UM Free Tuition for In-State Kids Whose Families Make Less Than $65K

Submitted by winterblue75 on June 15th, 2017 at 3:24 PM

Just announced by UM. Leaders and Best



June 15th, 2017 at 3:33 PM ^

That's not how this works, man. The NCAA cannot legislate against a walk-on receiving need based aid, it's plainly within the realm of accessibility for any student so it's fine. Other states in the south also have similar programs, check out Georgia's HOPE Scholarship. This won't move the needle with the NCAA.


June 15th, 2017 at 4:13 PM ^

Very nice move by the university. Now I'd just love to see what % of current enrollees this applies to. Great PR, but if I'm Dean of Admissions I'd just take an extra out-of-state kid for every two kids this applies to and I've maintained the status quo. But I'm a grinch haha.

Mr. Yost

June 15th, 2017 at 6:31 PM ^


If you have a single parent who makes less than 65k, but your biological parent who isn't in your life pushes you over that does that work?

Let's say mom makes 50k, and is legally divorced from dad...he is not in your life and hasn't ever been. But he makes 75k, but you and mom only see child does that work?

The People's Jones

June 15th, 2017 at 3:29 PM ^

That's great, but inevitably it will suck for the person whose parents make 70K.  Also, how about the people making 100K with 3 kids in college?  Some sort of gradient would be more beneficial, but that's hard to set.  


June 15th, 2017 at 5:10 PM ^

To be fair, global average temperature is a TERRIBLE metric to use to explain information about the climate to the general public. Climate scientists understand that a 2 degree change is a big deal and a 4 degree change catastrophic. The general public knows that the temperature might change outside by 4 degrees in just the time it takes them to drive to work in the morning. 

What's equally scary to me is that I don't remember learning (at least as part of formal schooling) about the basics of the exponential formulas that underly, say, interest rates until at least high school analysis class -- a course which was only taken by, I'm guessing here, maybe 25% of the students? Certainly fewer than 50% -- and that's at a very well-to-do suburban high school. And now 15+ years later, probably 90+% of those students now have mortgages and 401ks?

Point is, it's not surprising when people have a hard time making sense of things they've never really learned about in the first place.


June 15th, 2017 at 6:09 PM ^

I took s Logic class at U of M and it was  a really good foundational learning class. How many time do you hear x caused y because they happened to occur at the same time? Same thing with economics, that should be a class everyone should have to take in high school.


June 15th, 2017 at 8:09 PM ^

Marginal tax rates do not equal effective tax rates.  The tax brackets are based on marginal income.

Yes, in your example, by going $1 above, you are going to pay 33% instead of 28% but only for that $1; it does not change the tax rate applied to the income you earned prior to moving up to the 33% tax bracket.  Yes, your overall effective tax rate will increase, but it will not increase by 5% of your taxable income.  In fact, if you only make $1 extra, your effective tax rate will barely change at all.

Tax Table for Individuals

Tax Rate    Income Range
10%             0 - $9,325
15%             $9,326 - $37,950
25%             $37,951 - $91,900
28%             $91,901 - $191,650

Example 1:  Let's say that you are an individual whose taxable income (all income minus deductions, credits, etc.) is $91,900.  Your marginal tax rate is  25%.  Your effective tax rate is approximately 20.3632%.

Income from 0 - $9,325 = $9,325 of income ---> taxed at 10% = $932.50
Income from $9,325 - $37,950 = $28,625 of income ---> taxed at 15%   = $4,293.75
Income from $37,950 - $91,900 = $53,950 of income ---> taxed at 25% = $13,487.50

Total Taxes paid is $932.50 + $4,293.75 + $13,487.50 = $18,713.75
Total income of $91,900
Effective Tax Rate = $18,713.75 / $91,900 = approximately 20.3632%

Example 2:  Let's you say make an extra $1 so that your taxable income is now $91,901.  You have jumped a tax bracket, so your marginal tax rate is now 28%.  Your effective tax rate is now 20.3635%.  It barely made a difference (0.0003%).

Income from 0 - $9,325 = $9,325 of income ---> taxed at 10% = $932.50
Income from $9,325 - $37,950 = $28,625 of income ---> taxed at 15% = $4,293.75
Income from $37,950 - $91,900 = $53,950 of income ---> taxed at 25% = $13,487.50
Income from $91,900 - $91,901 = $1 of income ---> taxed at 28% = $0.28

Total Taxes paid is $932.50 + $4,293.75 + $13,487.50 + $0.28 = $18,714.03
Total income of $91,901
Effective Tax Rate = $18,714.03 / $91,900 = approximately 20.3635%

This idea that you get drastically screwed because you made an extra dollar which caused you to jump a bracket is just a ridiculous view that unfortunately a lot of people share.


June 15th, 2017 at 3:40 PM ^

That's not at all how the tax brackets work. When you move to a higher tax bracket only the money made over that number is taxed at the higher rate. In your theoretical situation the person in the higher tax bracket would only be charged 33% on the $1 they made in that bracket while the income they made up to that amount would be in the lower rates.


June 15th, 2017 at 3:43 PM ^

I'm no tax guru, but doesn't just your income above that tax bracket get taxed at that rate?

If families are smart, they'll invest extra in 401k or do whatever to artificially lower their income below the $65k. Really would make more sense to have a gradient....


June 15th, 2017 at 3:43 PM ^

That's not how income tax brackets work, I'm afraid. If you go into the "higher bracket" because you made $1 more than the old bracket upper end you were in last year, you get taxed at the higher rate only on your income over that threshold. So in your example, you'd get taxed at the 33% rate on just the $1 you made above the old bracket, and at 28% on the rest of your income.

Extending that to the valid critique - in my opinion - of the person complaining above, how about a person making $85,000 a year pay something, but less than the family making $125,000, who in turn pays less than the family making $200,000, and so forth...  

The more you know! 

nut tree

June 15th, 2017 at 4:12 PM ^

You must know nothing about tax brackets. It does not work that way at all. If $1.00 falls in the 33% bracket, only that $1.00 is taxed at 33%. Then the "band" just below that is taxed at 28%, then below that is at 25%, then 15%, and the lowest portion below that (down to $0) is taxed at 10%. If you go over the threshold into a higher bracket, that does not make all of your TAXABLE income at that tax rate. It's a scale. I have a client in the 35% bracket with $453,588 of taxable income. Their tax is $124,793. Divide tax ($124,793) by taxable income ($453,588) = effective tax rate of 27.51241%, not 35%.


June 15th, 2017 at 3:49 PM ^

Kramer: It's a write off for them.

Jerry: How is it a write off?

Kramer: They just write it off.

Jerry: Write it off of what?

Kramer: They just write it off!

Jerry: You don't even know what a write off is, do you?

Kramer: No. Do you?

Jerry: No I don't!!