Donut hole reality

[Anonymous]

Anonymous wrote:

Anonymous wrote:A universal cutoff number for need based aid is ridiculous when it does not take into account cost of living. $150k in Oklahoma is much different than San Fran or DC.

The latest findings:

Here's a look how much income a family of four needs to live comfortably in the 20 most expensive U.S. cities: 
San Francisco: $339,123
San Jose, California: $334,547
Boston: $319,738
Arlington, Virginia: $318,573
New York City: $318,406
Oakland, California: $316,243
Urban Honolulu, Hawaii: $299,520
Irvine, California: $291,450
Santa Ana, California: $291,450
Portland, Oregon: $289,786
San Diego: $289,453
Chula Vista, California: $289,453
Newark, New Jersey: $285,043
Jersey City, New Jersey: $285,043
Seattle: $283,712
Aurora, Colorado: $280,467
Long Beach, California: $280,218
Anaheim, California: $280,218
Los Angeles: $276,557
Washington, D.C.: $275,642

We live very comfortably on $150 or less.

You are a statistical anomaly. Likely no issues supporting other family members, or hardships, etc

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Having been through this process, and saved quite a bit towards college, we still chose public school as do many people in our financial situation. The biggest problem with the belief that "donut reality" means being shut out, is letting rich people convince you that expensive is better. Despite what US news claims, in reality, a kid can have the fabulous life and a quality education and not deplete their parents of every cent they saved, plus take on debt and undue stress, for an undergrad degree.

And they should stop reading this forum and the private school forum immediately .

So many prestige strivers. We had kids get into top 10 schools, but with no aid and enough in 529 to fully cover in-state tuition. They chose the in-state option.

Frankly, the tables are turning. More and more high stat UMC families are no longer paying for private/ivies. The top in-state schools are getting stronger and stronger as a result. Add in the fact that many top employers have stated that they would rather have a top state college kid than many of the Ivies and you really are going to see a shift.

The high cost of tuition has reached a tipping point. It seems $85-90k is it. It will be six-figures a year for privates by the time a Freshmen makes it to Senior year.

Now you only have the poor and the uber rich at Ivies which is an awful dynamic, but mirrors the US.

And it's crazy. We drive only Hondas. We have one that is a 2006, in addition to a 2020. We aren't wearing fancy clothes or traveling to Europe. Travel sports are the biggest expense.

Yeah, middle class kids aren't doing "Travel sports". That is typically $5-10K+ per year. So see, you could have easily saved $5-10K/year for college, you chose not to. Most rec sports do not cost more than $500/year.

beg to differ. MANY middle class kids are doing travel sports. they shouldn't be, but they are.

[Anonymous]

Anonymous wrote:There is a thread like this every year. The top privates have no problem finding full pay kids.

Of course they don’t. My dd was full pay and her friends were mixed, financial aid, full pay, merit scholarships. They talked about money but weren’t making friends based on anything financial.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A universal cutoff number for need based aid is ridiculous when it does not take into account cost of living. $150k in Oklahoma is much different than San Fran or DC.

The latest findings:

Here's a look how much income a family of four needs to live comfortably in the 20 most expensive U.S. cities: 
San Francisco: $339,123
San Jose, California: $334,547
Boston: $319,738
Arlington, Virginia: $318,573
New York City: $318,406
Oakland, California: $316,243
Urban Honolulu, Hawaii: $299,520
Irvine, California: $291,450
Santa Ana, California: $291,450
Portland, Oregon: $289,786
San Diego: $289,453
Chula Vista, California: $289,453
Newark, New Jersey: $285,043
Jersey City, New Jersey: $285,043
Seattle: $283,712
Aurora, Colorado: $280,467
Long Beach, California: $280,218
Anaheim, California: $280,218
Los Angeles: $276,557
Washington, D.C.: $275,642

We live very comfortably on $150 or less.

You are a statistical anomaly. Likely no issues supporting other family members, or hardships, etc

We supported my mil and I could not work as we could not afford care as I was the caretaker. And, a special needs kid plus my own health issues. We’ve had it all. Stop acting like those things justify your lack of savings.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Having been through this process, and saved quite a bit towards college, we still chose public school as do many people in our financial situation. The biggest problem with the belief that "donut reality" means being shut out, is letting rich people convince you that expensive is better. Despite what US news claims, in reality, a kid can have the fabulous life and a quality education and not deplete their parents of every cent they saved, plus take on debt and undue stress, for an undergrad degree.

And they should stop reading this forum and the private school forum immediately .

