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Professional Judgment
 
Elementary and Secondary School Tuition

Tuition expenses at an elementary or secondary school are one of the professional judgment items explicitly mentioned in section 479A of the Higher Education Act. Unlike most of the other special circumstances, however, the decision to send one's children to a private elementary or secondary school is discretionary in nature.

As a result, some financial aid administrators are less inclined to grant an adjustment for private school tuition, since they consider it to be a lifestyle choice. Those financial aid administrators will only make an adjustment when there are circumstances beyond the family's control, such as a special needs child or a court order.

Most financial aid administrators, however, will allow an adjustment for the student's siblings, in part because it is explicitly mentioned in the statute. Although it is to some extent a lifestyle choice, the money is being spent on education. Considering that the need analysis methodology does include an implicit adjustment for postsecondary tuition and related expenses by dividing the parent contribution by the number of children in college, it seems reasonable to adjust income for actual elementary and secondary school tuition expenses.

When financial aid administrators allow an adjustment, some allow the full amount of tuition paid as an adjustment, while others cap it in some manner. A common cap is the cap the College Board uses in the Financial Aid PROFILE. That cap is based on the average cost to the government to educate a student in the public schools. (For 2004-2005, the average cost is $8,701 per student according to the National Center for Education Statistics (NCES). This is the most recent year for which data is available. NCES also publishes projections of future per-pupil public education costs.) The reasoning is that this is the amount the government saves when a parent sends their children to private school. (This is the rationale specified on page 4 of DCL GEN-87-27 in connection with the allowance for elementary and secondary tuition expenses in the Uniform Methodology. At the time they used a $3,150 limit per child and wrote that "This limit is based on the national average per pupil instruction costs for a student attending a public elementary or secondary school. Thus, the allowance is limited to what it costs a taxpayer to send a student to public school. Any cost beyond the $3,150 per child limit is considered discretionary and is not allowed.")

Note, however, that when colleges make an adjustment to income for the college attendance of the parents, they do not limit the amount of the adjustment. Although paying for elementary and secondary education is more of a lifestyle choice than paying for a college education, it is more justifiable than paying for a boat or luxury vehicle. Moreover, to the extent that paying for this education is permitted as an adjustment, the full amount paid should be subject to adjustment because the funds are not available to the family to pay for the sibling's college education.

Typically the adjustment is implemented by including the amount of tuition on Worksheet C. This avoids any impact on the state and local tax allowance.

 

 
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