How does most of America pay for these elite schools?

[Anonymous]

Anonymous wrote:Some private colleges have so much money that they could go completely tuition-free, only charging for room/board, yet they charge $80k+ a year to people with $150k HHI and some 529 savings. (Net price calculators demonstrate this). It needs to be more reasonable.
I read in higher ed expert Jeff Selingo's newsletter that so-called "nonprofit" universities get average federal subsidies of about $41k/year per student.
Everyone agrees college costs too much. There's a lot of anger in this thread about the overcharging and it's sad to see qualified students denied opportunities. The main question is: What are we going to do about this? Is there any organization that's really trying to work with colleges and Congress to change this?

If congress ever cared, they could fix it. These schools are all reliant to some degree on federal student loans, parent plus loans having special protections in bankruptcy, and just plain old federal research funding. That money could be easily be premised on tuition as a multiple of the Stafford loan limit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yeah, no. You see, there’s something called the CSS that delves deeply into your finances. Sometimes you’re even asked what cars are in your garage.

Don’t count on aid for your kid even if you’re just a couple years from retirement. Oh, and you’ll be expected to drain your other kid’s 529 account too.

So…. You had the money to pay, because you’re wealthy, or you didn’t, because you’re middle class? Which one is it?

Couldn’t you tell that I’m middle-class from what I wrote?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most high stats kids from donuts hole families give up on elite schools and go to the in state flagship

This is us. Our HHI is $145K. We didn't qualify for much FA, despite the fact that $80K per year is more than half our HHI!! Crazy.
State schools for our kids.
Meaning, the best and the brightest are NOT going to the Ivies or the SLACs like Amherst, Williams, Swarthmore, etc.
My kids should be at these schools, but we can't afford to send them there.

Do you have a kid in college? Have you actually applied for financial aid? Our HHi is a bit higher than yours (in the 180ish range), and we have definitely qualified for significant financial aid at "expensive" schools. I could see that you don't qualify if you have other significant non-retirement assets, but, if you are making less than $150,000 and don't own multiple properties or have 6 figures in stocks/brokerage accounts/or shares of a private corp., you will get financial aid at a lot of schools. It may not be enough, but, that is a different argument.

Nope, NPC was way the hell off for my kid last year. NPC stated we would get ~40K yr/aid, we weren’t offered anything and our HHI is lower than yours. How on earth did you get aid with that HHI? Impressive, though, good for you.
Recognizing that everyone’s financial situation differs, it’s still a frustrating process.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I get that most people on DCUM have $80k saved per year of college and much of America (HHI under $125k) gets aid but do these two realities really cover these gigantic pools of applicants to all the top 50 schools? has the rest of America also saved $80k/year/kid? am I missing something? thinking about this tonight as friends of ours just had their daughter (one of 6 kids, first in college) commit to Carnegie Mellon. I know for a fact that they make more than $150k but I had no idea that $&0k/year was in their budget.

You are perhaps asking the wrong question...the reality is that most of the Top 20 private schools (I think at least 15) are all grant / no loan schools. CMU may be an interesting example, because not sure if they made the same pledge. So, a parent with 6 kids and $150k is getting much of college covered by grants, with some minimal parental contribution.

It is when you move outside this group that college actually gets more unaffordable. Think OOS for a top state flagship like Berkeley or a Bennington College in VT (as just random examples).

This. It's easy for a lower middle class family to send their kid to Harvard because Harvard makes it all but free. Sending that same kid to a state flag ship means loans. Sending them to a less prestigious private school means a lot of loans

For high stats kids, the less prestigious privates might offer a lot in merit. My kid is going to get 30k-44k in merit at Muhlenberg and Wheaton. Both of these came in at 39k on NPC, but they are both potentially offering more for other specialty scholarships. If she gets everything they are considering her for, it could be close to cost of UMD. But, she may get a lot of money there (in Honors College and potential for B-K). Looked at Bennington initially, and they weren't far off including merit w/ the NPC. They will be less than any Ivies probably if she gets in. But, those should hopefully be affordable because we are under 150K in annual income. Ivies and top LACs cane in around 39k-45k on NPC unless they counted full or high value of equity in primary residence. Our area has exploded, and our house is worth a lot now.

