ok, don't crucify me.. question about financial aid.

[Anonymous]

Anonymous wrote:Genuine question here. I'm the PP who puts a substantial amount aside for retirement. What do you think is an appropriate amount? Do you think that I should be saving zero for retirement? Because that's pretty much the same as saying that middle-class FA shouldn't exist, because prudent parents would never take that deal.

What about people with pension plans, not 401ks? Should some kind of extra income be imputed to them?

You're making some fine judgements here. I suggest that the FA departments also care about fairness and sustainability, and that they make these decisions with their years of experience in mind.

Genuine question here. What about families that don't even have jobs providing 401ks? Or don't have enough to full pay for private, let alone even think about setting money aside for retirement? How much FA should they be getting compared to you?

[Anonymous]

Anonymous wrote:-$340k income
One is $155 base with $135k in bonus potential which has never paid less than 75% in the past but revenue is on the decline and comp and headcount are often the first targets.
One is $50k govt worker
We are both the first to go to college, both from poverty, no parental help but we help our parents out financially
-$100k equity with $120k HELOC debt on a home worth $350k
-$200k 401k
-$20k stock
-$8k savings
-$300k unvested stock
-2 cars 2007 and 2011
-three Af Am/Hispanic kids one highly gifted
-$155k in student loan debt between us
-$6k summer camps
-PreK-8 school tuition and aftercare $45k for all three
-$2k other swim lessons, sports activities
-$80k credit debt between us

We are not expecting aid but will still apply. Will also consider 1) parochial or other schools that go through 12th after we leave our current school that are at a similar price point as we are paying now (if any exist), 2) paying for a good public school and 3) renting a home/apartment near a good public school as another option. Hoping we can stay private through 12th but don't think we can do it if more than $20k per kid.

i may get flamed for this, but I'll take the chance.

PP seems like a great example of people whose choices should not make them eligible for FA, but who will probably get it. They make $205k/year, with the potential for at least $100k more, and are living way above their means. They have three children (so likely aren't incredibly young) and have SIGNIFICANT debt -- $245k, not including mortgage. They are paying more for school/aftercare/camp than one of the parents' salaries.

Great that the parents are looking at less expensive schools, but they might be better off (financially) to move to a great public school system NOW, way before high school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:-$340k income
One is $155 base with $135k in bonus potential which has never paid less than 75% in the past but revenue is on the decline and comp and headcount are often the first targets.
One is $50k govt worker
We are both the first to go to college, both from poverty, no parental help but we help our parents out financially
-$100k equity with $120k HELOC debt on a home worth $350k
-$200k 401k
-$20k stock
-$8k savings
-$300k unvested stock
-2 cars 2007 and 2011
-three Af Am/Hispanic kids one highly gifted
-$155k in student loan debt between us
-$6k summer camps
-PreK-8 school tuition and aftercare $45k for all three
-$2k other swim lessons, sports activities
-$80k credit debt between us

We are not expecting aid but will still apply. Will also consider 1) parochial or other schools that go through 12th after we leave our current school that are at a similar price point as we are paying now (if any exist), 2) paying for a good public school and 3) renting a home/apartment near a good public school as another option. Hoping we can stay private through 12th but don't think we can do it if more than $20k per kid.

i may get flamed for this, but I'll take the chance.

PP seems like a great example of people whose choices should not make them eligible for FA, but who will probably get it. They make $205k/year, with the potential for at least $100k more, and are living way above their means. They have three children (so likely aren't incredibly young) and have SIGNIFICANT debt -- $245k, not including mortgage. They are paying more for school/aftercare/camp than one of the parents' salaries.

Great that the parents are looking at less expensive schools, but they might be better off (financially) to move to a great public school system NOW, way before high school.

All three for 45K is not bad. After care in public school would run 15k for all three as well. But why do they have so much credit card debt and Heloc debt? Why don't they pay those off?

[Anonymous]

If you don't plan on utilizing your public school system, sell the house and buy something for $700k cash. It will be a perfectly serviceable home, and the schools will probably be atrocious. But you don't care.

Now you have plenty left over to pay full fare, and you've kept your home equity.

[Anonymous]

Anonymous wrote:If you don't plan on utilizing your public school system, sell the house and buy something for $700k cash. It will be a perfectly serviceable home, and the schools will probably be atrocious. But you don't care.

