Donut hole families: Did you scrimp/save/take out loans to go to Ivies/Top privates?

[Anonymous]

If so, how did it work out socially for your kids? I get the feeling that these "top" privates and Ivies are filled with either kids that come from wealthier families that can easily afford to full pay or kids from families who quality for financial aid and can often go for low/no cost?

Were your kids able to connect with other kids or did they find it hard to find a peer group as both groups of kids come from different backgrounds? Personally, I found it difficult a number of years ago as I was in this position way back when and I'm curious if other kids from donut hole families found it as challenging as I did to find friends?

I'm not down playing the important of diversity at all and am all for having different friends from different backgrounds, but in reality I found it hard to fit in with either group and didn't find too many people from a similar background as myself to connect with.

I'm steering my kid towards a public for this reason (and for financial reasons, of course), but don't want to discount an option just based on my past experience.

How are your kids doing? No issues? Same kind of dynamic? Thanks!

[Anonymous]

No issues. He's has a a lot of friends of all demographics and types. I don't think it would occur to him that he doesn't fit everywhere. We are comfortable enough though that he can do any activity he's interested in including travel and nice meals. His school is on the low key side and sensitive about inclusion so flashy money behavior isn't cool or so I'm told. Really nice kids.

[Anonymous]

Inheritance.

[Anonymous]

The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

[Anonymous]

Anonymous wrote:The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

You are a "hole". Just because these people make a decent, not exorbitant living and some savings doesn't mean that they should be charged more than those who make the same income and spend everything, or "business owners" who catch a break because they claim terrible, just terrible operating losses on paper.

[Anonymous]

Anonymous wrote:The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

+1000

[Anonymous]

Anonymous wrote:

Anonymous wrote:The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

+1000

Go start your own thread to debate this issue. I’m looking for actual insight from people in this demographic. Thanks to the PP who responded.

[Anonymous]

Anonymous wrote:The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

There is, actually. There are plenty of data on this. And you are indeed a ‘hole.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

There is, actually. There are plenty of data on this. And you are indeed a ‘hole.

Not the person who posted this, but i would have thought the same for schools like the ivies, Stanford, MIT. They have huge endowments and tend to give rather generous need-based financial aid so I would expect that families who truly cannot pay would be taken care of. Is this not the case?

[Anonymous]

Anonymous wrote:

Anonymous wrote:The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

There is, actually. There are plenty of data on this. And you are indeed a ‘hole.

I don't really understand the "donut hole" thing either.

I been playing with the Harvard calculator for my family size (2 people, 1 in college) and assets.

The curve is smooth. The idea that people paying 70K on 255K income are somehow suffering because they're in a "hole", but people paying 68.5K on 250K are living large because of aid is absurd. The reality is that the first family still has more left, and they'll still have far more than my family who would pay 8.2K on 90K HHI.

[Anonymous]

No one answered the loan part of the ?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

There is, actually. There are plenty of data on this. And you are indeed a ‘hole.

Not the person who posted this, but i would have thought the same for schools like the ivies, Stanford, MIT. They have huge endowments and tend to give rather generous need-based financial aid so I would expect that families who truly cannot pay would be taken care of. Is this not the case?

Assuming that you will not permit your child to take out loans, then that is not the case.

A family with a HHI of e.g. $250K and two kids "truly cannot pay" $70K/year/child (and rising) for an undergraduate degree without taking out significant loans for that child. Or at least, this family can't. We have saved very aggressively, have forgone fancy vacations, shop at thrift stores, live in eastern MoCo, etc., and can handle (if we stretch) about $50K/child/year. If we took out loans to bridge that gap, each child would end up with about $80K in student loans. That is not acceptable to us. We are nearing retirement and will not take on that debt ourselves, either.

It used to be that if you could get into a given school, elite or not, the money would work out. Your parents could scrimp a little, and you could help - when I was in college in the early 80s and saved a couple of thousand dollars over each summer, I handed those earnings over to my parents to cover some of the college expenses. My elite school cost about $8K at the time, so my contribution was meaningful. Even if I'd taken out student loans, as many of my friends did, they would not have been crippling, because costs were reasonable.

A student today can expect to save about the same amount of money over a summer, maybe a bit more - but relative to the cost of a year of tuition at an elite school, it is a drop in the bucket.