We have 2 kids 2 years apart and have been saving since the kids were little and hoping that the cost wouldn't be much more that around $40k a year w/ need at upper tier or merit at mid tier. We'll probably have about 100K per kid in 529 by the time we need it and plan to try to pay the first two years from other savings and as we go. If DC1 goes to an upper tier that gives need, our cost should drop when DD2 is also in school, and if she goes in state or a high merit offer, it should be less initially. Here's hoping! DC2

I think some of the biggest challenges are OOS publics that don't give much merit like UMich and UC Berkley. Did the UMich calculator, and they essentially gave only $100 in aid. What was that? So, the combo of instate and private LACs that have good need or good merit should yield some options for us. #2 won't get as much merit as #1 and will be less likely to get into top schools, so that will be it's own problem!

[Anonymous]

Also, we had DC 1 not work because it's likely she'll get into a top school that will offer need based aid, and they value the student's income 4x more than parents'. Seems a shame but it is what it is.

That may have affected other people around 150K who got little or no FA at a top school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yeah, no. You see, there’s something called the CSS that delves deeply into your finances. Sometimes you’re even asked what cars are in your garage.

Don’t count on aid for your kid even if you’re just a couple years from retirement. Oh, and you’ll be expected to drain your other kid’s 529 account too.

My alma mater, after reviewing our CSS submission, said we had "too much in retirement." I retorted that the university did not teach me to raid my retirement savings. The real issue here is the wealthy establishment types who drive financial aid policy, and cannot fathom how someone could fund retirement yet not fund college plans. Even when presented with proof of 5 figure out out of pocket annual medical expense, the alma mater just wanted to know how long I would have these expenses! This is from a university rated by Forbes as A+ for financial health. I should never have given tens of thousands of dollars to my alma mater - I should have invested it for future children, but what did I know in my 20s and 30s?

What is the CSS and how is it different from FAFSA. We did FAFSA in case we wanted our kid to be able to take a loan (the calculated parent contribution was like 500K, so no chance of other federal aid). The schools where our kid was offered merit aid didn't ask for anything (or anything beyond FAFSA). Is the CSS something that we need to do or is it only if a school asks or you are seeking aid beyond federal aid?

[Anonymous]

The same way you pay for non-elite schools. In general, elite schools don't cost more than their counterpart.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yeah, no. You see, there’s something called the CSS that delves deeply into your finances. Sometimes you’re even asked what cars are in your garage.

Don’t count on aid for your kid even if you’re just a couple years from retirement. Oh, and you’ll be expected to drain your other kid’s 529 account too.

My alma mater, after reviewing our CSS submission, said we had "too much in retirement." I retorted that the university did not teach me to raid my retirement savings. The real issue here is the wealthy establishment types who drive financial aid policy, and cannot fathom how someone could fund retirement yet not fund college plans. Even when presented with proof of 5 figure out out of pocket annual medical expense, the alma mater just wanted to know how long I would have these expenses! This is from a university rated by Forbes as A+ for financial health. I should never have given tens of thousands of dollars to my alma mater - I should have invested it for future children, but what did I know in my 20s and 30s?

What is the CSS and how is it different from FAFSA. We did FAFSA in case we wanted our kid to be able to take a loan (the calculated parent contribution was like 500K, so no chance of other federal aid). The schools where our kid was offered merit aid didn't ask for anything (or anything beyond FAFSA). Is the CSS something that we need to do or is it only if a school asks or you are seeking aid beyond federal aid?

It depends on the school. Some don't ask you to fill it out if you are not applying for FA from school, but some do, if you are applying for merit scholarships. I guess they want to see if some aid they are offering can be recorded as non-merit, probably makes them look better.

[Anonymous]

Anonymous wrote:

Anonymous wrote:"Most of America" hasn't heard of many of these elite schools and doesn't care. But I know to many UMC people those people don't count.

It’s very important for them to believe that they were in competition with every valedictorian from every high school across America, because that’s what makes their T20 admission so impressive. UMC people don’t want to accept that they were only competing with themselves. Oh, and also, the kids from my high school that had 99th percentile ACTs didn’t have any prep classes. Because there weren’t any. They were just that smart. But they still only applied to Flagship U.

A classmate of mine in Rochester Hills, Michigan, turned down MIT to go to engineering school at U of Michigan. His family was middle class, and would have had to take out loans for him to go. They had two younger kids, as well, so they wanted to be able to afford to send all three kids to college. This is a pretty common story around the country.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most high stats kids from donuts hole families give up on elite schools and go to the in state flagship

This is us. Our HHI is $145K. We didn't qualify for much FA, despite the fact that $80K per year is more than half our HHI!! Crazy.
State schools for our kids.
Meaning, the best and the brightest are NOT going to the Ivies or the SLACs like Amherst, Williams, Swarthmore, etc.
My kids should be at these schools, but we can't afford to send them there.

