Thoughts for 2005
Bill Long 12/17/04
Selective Irresponsibility is # 1
If I were to compose a "top 10 list" of things to accomplish in 2005, I would probably include some of the standard things, such as spend quality time with my kids, work out a little more regularly, and take more frequent vacations. Yet, as I pondered in my mind the real challenges for 2005, I think my biggest is to act a little more irresponsibly. This is harder to do than might seem at first; irresponsiblity comes as second nature to many, but it has never been my strong suit. But I am gradually beginning to realize the debilitating costs of being responsible, and I feel like I don't want to pay those costs fully in the future.
Thinking about 9/11
I really do not spend a lot of time thinking about the tragedy that occurred on 9/11/01 in NYC, Washington DC and Pennsylvania. Though many feel that this was a crossroads date in American history, and perhaps it was with respect to security concerns, the thing that enters my mind when I think about 9/11 is how it was the responsible people who were killed. That is, the attacks on the World Trade Towers in NYC happened about 8:30 and 9:00 a.m. The ones most likely to get killed were those who didn't stop to smell the roses. The ones killed were those who decided to get to the office early to take care of things, those who were conscientious in their activities. The ones who lived were the ones who dawdled and showed up late.
Ruminations about 2004
I have tried to live a responsible life, and I think that many positive things have come to me as a result of it. I don't want to list all those things now. But I have realized the cost of responsibility twice in the past few months. I will survive both of these lessons, but it makes you pause. Space only permits consideration of one here.
One lesson encouraging irresponsibility comes from my experience of "saving for college." I have two children. The older, Sydney, was a Phi Beta Kappa graduate from the U of Oregon (2004) and is now establishing herself in the magazine business in NYC. My son, Will, will graduate from high school in 2005 and is now applying to elite Eastern colleges. One reality about those colleges is that they cost loads of money, now more than $40,000 per year.
During the 1990s, when I was married and when the stock market was rising, I decided to set up an account for my son, under the Oregon Uniform Gifts to Minors Act, for his college costs. I was being very responsible. Over the years that account has grown so that there is a sizable (but certainly not sufficient) amount to pay for his college. The beginning of the present decade, however, saw the market plummet (along with my holdings) and saw me get divorced, with half of everything going to my ex. In addition, I gave up my law job in Portland in January 2003 and took part-time jobs in Salem because life was becoming unmanageable as a single parent of a teen when I was working 50 miles away. Thus, my financial house of cards collapsed, though the custodial account for my son, after a perceptible dip for three years, continued to climb.
So, now I am filling out the FAFSA form, that staple of college financial aid programs and officers. You have to report income and assets of both parent and child on the form. Armed with this insight, FAFSA then recommends a financial aid amount to the individual colleges, though they are free to set their awards in any manner they desire. I learned at a school-sponsored forum last week that FAFSA calculates aid recommendations based on the following general formula: parents are expected to pay 6% of their assets per year for the child's college costs and the child is expected to pay down 35% of assets per year for education.
All of a sudden I felt screwed. My assets exceed those of my son, but they are not 6X his assets. I would have done far better by setting up an account in my own name and just putting money aside each year for his expenses. For example, if he now has $80,000 in his college fund, he is responsible for paying 35% of that the first year, or $28,000, toward college. If the money had been under my name, I would have to spend less than $5,000 per year for him.
There are tons of reactions to my situation, many of them from "older sons"-types of people (referring to the parable of the Prodigal Son) who themselves have always been responsible. Their response is, "Well, Bill, you set it up for Will's college education; now it is time to pay for that education." In other words, you knew the rules when you went into the deal; so pay up, buddy.
Yet, I didn't know the rules in 1992 or 1991 or whenever I set up the account. No one did. The only thing that was "in the air" at that time was the importance of "saving for college." I could do "one better" than my parents, who were put to some financial inconvenience to pay for my college, by setting up accounts for my kids. So I did. But, then the rules seemed to change (or maybe it was my reaction to a rising stock market, too). The changing rules required a larger chunk of his money than mine. Because the instrument was an irrevocable transfer (as we lawyers call it), I had limited options regarding the fund.
Because I am a responsible person, I will report the amount that is in the account to FAFSA and will probably therefore not be in the position to get financial aid (or a smaller amount of it) because of it. Had I sunk the money into a big house; had I spent it in "riotous living" (like the Prodigal); had I kept the money under my own name; had I done really anything other than be responsible, I would be in a far better financial position with respect to funding my son's education than I now am. Well, I guess I am helping to support those prodigals for whom the fatted calf will be slain as they drink and make merry upon their return.
So, how can I act more irresponsibly in 2005? I don't know yet. Personal self-discipline is important to me, and I don't want to abandon that. I think I will still pay the bills on time. So, I don't yet know how I will explore irresponsibility. Any ideas? Maybe once you are an "older brother," you can't be anything other than that. But, I know now, first-hand, why there is such an incentive to fraud in higher education financial aid, and why it is not such a sin to be irresponsible.
Copyright © 2004-2007 William R. Long