonderful story. I didn't think my comment would go this far. I'll keep this to myself from here on out.

[StormRichards]

Thanks for the apology benny.

[creditcardfree]

Thanks for the apology benny.

I apologize too. I commented on benny's post. I do think it's a wonderful article about the 7 year old doing something he loves, helping the environment and getting some benefit from it. It really doesn't matter what he does with the funds, but I give props to saving for his own education!

[disneysteve]

I apologize too. I commented on benny's post. I do think it's a wonderful article about the 7 year old doing something he loves, helping the environment and getting some benefit from it. It really doesn't matter what he does with the funds, but I give props to saving for his own education!

Agreed. Good for him. And I think this really points to what pretty much anyone can accomplish. If a 7-year-old (with parental help, of course) can go out and earn $10,000, surely an able-bodied adult could do the same or more.

[Like2Plan]

Yes--good for him! If he makes 10k at 7, imagine how much more he will ean in the next 11 years.