Now you have plenty left over to pay full fare, and you've kept your home equity.

Their current home is only worth $350K and they owe $250K on it--how would they swing that? If they want to move, renting seems like the smartest thing to do short term. Rent inbound for a good public that you can stay at if you move within the city, and then look for a less expensive house that's not too far away.

Schools do count bonuses, as well as any income you're getting from stocks, in calculating your income. The way our school (and I think many others) work is that they base next year's financial aid on last year's income--so while they do ask you to predict next year's income and you are free to explain changes that may be coming (e.g., "we may not get the bonus next year"), that will help you most in aid the following year. One school stated pretty explicitly that if your income was variable, you were expected to set some aside in the good years to offset the lean years.

With three kids in school, it's definitely possible that PP may get some aid at the more expensive schools, though. This doesn't read to me like a family living way above its means--on the contrary, a family making $340K in a $350K house is well within its means, even factoring in the current school tuition.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you don't plan on utilizing your public school system, sell the house and buy something for $700k cash. It will be a perfectly serviceable home, and the schools will probably be atrocious. But you don't care.

Now you have plenty left over to pay full fare, and you've kept your home equity.

Their current home is only worth $350K and they owe $250K on it--how would they swing that? If they want to move, renting seems like the smartest thing to do short term. Rent inbound for a good public that you can stay at if you move within the city, and then look for a less expensive house that's not too far away.

Schools do count bonuses, as well as any income you're getting from stocks, in calculating your income. The way our school (and I think many others) work is that they base next year's financial aid on last year's income--so while they do ask you to predict next year's income and you are free to explain changes that may be coming (e.g., "we may not get the bonus next year"), that will help you most in aid the following year. One school stated pretty explicitly that if your income was variable, you were expected to set some aside in the good years to offset the lean years.

With three kids in school, it's definitely possible that PP may get some aid at the more expensive schools, though. This doesn't read to me like a family living way above its means--on the contrary, a family making $340K in a $350K house is well within its means, even factoring in the current school tuition.

But only $205k is base -- the rest ($135k) is bonus target, and it sounds like it is usually at least $100k. That means they are paying nearly a quarter of their base comp for tuition and summer camp. And they have $235k in student loans and credit card debt. If they are making over $300k a year, why aren't they paying that down? How is that not living above their means?

[Anonymous]

Anonymous wrote:Ah yes, 350K and need of financial aid. DCUM problems.

+1. So grubby. Very uncouth.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why do get to have an opinion on the financial decisions of others? And spare me the "my money is funding your child" rhetoric, because it is simply NOT true.

1. No ones tuition -- even you precious full pay people - covers your child'a entire education for the year. If you actually believe that I would suggest you talk to the people on your Board and in the finance office.

2. If you are sooo offended that you are appalled at the idea of donating...then DONT. If what you worried about are appearances, then you deserve having to come up off money you don't want to.

4. Finally, worry about YOURSELF. Sit on your high horse abs pat yourself on the back for not needing FA or not being willing to lower and demean yourself to ask for any because your pride is fatter than your bank account.

3. Here is a novel idea -- YOU send your kids to public school and you won't have to worry about what's going on at the private schools.

1. I know that tuition doesn't cover everything. Schools make very clear in the fundraising drives that donations are going to financial aid. when a family or a single Mom making $60 or $70k needs financial aid, I have no problem. When someone who makes $200 or $300k who have major equity in a house or is putting aside $2000 a month in retirement thinks they are entitled to financial aid, big difference. Just because you want a private school education you need to make choices in that salary range. You can't have everything.

Genuine question here. I'm the PP who puts a substantial amount aside for retirement. What do you think is an appropriate amount? Do you think that I should be saving zero for retirement? Because that's pretty much the same as saying that middle-class FA shouldn't exist, because prudent parents would never take that deal.

What about people with pension plans, not 401ks? Should some kind of extra income be imputed to them?

You're making some fine judgements here. I suggest that the FA departments also care about fairness and sustainability, and that they make these decisions with their years of experience in mind.

http://www.npr.org/2016/07/07/484941939/a-portrait-of-americas-middle-class-by-the-numbers

Middle Class is not someone who is making $250-$300K a year. You may think that living in this area but that is not how it is defined. Private school is a luxury. Families have to make decisions all the time about what they want and can afford. No one is entitled to a private school education because they want it. Someone that has $700,000 in equity in a house and still believes that deserve financial aid is ridiculous.
There is no pre tax income being put into a pension plan. so why would you assign them any income now?

