Why do donut hole families

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of us got into the financial position to be in the donut hole by doing "everything right" being top students all through school, getting into a highly selective college, graduating, working for years to move up the corporate ladder, saving for college every month since our kids got out of daycare, provide the enrichment/tutoring/house in a top school district that allowed our kids to do well enough to get into a top college. But now we can't afford to send them to the top college on the level that we attended.

I know, cry me a river. It's such a deeply privileged sob story.

This. My college was expensive at about $100K for 4 years. To send my kid there now, it's $400K.

You are not the sharpest tool if you send your kid to a school that costs 100k/yr. This is like buying a Birkin bag and complaining how expensive handbags are these days.

I agree, only idiots send their kids to Stanford

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Some families who seem to complain about this are people who had a fancy education but chose not to take a private sector job in DC for the fed/non-profit lifestyle and are now aggrieved that schools won't make up the difference for them because they want to l live an UMC lifestyle they assume their education entitles them to - this comes up in the college and private school threads. We make trade offs in our lives only each family can figure out what works for them - there is alot of merit aid sloshing around for high performing students just a few rungs down the ladder - no one is entitled to go to any school they want.

So true. I’ve noticed that the majority of the time, those who complain went to fancy schools themselves. As someone who went to Big State U I find it so confusing—the school I graduated from costs under $10k/yr in-state still. Not exactly crisis levels.

Big state U in Virginia is 40k a year.

But there are instate schools that are more affordable. And if your kid could get into UVA, they will likely get merit at some other in-state schools.

However, a kid can earn $10K/year to contribute to college, take $5.5K in federal loans, so cost would be $25K left. If you don't have that saved, then UVA is not for you. Simple fact, but there are other ways to get an affordable degree.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s really irritating that you have to pay $80k a year and there is no way it actually costs $80k a year. You are subsidizing all the kids who pay less than $80k a year. There is no way I can afford to pay $80k a year.

Luckily, you don’t have to pay $80k a year. No one has to pay $80k a year, there are tons of lower cost options available.

Then why won't financial aid families send their kids to those colleges?

Because for many of us, the most elite schools are the cheapest options.

I ran calculators for my kids (still a few years away from college). Harvard (which I ran for fun, my kid won't get in there) came in about 20K less than UMD. The amount UMD came in at would mean that I, like the families complaining about "donut holes", would need to either take major loans (beyond Federal loans) or mortgage our homes, or move to a cheaper home. Except since my current home is a 2 BR condo in a decent school district, moving to a cheaper place would be a 1BR where I'd need to change younger sibling's schools.

So, yes, if my kid gets into Harvard, he will go. More likely he'll do 2 years at MC and then a state school, or he'll go somewhere where he get a combination of merit and need based aid that makes it affordable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

“You have nearly two decades to save” - what?? Two decades ago, no one thought colleges would cost $90K/year. No one saved at that rate PER KID back then, if they were also paying off student loans, buying a house, etc.

Yes, 2 decades ago people did anticipate colleges would cost nearly this much. Simple college cost calculators would tell you that. Not to mention, along the way you could tweak your estimates upward. 20 years ago our Financial advisor estimated that "mid level"/OOS at UVA would be $50-55K/year and high end would be $75K/year, with In-state /low cost being $25-30K. That's fairly close estimate. college cost estimators gave similar results.

Don't buy a house until you can pay off your student loans, don't have more kids than you can save for college for, make your choices and then you get to live with your choices.

So you want crashing demographics now?

[Anonymous]

TAXES!!!! This is not 80k/ year extra.

Anonymous wrote:

Anonymous wrote:I think it’s insane that our $250K family did not get 1 penny FA for a $60K/year school.

We were also not always $250K family, we were closer to $160/year, then $180K for a few years. Plus the $250 includes one of us having 2 jobs.

My H is a cop and I was a GS-13 most our lives so we could not really save that much.

Well if you still lived as if you earned $160K/year, you could cash flow the $80K/year with the extra. You could have chosen to save the increases in income for college (or at least part of it).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

I actually agree with you. So background, we have $250k HHI, $3M investment portfolio, house paid off.

Yeah, we can afford any college. Probably. For three kids though??

And is private or out of state worth it? No, I don't think so.

If we made $600k, that would be a different story. If we had $6M in stocks instead of $3M, that would also be different.

So I think we've made decent choices along the way about cars and houses and whatnot. But I consider us donut hole because we're too wealthy for financial aid, but not wealthy enough for a $350k undergraduate degree to be a drop in the bucket.

Once again, it's about choices. You choose to have 3 kids. We looked at the full cost of raising kids when we decided to stop at 2, with college costs being a huge reason. Our kids are 4 years apart, so only 1 would likely be in college at the same time.

If you truly want your kid to attend a T20, you have the money and could redirect it that way. I agree---I would not spend that much in your financial situation. I'd have the kid go instate or search out private schools that offer merit (you can find this in the 30-100 rankings, if you search). You have decided that ~$40-50K/instate costs is what you are willing to spend, and that is OKAY (and a smart choice). You choose to have 3 kids, so you are looking at $600K all in for in-state---if you only had 2 kids, you might choose to spend the same $600K and send them to $80K schools.
But in grand scheme, you and your kids are extremely privileged. You are in the top 1-2%.

All of this but also who are these storied families for whom $350k is a “drop in the bucket”? No one ever said the expectation is that you should only have to be full pay if you wouldn’t even notice the expense. The expectation is actually that it takes sacrifice to send your kids to school. Low income families are struggling to come up with the plane ticket price. Full pay families are certainly pinched by COA.

Yup! Nobody is entitled to a T20 education. But we are lucky that most people can find an affordable way to get a college degree. CC start is a good way to do that.