Do you have a kid in college? Have you actually applied for financial aid? Our HHi is a bit higher than yours (in the 180ish range), and we have definitely qualified for significant financial aid at "expensive" schools. I could see that you don't qualify if you have other significant non-retirement assets, but, if you are making less than $150,000 and don't own multiple properties or have 6 figures in stocks/brokerage accounts/or shares of a private corp., you will get financial aid at a lot of schools. It may not be enough, but, that is a different argument.

Nope, NPC was way the hell off for my kid last year. NPC stated we would get ~40K yr/aid, we weren’t offered anything and our HHI is lower than yours. How on earth did you get aid with that HHI? Impressive, though, good for you.
Recognizing that everyone’s financial situation differs, it’s still a frustrating process.

I think you can get aid with a 180HHI if you live in a huge house with a huge mortgage, have large car payments (you can pay $50K+ for a Toyota, which is not considered a "luxury" car), and very little non-retirement savings.

We had $350K saved for college, and the colleges wanted us to spend it all on Child #1, leaving almost nothing for Child $2 and Child #3.

Our oldest child got a gigantic merit aid (full tuition) at an OOS public, so that's where she went.

We'd thought $100K per child was a reasonable amount of college savings. We were so wrong, but we do not have the income to save the $1M some earlier posters on this thread bragged about saving for college.

It's a very broken system when college costs about $10K per month!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"Most of America" hasn't heard of many of these elite schools and doesn't care. But I know to many UMC people those people don't count.

It’s very important for them to believe that they were in competition with every valedictorian from every high school across America, because that’s what makes their T20 admission so impressive. UMC people don’t want to accept that they were only competing with themselves. Oh, and also, the kids from my high school that had 99th percentile ACTs didn’t have any prep classes. Because there weren’t any. They were just that smart. But they still only applied to Flagship U.

A classmate of mine in Rochester Hills, Michigan, turned down MIT to go to engineering school at U of Michigan. His family was middle class, and would have had to take out loans for him to go. They had two younger kids, as well, so they wanted to be able to afford to send all three kids to college. This is a pretty common story around the country.

One of my child's high school classmates turned down MIT to go to U of Illinois. Much cheaper. "Top" schools definitely do not get the "top" kids!! Yes, UMC parents love to think their kids are at "tippy top" schools, ignoring the fact that many of the really "tippy top" kids are working hard at state universities and lower-ranked LACs all over the country.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I get that most people on DCUM have $80k saved per year of college and much of America (HHI under $125k) gets aid but do these two realities really cover these gigantic pools of applicants to all the top 50 schools? has the rest of America also saved $80k/year/kid? am I missing something? thinking about this tonight as friends of ours just had their daughter (one of 6 kids, first in college) commit to Carnegie Mellon. I know for a fact that they make more than $150k but I had no idea that $&0k/year was in their budget.

You are perhaps asking the wrong question...the reality is that most of the Top 20 private schools (I think at least 15) are all grant / no loan schools. CMU may be an interesting example, because not sure if they made the same pledge. So, a parent with 6 kids and $150k is getting much of college covered by grants, with some minimal parental contribution.

It is when you move outside this group that college actually gets more unaffordable. Think OOS for a top state flagship like Berkeley or a Bennington College in VT (as just random examples).

This. It's easy for a lower middle class family to send their kid to Harvard because Harvard makes it all but free. Sending that same kid to a state flag ship means loans. Sending them to a less prestigious private school means a lot of loans

For high stats kids, the less prestigious privates might offer a lot in merit. My kid is going to get 30k-44k in merit at Muhlenberg and Wheaton. Both of these came in at 39k on NPC, but they are both potentially offering more for other specialty scholarships. If she gets everything they are considering her for, it could be close to cost of UMD. But, she may get a lot of money there (in Honors College and potential for B-K). Looked at Bennington initially, and they weren't far off including merit w/ the NPC. They will be less than any Ivies probably if she gets in. But, those should hopefully be affordable because we are under 150K in annual income. Ivies and top LACs cane in around 39k-45k on NPC unless they counted full or high value of equity in primary residence. Our area has exploded, and our house is worth a lot now.