I'm not the OP with the $700k in equity. We make a lot less than they do.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Genuine question here. I'm the PP who puts a substantial amount aside for retirement. What do you think is an appropriate amount? Do you think that I should be saving zero for retirement? Because that's pretty much the same as saying that middle-class FA shouldn't exist, because prudent parents would never take that deal.

What about people with pension plans, not 401ks? Should some kind of extra income be imputed to them?

You're making some fine judgements here. I suggest that the FA departments also care about fairness and sustainability, and that they make these decisions with their years of experience in mind.

Genuine question here. What about families that don't even have jobs providing 401ks? Or don't have enough to full pay for private, let alone even think about setting money aside for retirement? How much FA should they be getting compared to you?

Uh, they should get more. What's your point?

[Anonymous]

^^assuming that this hypothetical family makes less than we do. If the family makes more than I guarantee that they can afford to fund retirement. If they can't do that and full pay then they should either apply for FA or take a good look at their choices.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am starting to feel like most financial aid is actually a disservice. It encourages families who cannot truly afford the luxury of private school to spend whatever they can set aside, instead of saving for college, retirement and paying off their mortgage. Because they have not saved for college, the cycle repeats with these families expecting taxpayers, full pay families and endowments to fund most college expenses. Undoubtedly, their children will still end up with large student loans AND parents who are unprepared for retirement. Why should private schools promote this irresponsible path? And guilt trip other parents who don't support it? We just have a really warped view of needs vs. wants in our society.

Do you not have a clue as to how you sound??? Yes, you rich people really do know what's better for us poor people on FA - silly me! I had no idea that rich people know better than I do as to what's best for my son and family.

Of course families want "the best" for their children. The point is that you 1) can't afford it; 2) are putting your responsibilities off on other people, and 3) it has long-term consequences...

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you don't plan on utilizing your public school system, sell the house and buy something for $700k cash. It will be a perfectly serviceable home, and the schools will probably be atrocious. But you don't care.

Now you have plenty left over to pay full fare, and you've kept your home equity.

Their current home is only worth $350K and they owe $250K on it--how would they swing that? If they want to move, renting seems like the smartest thing to do short term. Rent inbound for a good public that you can stay at if you move within the city, and then look for a less expensive house that's not too far away.

Schools do count bonuses, as well as any income you're getting from stocks, in calculating your income. The way our school (and I think many others) work is that they base next year's financial aid on last year's income--so while they do ask you to predict next year's income and you are free to explain changes that may be coming (e.g., "we may not get the bonus next year"), that will help you most in aid the following year. One school stated pretty explicitly that if your income was variable, you were expected to set some aside in the good years to offset the lean years.

With three kids in school, it's definitely possible that PP may get some aid at the more expensive schools, though. This doesn't read to me like a family living way above its means--on the contrary, a family making $340K in a $350K house is well within its means, even factoring in the current school tuition.

But only $205k is base -- the rest ($135k) is bonus target, and it sounds like it is usually at least $100k. That means they are paying nearly a quarter of their base comp for tuition and summer camp. And they have $235k in student loans and credit card debt. If they are making over $300k a year, why aren't they paying that down? How is that not living above their means?

It depends entirely on what they *are* doing with that money. A quarter of their income for tuition isn't crazy on the face of it--it might not be a decision you would make, but it's certainly one that could make sense for many families. We pay 30% of our pre-tax income for preschool for two kids, for instance. There are cheaper options, sure, but we like the school we're at, and it's not breaking the bank. And we carry student loan debt largely because it's at an insanely low interest rate where it makes far more sense to use the cash for other things with higher yields and pay it down gradually. Similarly, while we don't generally carry credit card debt, we have some right now because it's a 0%, so again, it makes more sense to hold the debt than to pay it off, even though we *could* liquidate other assets to pay it off. Without knowing the details of their financial situation and what they're doing with the rest of their income (is it going into retirement? paying for luxury vacations? part of what they're sending to parents? etc.) it's not possible to say "you're living way beyond your means!"