[Anonymous]

They feel like they're getting screwed for working hard. They know they're more deserving than the poor people. If the poor people weren't lazy, they wouldn't be poor. QED.

They probably don't have a clear idea of who the rich people are or how they got their money, but it was probably inheritance, financial manipulation, tax avoidance, or something similarly lacking in merit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

But that's the problem, college expenses have become exploitative for most family budgets. As PP suggests, your entire adult life you're now supposed to be either saving for college or paying off your loans. It's basically become a third layer of taxation in addition to state and federal.

College costs are INDEFENSIBLE here in the US. No other country in the world has such expensive university education, and yet many have excellent institutions. It IS exploitative.

It's like the cost of healthcare in this country. It does not need to be that high! Other wealthy nations do it for much less.

But here capitalism rules, the federal government has very little regulatory control compared to other countries... and we are left with this. Very little upward mobility in an erstwhile upwardly mobile country.

So you're all right where universities want you, suckers: bickering amongst yourselves, and forgetting that you are all being exploited BY THEM.

+1

Only in the US would people compare a university education with a luxury car.

Uh huh. In Germany they don’t have a “Lambo” of education. Everyone goes to the Honda of education and it’s fine.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of us got into the financial position to be in the donut hole by doing "everything right" being top students all through school, getting into a highly selective college, graduating, working for years to move up the corporate ladder, saving for college every month since our kids got out of daycare, provide the enrichment/tutoring/house in a top school district that allowed our kids to do well enough to get into a top college. But now we can't afford to send them to the top college on the level that we attended.

I know, cry me a river. It's such a deeply privileged sob story.

This. My college was expensive at about $100K for 4 years. To send my kid there now, it's $400K.

You are not the sharpest tool if you send your kid to a school that costs 100k/yr. This is like buying a Birkin bag and complaining how expensive handbags are these days.

I agree, only idiots send their kids to Stanford

Pretty much when the same kid can get into uva.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

But that's the problem, college expenses have become exploitative for most family budgets. As PP suggests, your entire adult life you're now supposed to be either saving for college or paying off your loans. It's basically become a third layer of taxation in addition to state and federal.

There are more affordable ways to do it---just not at schools ranked in T20-30. There are ways to only pay $25-30K/year or less. My average student (1200 SAT) had several offers that were only $30K/year from $70K+ schools. If they can find it, so can you (hint: we were not searching merit---but got many great merit awards, imagine what could have happened had we actively been searching---my avg/slightly above avg kid could have attended college for under $20K if we had needed that)

[Anonymous]

Anonymous wrote:
TAXES!!!! This is not 80k/ year extra.

Anonymous wrote:

Anonymous wrote:I think it’s insane that our $250K family did not get 1 penny FA for a $60K/year school.

We were also not always $250K family, we were closer to $160/year, then $180K for a few years. Plus the $250 includes one of us having 2 jobs.

My H is a cop and I was a GS-13 most our lives so we could not really save that much.

Well if you still lived as if you earned $160K/year, you could cash flow the $80K/year with the extra. You could have chosen to save the increases in income for college (or at least part of it).

But they don't need $80K extra to be in the same position they would have been in when they made $160K. They need enough extra to cover the $10K or $20K they might have gotten in need based aid at that income. And $90K extra income translates to more than $10K or $20K after taxes. So, they're in a better situation, not a worse one, than someone making $160K. Which makes this not a "donut".

[Anonymous]

Anonymous wrote:

Anonymous wrote:Complain about being a donut hole family? When there are thousands of colleges that could work between in state options and merit aid at lower tier privates and other oos public’s?l is it bc ivies and top 25 are not options?

Its because their kids don't get judged on their ability but on their parental assets and can't attend schools they are eligible for or want to attend. Unless parents are willing to sacrifice their hard earned savings and risk retirement , kids often can't afford anything but community college or some regional state campus with merit.

A true donut hole family should be able to afford $20-30K/year with savings and cashflow. That's well more than CC. Plenty of choices if you just try rather than complaining "we can't afford anything"

[Anonymous]

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

THIS is why these families complain. I don’t see people on here begrudging anyone their FA. But comments like this from the rich are insulting and untrue. But please continue.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Some families who seem to complain about this are people who had a fancy education but chose not to take a private sector job in DC for the fed/non-profit lifestyle and are now aggrieved that schools won't make up the difference for them because they want to l live an UMC lifestyle they assume their education entitles them to - this comes up in the college and private school threads. We make trade offs in our lives only each family can figure out what works for them - there is alot of merit aid sloshing around for high performing students just a few rungs down the ladder - no one is entitled to go to any school they want.

So true. I’ve noticed that the majority of the time, those who complain went to fancy schools themselves. As someone who went to Big State U I find it so confusing—the school I graduated from costs under $10k/yr in-state still. Not exactly crisis levels.

Big state U in Virginia is 40k a year.

Tuition. I said tuition.

Now if you don’t like Virginia? Don’t live there. I don’t.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

That's not true. College costs have increased so much families can't hope to deny themselves every luxury to meet that cost. We're fortunate that we can afford any college, but most people can't, even if they tighten their belt.

Please don't be so ignorant and smug.

But they can afford MOST colleges. So instead of complaining they can't afford the most expensive ones, they should focus on the hundreds of great colleges they can afford and recognized how privileged that is.

I can't afford a $100K car, so I don't complain about it, I don't buy it, I find a Honda/Toyota for $25-30K that is a great car and buy it.

Which is why kids are going to SEC schools

there are many options besides SEC schools. But yes, choose whatever you like best that you can afford. There are many options out there for good students. You may need to step down just "1 tier" but your smart kid will still get an amazing education. It's what they do while at college that matters.

What are those options?

Going to Salisbury you mean?