Editorial: Easing the tax burden

Using information about income and assets, the financial aid office calculates how much each student can afford to pay. The University also calculates the cost of attendance, including personal and travel expenses, and then calculates a student’s need based on the difference between the two numbers. The student’s estimated tax obligation, however, is not included anywhere in this calculation, even though the bill is part of the cost associated with attendance — just like travel expenses — and clearly a personal expense. Essentially, the student is being asked to pay more than the University has calculated the student is able to pay.

It could be argued that just as the University does not try to offset the tax obligations of its employees, it should not attempt to do so for its students. But there is a qualitative difference between an employee and a student receiving financial aid. An employee receives payment, incurring a tax obligation, because the employee is providing a service. The student receives money from the University to provide for the student’s welfare and help cover the cost of attending the University, including both explicit and implicit costs. While there might be opposition to spending more money on financial aid, especially during these lean times, the University has made financial aid a priority as families increasingly struggle to finance their children’s education. Given that the University has promised to provide for a student’s entire cost of attendance, financial aid should include tax obligations as part of the cost of attendance.

The University’s current policy may be a deterrent to some students deciding whether to apply to or attend Princeton. Students with the most need often receive financial aid offers from several schools. If the student chooses a school with lower expenses in excess of tuition, the student’s tax obligation will be lower. The University strives to create a situation in which financial issues do not prevent a student from choosing Princeton, but the current policy could do more to support this effort.

Ultimately, the University must take into consideration the true cost of attendance, tax obligation and all, to truly fulfill a student’s financial need. While this policy change will not affect everyone on financial aid, it will make a real difference to those receiving a significant amount of financial aid, who will have the most difficulty finding $1,000 or more to pay their taxes this year.