"The rules are what they are and we have to follow them."
I understand that, but to blindly accept them because a group of lawmakers decided thats the way its going to be even if it doesn't make sense, thats not how things get changed in the future.
the problem i see is that ROTH distributions are treated as income for financial aid calculations is wrong. Is it treated as income on the 1040? No. First of all, it is a return of contributions and converted amounts that have already been treated as income on the 1040 when they were made. Now 10 years later, what does this distribution have anything to do with income? None. If its the earnings (thats after all contributions and conversions have been exhausted), then i can see the logic.
if you take a 2nd job, then that income should definately be counted as income for financial aid. guess i am missing something because i'm not sure what you are saying in your example.