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am starting to feel like most financial aid is actually a disservice. It encourages families who cannot truly afford the luxury of private school to spend whatever they can set aside, instead of saving for college, retirement and paying off their mortgage. Because they have not saved for college, the cycle repeats with these families expecting taxpayers, full pay families and endowments to fund most college expenses. Undoubtedly, their children will still end up with large student loans AND parents who are unprepared for retirement. Why should private schools promote this irresponsible path? And guilt trip other parents who don't support it? We just have a really warped view of needs vs. wants in our society.

Do you not have a clue as to how you sound??? Yes, you rich people really do know what's better for us poor people on FA - silly me! I had no idea that rich people know better than I do as to what's best for my son and family.

Of course families want "the best" for their children. The point is that you 1) can't afford it; 2) are putting your responsibilities off on other people, and 3) it has long-term consequences...

1) You're right, we couldn't afford the tuition for our DS's private HS all on our own. The scholarships and FA he was awarded equaled 50% of the tuition and we were able to afford the other 50%. During that time we were also able to: pay our modest mortgage, save a modest amount in my 401k and send 2 older siblings to college (state flagship).

2) If you don't like the fact that your school subsidizes other students with your tuition dollars and you'd like your DCs to attend a school that is 100% rich kids, as numerous other posters have said before, find another school. Clearly, my DS's HS very much wanted him there for these past four years or they wouldn't have been so generous, for which we are, of course, very grateful.

3) Long term consequences??? You have no idea how paying for 50% of our DS's private HS effects our family. Maybe DS was awarded a full scholarship to college, maybe DS is going to college by joining the military, maybe DS will have a combination of merit and financial aid, work, loans and family contribution, maybe DS will attend community college for the first two years and then transfer. And as far as my DH and I's retirement - you have no idea there either. Maybe one of us has a pension, maybe we were able to save a decent amount in 401Ks before DS went to private HS and never planned on DS attending private until he expressed interest in his school, maybe one of us is going to inherit money, maybe we're ok with a very modest retirement and will live on our social security, maybe right before DS went to private HS we had saved a substantial amount for retirement but then the major bread got too sick to work.

But whatever - people as patronizing as you are will continue to think that people like me need to be saved from ourselves. Fortunately, my DS's HS thought differently.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Genuine question here. I'm the PP who puts a substantial amount aside for retirement. What do you think is an appropriate amount? Do you think that I should be saving zero for retirement? Because that's pretty much the same as saying that middle-class FA shouldn't exist, because prudent parents would never take that deal.

What about people with pension plans, not 401ks? Should some kind of extra income be imputed to them?

You're making some fine judgements here. I suggest that the FA departments also care about fairness and sustainability, and that they make these decisions with their years of experience in mind.

Genuine question here. What about families that don't even have jobs providing 401ks? Or don't have enough to full pay for private, let alone even think about setting money aside for retirement? How much FA should they be getting compared to you?

Uh, they should get more. What's your point?

You do realize that the money has to come from somewhere and, even the wealthiest schools, don't have unlimited FA budgets. Everyone wants everything for free, or as close to it as possible, but that just isn't feasible.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Genuine question here. I'm the PP who puts a substantial amount aside for retirement. What do you think is an appropriate amount? Do you think that I should be saving zero for retirement? Because that's pretty much the same as saying that middle-class FA shouldn't exist, because prudent parents would never take that deal.

What about people with pension plans, not 401ks? Should some kind of extra income be imputed to them?

You're making some fine judgements here. I suggest that the FA departments also care about fairness and sustainability, and that they make these decisions with their years of experience in mind.

Genuine question here. What about families that don't even have jobs providing 401ks? Or don't have enough to full pay for private, let alone even think about setting money aside for retirement? How much FA should they be getting compared to you?

Uh, they should get more. What's your point?

You do realize that the money has to come from somewhere and, even the wealthiest schools, don't have unlimited FA budgets. Everyone wants everything for free, or as close to it as possible, but that just isn't feasible.

Right, I mean if only there were schools out there that were FREE!

Sorry for the snark, but for all the public school parents out there this is such a tempest in a teapot. Fine, you can all squabble about who's going to buy that Range Rover of an education with whose money, or you can just deal and drive that Ford like the rest of us. I am sympathetic if you live in a truly failing school district, but to be honest most of you probably don't.