Do you make $400,000 a year but feel broke?

[Anonymous]

I think, PP, you are arguing that the schools should give the $400 HHI an incentive to attend, whereas those of us who think you are off your rocker are arguing that the $400k HHI family doesn't need financial aid. You are talking incentive, we are talking need. I can see where you are coming from (kinda sorta, since I'm that HHI $150k poster from up thread) but I really don't think you should need a financial incentive. The quality of the school should be incentive enough. If it isn't...meh. Don't come. It clearly isn't that important to you. My kid's school's goal with financial aid is to make it possible for everyone who wants to attend to do so. Not to make it comfortable, but to make it possible. I think that is right.

[Anonymous]

Pretty sure Mitt Romney is posting here.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Private school is a luxury. Not a need. You are off your rocker.

This is a different debate. Again, I understand that most support a system that only allows the very wealthy to attend private school, sprinkled with some lower SES students for diversity purposes, but I don't agree with perpetuating that classist system.

I don't understand--all children in the US are entitled to a free education between the ages of 6 and 18 (at a minimum). It's one of the few entitlements in this country. People can choose to spend their money on a private education, but how does the fact that education is expensive and therefore private education is primarily limited to the wealthy make it "classist"? I don't think it's classist that some people drive Mercedes or having bigger homes than me or do their shopping at Whole Foods. They make more money than me and that's how they choose to spend it. Same with private school.

The "classist" issue you should be fighting for is the major discrepancies in quality of public education driven by local funding and the reliance on property taxes, which vary significantly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Private school is a luxury. Not a need. You are off your rocker.

This is a different debate. Again, I understand that most support a system that only allows the very wealthy to attend private school, sprinkled with some lower SES students for diversity purposes, but I don't agree with perpetuating that classist system.

That just isn't true. The typical family with children in private school has an income lower than $400k. According to you, that is middle class. Just because you don't personally see the value at that income doesn't mean that other "middle class" families do not. They prioritize differently.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:But they are luxuries, especially when you are saving to the tune of 100k per year.

How is a family funding two 401ks and $24k of 529 saving 100k?

I'm assuming this poster is referring to 401ks with a $17,500 limit, not self-employment plans.

The total value of his savings, including 401ks and 529s = 100k.

no, we save 35+24k = 59k

[Anonymous]

Anonymous wrote:I think, PP, you are arguing that the schools should give the $400 HHI an incentive to attend, whereas those of us who think you are off your rocker are arguing that the $400k HHI family doesn't need financial aid. You are talking incentive, we are talking need. I can see where you are coming from (kinda sorta, since I'm that HHI $150k poster from up thread) but I really don't think you should need a financial incentive. The quality of the school should be incentive enough. If it isn't...meh. Don't come. It clearly isn't that important to you. My kid's school's goal with financial aid is to make it possible for everyone who wants to attend to do so. Not to make it comfortable, but to make it possible. I think that is right.

I generally agree with you - it's a question of exactly what level of burden you think is sufficient. No matter what the system, a family on $1M is going to feel no pain, so that's a given. It's really a question of what level of pain should that family with four kids on $400k (pretax), or your family with one kid on $150k (pretax), feel when they choose to prioritize tuition.

When I received financial aid growing up on a smaller income, the pain I felt was I had to spend my Saturdays and Sundays working to earn a few thousand dollars that I paid myself. If I had gone to public, I could have skipped that burden and had the additional 15 hours of free time. Similarly, my parents had to prioritize paying a few thousand dollars, which means that we might have cut out cable or things like that from our budget. Again, the aid I received was generous, but I was always invested as a stakeholder enough where I had to make some level of sacrifice.

Having grown up with nothing (and for example, had my parents literally die broke), I can appreciate the pain you'd feel if you were asked to pay $100k per year of $120k of available funds. That'd be a huge sacrifice, which might be the difference of being able to generate a comfortable retirement income of $10k per month versus one where you're generating $2k and supplementing with social security. If a family were to make that choice, similar to your family, they are heavily invested as a stakeholder and feeling the pain. In fact, I'd bet you that 99% of families in that situation would choose public, as it's too big an economic contrast.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:But they are luxuries, especially when you are saving to the tune of 100k per year.