So many prestige strivers. We had kids get into top 10 schools, but with no aid and enough in 529 to fully cover in-state tuition. They chose the in-state option.

Frankly, the tables are turning. More and more high stat UMC families are no longer paying for private/ivies. The top in-state schools are getting stronger and stronger as a result. Add in the fact that many top employers have stated that they would rather have a top state college kid than many of the Ivies and you really are going to see a shift.

The high cost of tuition has reached a tipping point. It seems $85-90k is it. It will be six-figures a year for privates by the time a Freshmen makes it to Senior year.

Now you only have the poor and the uber rich at Ivies which is an awful dynamic, but mirrors the US.

And it's crazy. We drive only Hondas. We have one that is a 2006, in addition to a 2020. We aren't wearing fancy clothes or traveling to Europe. Travel sports are the biggest expense.

Yeah, middle class kids aren't doing "Travel sports". That is typically $5-10K+ per year. So see, you could have easily saved $5-10K/year for college, you chose not to. Most rec sports do not cost more than $500/year.

beg to differ. MANY middle class kids are doing travel sports. they shouldn't be, but they are.

Mine do expensive activities. It is our one splurge. Real middle class aren’t doing real travel sports.

[Anonymous]

Anonymous wrote:^^And in large cities, housing costs often exceed 30% of a household income, leaving little room for other necessities like utilities, food and transportation.

If your income is insufficient to pay for things like food and utilities, you are definitely qualifying for financial aid.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Too much whining. There are also cars that cost $400,000. If you don’t want to pay that, there are reliable options that are a fraction of that. Same with colleges.

Community colleges, GI Bill, colleges away from the coasts, graduate in 3 years etc. Out-of-state merit aid at large public universities in unglamorous states can be amazing even if kid isn’t brilliant.

Your analogy is stupid. People do not need a luxury vehicle. Education is necessary. And when you have certain families cut out of the "luxury" market, while subsidizing others who will get to go to those institutions for free or low cost, that is the sign of a problem. It should not be this way for anyone.

That’s capitalism. What you’re asking for is a socialist program. States are getting much better about subsidizing or paying for trade degrees that will qualify graduates for a career. But private schools can accept the top students regardless of their ability to pay. No one is forced to go to these schools.

No college is taking a student because he is low income. He’s accepted to the college based on his hard work and given aid to attend. He has nothing to do with your child not being accepted or not being offered any scholarships.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:That’s not donut hole. That’s a comfortable family. The rest of our kids go to state schools.

This. If you have sticker shock, but the ability to pay you aren't really a donut hole.

Ability to pay is often at the cost of liquidating retirement funds, home equity, life style and nursing home savings.

Shouldn't be. The top schools have excellent need based FA. Many who would be a fafsa doughnut hole would get FA. To be paying full price means, you are well off in earnings and non-retirement assets. Even home equity is often capped (not 2nd or 3rd home of course).

The real problem is failing to save. No one should expect to cashflow college. We started saving when kids in elementary and thought we were late to the game.

Bullsh. First of all, by the time you get to college aged kids, you may be making the most salary you've made. But almost no one makes that their entire career. We saved and save a LOT. We have old cars. No second home. No generational wealth. We have good retirement. Those are the things we've funded: college and retirement.

But all of those things are counted against us, as if we can cashflow $50-90k/year. We can't. And we aren't getting aid. We've made our peace with the schools are high stats kid can go (based on finances) and have had to forego much better schools b/c of money. It should not be this way.

I get that those of you not as well off like to dump on higher earners (UMC) to make yourselves feel better. But we've done everything right. Both coming from just above poverty line upbringings. The "American Dream" of work hard and good things flow from that is a bunch of horse sh-- when it comes to college admissions and sending your kids to the best school. The very wealthy get that opportunity. The poor get that opportunity. No one else.

You’re not a high earner if you can’t take afford monthly payments to make up the deficit on what you saved. Welcome to the middle class where you’re on your own.

[Anonymous]

Anonymous wrote:30-40 years ago people did cash flow college educations. No one “saved from birth” to send multiple children to college. Why did that change? When did financial aide mean here you go - take out loans? And once the student maxes out their allotted loan amount - here are special loans for the parents? Why do colleges enable this?

People still do it. We will do it for our kids, one already in private school and my sister does it for her two in state public colleges. Quite a few actually now that I think of it. Maybe some took out a home equity loan, not sure. I don’t think we are in the minority either.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We hired a financial planner when DC was born 13 years ago. We were told that when DC is 18 that a 4-year private college would be about $500k. Could not believe it then, but looks like that is accurate. Crazy.