Also, American incomes have been flatlining over that time.

My not-rich parents put five children through elite schools, debt-free. That would be impossible today for all but the top 1%.

This graph is startling:

https://trends.collegeboard.org/college-pricing/figures-tables/tuition-fees-room-and-board-over-time

See also:

https://www.theatlantic.com/education/archive/2014/04/the-myth-of-working-your-way-through-college/359735/

and:

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

There is, actually. There are plenty of data on this. And you are indeed a ‘hole.

I don't really understand the "donut hole" thing either.

I been playing with the Harvard calculator for my family size (2 people, 1 in college) and assets.

The curve is smooth. The idea that people paying 70K on 255K income are somehow suffering because they're in a "hole", but people paying 68.5K on 250K are living large because of aid is absurd. The reality is that the first family still has more left, and they'll still have far more than my family who would pay 8.2K on 90K HHI.

They will have more because they earn more than two times what your family does. It's not about what a given family has "left." It is about whether the EFC for a given family is realistic. For our family, it is not, and despite having saved almost $400K to put two kids through college, the gap between the EFC and what we can actually pay is just too large to bridge.

[Anonymous]

Anonymous wrote:If so, how did it work out socially for your kids? I get the feeling that these "top" privates and Ivies are filled with either kids that come from wealthier families that can easily afford to full pay or kids from families who quality for financial aid and can often go for low/no cost?

Were your kids able to connect with other kids or did they find it hard to find a peer group as both groups of kids come from different backgrounds? Personally, I found it difficult a number of years ago as I was in this position way back when and I'm curious if other kids from donut hole families found it as challenging as I did to find friends?

I'm not down playing the important of diversity at all and am all for having different friends from different backgrounds, but in reality I found it hard to fit in with either group and didn't find too many people from a similar background as myself to connect with.

I'm steering my kid towards a public for this reason (and for financial reasons, of course), but don't want to discount an option just based on my past experience.

How are your kids doing? No issues? Same kind of dynamic? Thanks!

I was a 'regular' middle class person who went to an Ivy, went to a DMV public school. My parents prioritized saving for college vs. vacations, cars, etc etc. More than half the kids at Ivys get some sort of financial (at Yale, for instance, it's more than 50% that receive financial assistance from the school & more than 60% receive some other form of financial assistance). It's a myth that everyone at any Ivy is super wealthy... yes, there are a portion of kids who are, but there's a huge range of kids at these schools. There is a large tier of kids like I was and my kids would be, who don't qualify for aid really but are living at our means. Overall, more like 75% to 85% are not 'super wealthy" (and not 15+% of kids are international). So, don't worry about it on those grounds, if your kid is thriving and bright and motivated and all that to get into the school, they be fine.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

There is, actually. There are plenty of data on this. And you are indeed a ‘hole.

I don't really understand the "donut hole" thing either.

I been playing with the Harvard calculator for my family size (2 people, 1 in college) and assets.

The curve is smooth. The idea that people paying 70K on 255K income are somehow suffering because they're in a "hole", but people paying 68.5K on 250K are living large because of aid is absurd. The reality is that the first family still has more left, and they'll still have far more than my family who would pay 8.2K on 90K HHI.

They will have more because they earn more than two times what your family does. It's not about what a given family has "left." It is about whether the EFC for a given family is realistic. For our family, it is not, and despite having saved almost $400K to put two kids through college, the gap between the EFC and what we can actually pay is just too large to bridge.

Different poster with the same puzzlement. Unless you have a business or lots of illiquid assets, the Ivies are often less expensive (net price) than publics. There is no cliff that cuts off financial aid from $50k to $0. At the Ivies, a family of 3 earning $180k will likely get $10-20k/year in grants. That leaves $50-60k/year in EFC plus work study and summer earnings. If you've saved $200k per child, that leaves a gap of $10-15k a year. While not particularly easy, I think most folks at that income level have the means to smooth that out without giving up the house or falling into bankruptcy. Though most of the Ivies have gone to no-loan aid packages, getting federal subsidized student loans (a maximum of $23k over 4 years) is pretty reasonable financial option and not very burdensome to recent grads. In contrast, no state schools will provide aid to a family earning that much, so you would carry the full $35k/year of in-state costs which is probably more than at the top schools.