What is a "donut hole family"?
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Anonymous
| Could someone please explain, because it sounds like people with nice resources feeling entitled to more than they can afford. |
Anonymous
| Typically a family that makes more than what qualifies for need-based aid but not enough *income* to pay tuition out of pocket without it having a huge impact on their lifestyle. Usually they don’t want to liquidate assets to make up the gap. |
Anonymous
| People who do not qualify for financial aid, but whose real economic situation means they can't afford expensive colleges even if their kids are admitted. They are the families whose kids turn down Carnegie Mellon and take the merit award at Pitt. |
Anonymous
| No, you nailed it. It’s people who have enough money but because of other choices they made, don’t have it available for other choices they wish they could make with respect to expensive schools. |
Anonymous
Right, because it makes no sense to sell your house to send a kid to Harvard undergrad, when a mid-rank college is giving your kid a full ride merit scholarship. |
Anonymous
And boy are they mad. So so mad. |
Anonymous
No. It is a family that won’t qualify for FA but that doesn’t have the resources to reasonably handle tuition at the priciest/most elite colleges. I don’t know about families feeling entitled, but from the colleges’ standpoint it is a real problem that they are concerned about. They don’t want their student populations to come from two stratified socioeconomic groups. |
Anonymous
If it’s so obvious what they should choose, why are they so mad about choosing it? |
Anonymous
| Do you have to qualify financially for merit aid? |
Anonymous
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new poster here
Wow. I thought we were a "donut hole" family but I guess not. What is a step below "donut hole" called? We make too much to qualify for aid, but paying for an expensive school would involve far more than "liquidating assets." It would be more like taking on a second full time job, skipping at least one meal a day, absolutely zero entertainment budget (not even cable tv or netflix) etc. |
Anonymous
So why is this a problem? Statistically, it seems highly likely their resources are what enabled their kids to become high achievers in the first place. If they can't afford the tippy top status colleges, what is wrong with being "the best" at what they can afford? |
Anonymous
Well, there is this thing that you had 18 years to save for college. Which is what most people do. |
Anonymous
This most closely describes the issue in an unbiased way. While I don’t expect massive FA, we also can’t comfortably pay for expensive private college. The colleges take into account all assets, which is great. No one should get to hide their wealth in a boat purchase. At the same time, we can’t liquidate our retirement savings. We would have to pay penalties. The government has penalties to discourage using your retirement money for non-retirement. So, we find ourselves in a spot where savings that we can’t use without expensive penalties is used to indicate we have “too much” money. Meanwhile, our cash flow is not high, so it’s hard to swing the full cost. Before people call me a whiner or tell me how lucky I am, I know I am lucky. I’m not complaining. We could empty our retirement accounts, but it would then lead us into poverty and that doesn’t help society or ourselves. |
Anonymous
No Netflix?? Surely you are kidding. You are basically describing what lower income families sometimes do to afford even state schools. |
Anonymous
You're assuming stagnant incomes. We have a HHI of about 225k and one in 7th and one in 8th. Three hears ago HHI was 150k. When the kids start college it will be about 250k if we continue on the same track. 160k a year in tuition is both not possible and not a number that we ever could have saved for on our incomes. |