How is a family funding two 401ks and $24k of 529 saving 100k?

I'm assuming this poster is referring to 401ks with a $17,500 limit, not self-employment plans.

The total value of his savings, including 401ks and 529s = 100k.

The poster will have to clarify, as they stated "max out 401ks, and contribute 24k/yr to 529s, but that's really it".

I'm interpreting that as $17,500 + $17,500 + $24,000. Good savings, but a far cry from $100k.

this is correct. I think that's what's wrong with this society. So many people see maxing out 401 and 529 as luxuries and not necessities! Heck, I don't think maxing out 401k is enough at 17.5k a year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Private school is a luxury. Not a need. You are off your rocker.

This is a different debate. Again, I understand that most support a system that only allows the very wealthy to attend private school, sprinkled with some lower SES students for diversity purposes, but I don't agree with perpetuating that classist system.

I don't understand--all children in the US are entitled to a free education between the ages of 6 and 18 (at a minimum). It's one of the few entitlements in this country. People can choose to spend their money on a private education, but how does the fact that education is expensive and therefore private education is primarily limited to the wealthy make it "classist"? I don't think it's classist that some people drive Mercedes or having bigger homes than me or do their shopping at Whole Foods. They make more money than me and that's how they choose to spend it. Same with private school.

The "classist" issue you should be fighting for is the major discrepancies in quality of public education driven by local funding and the reliance on property taxes, which vary significantly.

First, I'm fully on board with the proposals you're making to reform public education funding. I'd actually go further and bus kids to equalize schools by SES status, as de facto segregation currently ensures that the wealthy can surround themselves with other wealthy students.

The reason the financial aid system (at least as it's being described/defended here) is classist is it permits wealthy families to painlessly give their kids better educational opportunities, thereby perpetuating a legacy system that ensures the children of the wealthy will populate higher education at higher rates than other groups (regardless of individual merit). I don't think most founders of independent schools view were in it to create a "luxury" brand equivalent to a German car or organic produce. Most of them were in it for idealistic reasons related to how education should work - for example, they might have believed in a progressive model of teaching that's distinct from the status quo. Alternatively, they may have believed in integrating some level of religious teaching into a program. I think it's condescending to independent schools to compare them to a luxury good. But again, that's all irrelevant because private schools don't view their missions this way, so the question isn't whether every family should have an opportunity to afford private (the schools themselves say yes to this), it's how to modify the system to actually do it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Private school is a luxury. Not a need. You are off your rocker.

This is a different debate. Again, I understand that most support a system that only allows the very wealthy to attend private school, sprinkled with some lower SES students for diversity purposes, but I don't agree with perpetuating that classist system.

I don't understand--all children in the US are entitled to a free education between the ages of 6 and 18 (at a minimum). It's one of the few entitlements in this country. People can choose to spend their money on a private education, but how does the fact that education is expensive and therefore private education is primarily limited to the wealthy make it "classist"? I don't think it's classist that some people drive Mercedes or having bigger homes than me or do their shopping at Whole Foods. They make more money than me and that's how they choose to spend it. Same with private school.

The "classist" issue you should be fighting for is the major discrepancies in quality of public education driven by local funding and the reliance on property taxes, which vary significantly.

First, I'm fully on board with the proposals you're making to reform public education funding. I'd actually go further and bus kids to equalize schools by SES status, as de facto segregation currently ensures that the wealthy can surround themselves with other wealthy students.

The reason the financial aid system (at least as it's being described/defended here) is classist is it permits wealthy families to painlessly give their kids better educational opportunities, thereby perpetuating a legacy system that ensures the children of the wealthy will populate higher education at higher rates than other groups (regardless of individual merit). I don't think most founders of independent schools view were in it to create a "luxury" brand equivalent to a German car or organic produce. Most of them were in it for idealistic reasons related to how education should work - for example, they might have believed in a progressive model of teaching that's distinct from the status quo. Alternatively, they may have believed in integrating some level of religious teaching into a program. I think it's condescending to independent schools to compare them to a luxury good. But again, that's all irrelevant because private schools don't view their missions this way, so the question isn't whether every family should have an opportunity to afford private (the schools themselves say yes to this), it's how to modify the system to actually do it.