Yep. We are financial planners and opened up 529 accounts before our kids left the hospital. $500 a month until daycare / preschool costs were done and then $1200 w month per kid thereafter. We drive 10 year old cars. Also max out retirement contributions. We spend on vacations but not material goods ( I do not have any expensive purses or shoes and shop at Marshall’s and Kohls).

We have $400k for each kiddo saved.

As financial planners you should understand the concept of risk. At birth you were confident both of your children would attend private 4-year universities? Your plan actually seems like overkill.

That’s one reason so many people don’t use 529 accounts. Not worth the risks and money can grow faster in other ways.

[Anonymous]

Anonymous wrote:

Anonymous wrote:People need to vote with their feet. We are quite wealthy, but our son goes to UVA because the similar private alternatives are simply a waste of money. The middle class has been sold a giant scam - don't capitulate.

Agree on the middle class...but anyone "quite wealthy" (except for the guy on the grand estate serving boxed wine to explain how he go so rich) doesn't care about the marginal difference between UVA and any other school. Especially for engineering...why would I sweat the difference between $50k in-state at UVA and say $85k at MIT or Stanford?

Exactly. Don’t believe someone who is “quite wealthy” would be turning down MIT or Harvard or Stanford because that would be a waste of money.

[Anonymous]

“No college is taking a student because he is low income. He’s accepted to the college based on his hard work and given aid to attend. He has nothing to do with your child not being accepted or not being offered any scholarships.”

1. Low income is indeed part of what someone may be accepted to a college given USNWR gives you bumps for number of tell grant kids.

2. Of course financial aid kids impact those not getting financial aid. The latter are being asked to cross subsidize the former through higher tuition.

[Anonymous]

Anonymous wrote:A universal cutoff number for need based aid is ridiculous when it does not take into account cost of living. $150k in Oklahoma is much different than San Fran or DC.

The latest findings:

Here's a look how much income a family of four needs to live comfortably in the 20 most expensive U.S. cities: 
San Francisco: $339,123
San Jose, California: $334,547
Boston: $319,738
Arlington, Virginia: $318,573
New York City: $318,406
Oakland, California: $316,243
Urban Honolulu, Hawaii: $299,520
Irvine, California: $291,450
Santa Ana, California: $291,450
Portland, Oregon: $289,786
San Diego: $289,453
Chula Vista, California: $289,453
Newark, New Jersey: $285,043
Jersey City, New Jersey: $285,043
Seattle: $283,712
Aurora, Colorado: $280,467
Long Beach, California: $280,218
Anaheim, California: $280,218
Los Angeles: $276,557
Washington, D.C.: $275,642

If you can’t afford to live there, then don’t live there. I can’t afford a Bentley, so I drive a no-frills Escape.

[Anonymous]

Anonymous wrote:“No college is taking a student because he is low income. He’s accepted to the college based on his hard work and given aid to attend. He has nothing to do with your child not being accepted or not being offered any scholarships.”

1. Low income is indeed part of what someone may be accepted to a college given USNWR gives you bumps for number of tell grant kids.

But no one is getting admitted who is not unqualified. No one is getting admitted solely because they are poor. Colleges may feel that a kid who grows up with the handicap of poverty but still excels is a stronger candidate than someone with the same stats but has been given every opportunity. Do you not get that? Or do you just not want to?

More importantly - most of the elite schools we are talking about here are need blind. So on those you are wrong twice.

2. Of course financial aid kids impact those not getting financial aid. The latter are being asked to cross subsidize the former through higher tuition.

Wrong again! In need blind schools there is no correlation, admissions are done independently from financials and then the financial aid budget is doled our but a completely separate group. It has way more to do with endowments than current income from tuitions. Learn how this works before you post again.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My DS chose a nice public school in another state. 50K. So half of BC. We were ready to pay more, and have plenty in our 529. But this is a nice savings.

But I honestly don't know why donut hole families would pay 100k. It must be ego. There are plenty of good schools at half the price.

You are getting what you pay for mostly in the community you are buying into. Small, cohesive, resources, etc...

With all due respect, your post seems like you haven’t actually visited a large public university. It is not what you expect (or I expected).

Money is thankfully not an issue for us. We were expecting to pay $100k and have saved. DS did get into several privates (though not top 20)

I really can’t stress enough to donut hole families to at least look at public universities. You will be surprised. And many offer good merit.