On paper, most full-time college students appear to have little to no income.

Take these three examples:

  • Student A: Both parents are working, the bills are paid, but there’s not a lot of room for extras. That’s the financial demographic my daughter fell into.
  • Student B: The family is on food stamps. That’s the financial demographic one of my daughter’s friends fell into as she started college.
  • Student C: The family earns two or three times the median income. That’s the financial demographic some of my other daughters’ classmates fell into.

If you look at only the students’ finances, they would look pretty much the same on paper.

In fact, you might find that Student A has more taxable income in her own name than Student C. Reason: my daughter worked part-time on campus to help pay her expenses and also had paying jobs three out of her four undergraduate summers.

But Student C, who is from the wealthier family, had the luxury of not having to work to earn spending money or pay her living expenses. The taxable income in her own name could very well be nothing!

Now that you have the background about college finances that I’ve explained in the past, read this piece at Planet Money: A college kid, a single mom and the problem with the poverty line.

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