Ummm….most of the elite private schools were started to separate the wealthy/elite from the masses in the public schools. It's got nothing to do with the financial aid system.

[Anonymous]

Anonymous wrote:I think that's what's wrong with this society. So many people see maxing out 401 and 529 as luxuries and not necessities! Heck, I don't think maxing out 401k is enough at 17.5k a year.

Good point - in a system where pension plans no longer exist for the vast majority of people, your savings rates are absolutely necessary. People who think maxing out your 401k is a luxury are in for a rude awakening in retirement (which will often culminate in them needing government assistance if they live long enough to see a nursing home or have medical problems).

[Anonymous]

It's funny but I grew up working class, and now have HHI that is 10x what I had growing up, but I don't feel like my disposable income is that much greater. My parents didn't save for college (we got financial aid and worked) and didn't really save for retirement (he had a defined benefit pension which was not huge but is enough to keep them from starving, like most folks in his generation), plus he had decent health and dental plans through his job. We pay a ton of taxes (which I'm not complaining about), and put a ton of money into college funds and retirement plans, and have a ton of unreimbursed medical expenses. And real estate is also just so expensive around here, whereas I grew up out in the hinterlands where they aren't really jobs anymore. We do spend money on things like sports (but not travel sports!) and music classes, which may parents didn't really do, and we probably don't worry as much as they did about money. Maybe at some point I'll realize I over-saved and go on that expensive tour of Europe (where I've never been...), but now I'm totally paranoid about the cost of braces, college, retirement, etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think that's what's wrong with this society. So many people see maxing out 401 and 529 as luxuries and not necessities! Heck, I don't think maxing out 401k is enough at 17.5k a year.

Good point - in a system where pension plans no longer exist for the vast majority of people, your savings rates are absolutely necessary. People who think maxing out your 401k is a luxury are in for a rude awakening in retirement (which will often culminate in them needing government assistance if they live long enough to see a nursing home or have medical problems).

I think you are remembering back to a golden at of pensions and financial prudence that never existed. We don't max our 401k, and, while it would be nice, I don't feel like we need to, financially. Once we pay off the mortg and student loans, our expenses aren't that high.

[Anonymous]

Anonymous wrote:Ummm….most of the elite private schools were started to separate the wealthy/elite from the masses in the public schools. It's got nothing to do with the financial aid system.

If your view is that independent schools exist for the purpose of educating the wealthy/elite and that's how it should stay, that's fine, but then don't disingenuously make arguments about why families can afford it in situations where it's clearly not rational.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ummm….most of the elite private schools were started to separate the wealthy/elite from the masses in the public schools. It's got nothing to do with the financial aid system.

If your view is that independent schools exist for the purpose of educating the wealthy/elite and that's how it should stay, that's fine, but then don't disingenuously make arguments about why families can afford it in situations where it's clearly not rational.

Your argument seems to be that a family making $400k/year should have the same lifestyle as a family earning $800k/year, at least as far as school goes. They should feel the pain of paying for private equally.

I am a bleeding heart liberal, support higher taxes for people in my income bracket, give generously to charities and the private school, etc. I find your insistence that high income (but not the very, tip top) families should get subsidized absurd. The idea that a $400k income family doesn't need to prioritize/make choices and someone with more money should pick up the tab is really, really weird.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ummm….most of the elite private schools were started to separate the wealthy/elite from the masses in the public schools. It's got nothing to do with the financial aid system.

If your view is that independent schools exist for the purpose of educating the wealthy/elite and that's how it should stay, that's fine, but then don't disingenuously make arguments about why families can afford it in situations where it's clearly not rational.

Your argument seems to be that a family making $400k/year should have the same lifestyle as a family earning $800k/year, at least as far as school goes. They should feel the pain of paying for private equally.

I am a bleeding heart liberal, support higher taxes for people in my income bracket, give generously to charities and the private school, etc. I find your insistence that high income (but not the very, tip top) families should get subsidized absurd. The idea that a $400k income family doesn't need to prioritize/make choices and someone with more money should pick up the tab is really, really weird.

And the extrapolation to families making far less is offensive.