We have 2 kids 2 years apart and have been saving since the kids were little and hoping that the cost wouldn't be much more that around $40k a year w/ need at upper tier or merit at mid tier. We'll probably have about 100K per kid in 529 by the time we need it and plan to try to pay the first two years from other savings and as we go. If DC1 goes to an upper tier that gives need, our cost should drop when DD2 is also in school, and if she goes in state or a high merit offer, it should be less initially. Here's hoping! DC2

I think some of the biggest challenges are OOS publics that don't give much merit like UMich and UC Berkley. Did the UMich calculator, and they essentially gave only $100 in aid. What was that? So, the combo of instate and private LACs that have good need or good merit should yield some options for us. #2 won't get as much merit as #1 and will be less likely to get into top schools, so that will be it's own problem!

If you earn little enough, the Ivies are literally the cheapest option because they are 100% free and all aid is grant based. OOS publics have a mission to serve instate kids. OOS kids are a revenue stream that helps lower the price for in state students, so why would they give generous aid?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most high stats kids from donuts hole families give up on elite schools and go to the in state flagship

This is us. Our HHI is $145K. We didn't qualify for much FA, despite the fact that $80K per year is more than half our HHI!! Crazy.
State schools for our kids.
Meaning, the best and the brightest are NOT going to the Ivies or the SLACs like Amherst, Williams, Swarthmore, etc.
My kids should be at these schools, but we can't afford to send them there.

Do you have a kid in college? Have you actually applied for financial aid? Our HHi is a bit higher than yours (in the 180ish range), and we have definitely qualified for significant financial aid at "expensive" schools. I could see that you don't qualify if you have other significant non-retirement assets, but, if you are making less than $150,000 and don't own multiple properties or have 6 figures in stocks/brokerage accounts/or shares of a private corp., you will get financial aid at a lot of schools. It may not be enough, but, that is a different argument.

I'm the PP. Yes, my kid applied to very selective SLACS and got accepted, but received very little FA. These schools don't offer merit aid. The private colleges wanted us to take out a mortgage on our house to pay for DC's college! Nope. not us. The public colleges cost so much less, so that's where my child went.

My kid graduated a couple years ago, and she says now that she wished she'd gone to a more selective, better college. She's in a top grad program, where she's finally among her peers. I wish I'd been able to send her to Amherst, etc., but it was financially impossible.

[Anonymous]

[quote=Anonymous]Who exactly should pay for your kids' education if not the parents? Sure, it would be great if tuition were lower or if we have a national plan to subsidize it for everyone, but we don't. So today, who should pay? If you've really got millions in retirement, why shouldn't you be expected to draw down some of that? The rest of us don't have that much because we set some aside for our kids. Shouldn't those people get financial relief before you? What about people who started out at the starting line, while you were already on second base because your parents were able to put you through college without saddling you with loans like the rest of us? How about everyone whose parents paid for their wedding, or even chipped in? How about everyone whose parents helped them afford to buy a house before the prices shot through the roof? How about married couples where one spouse got to stay home and not work for money? Why should they qualify for more aid than the families where both parents tried their best to earn and save? Maybe these people should step aside till everyone else gets a break finally?

[/quote]

OMG to 2:44. This is 21:26 back. You’ve made a lot of assumptions. Let me debunk them. First, we were planning (and still will) sell off some 401k to fund college. The point is, dear alma mater would give us nothing. We don’t expect to spend down all of the accounts, but the financial aid process is so hurried and stressful that I was never able to explain that, and I’m not sure it would have mattered to them. They have their secret “formula,” their calculations from the CSS, and the formula is not transparent. In fact, the financial aid rep said, “I’m so sorry. You did everything right. You remind me of my family, in the same situation.” Did you know that some couples in NY and the good old tri-state area are divorcing, so that they can collect financial aid for their kids’ college expenses?

Second, why do you assume I started on second base? I was a first gen student (as was my husband). We both came from lower income, working class families and no one paid for anything for us. I did thankfully benefit from financial aid and academic scholarships, but stool graduated with more than $20k in student loan debt - back in the ‘80s. What’s more, since neither of us came from wealth, we ended up paying to help support our aging parents - more thousands that were not available for 529s.

Please reconsider how you judge people. There are plenty of people like me out there - sure, some became incredibly wealthy, most improved their lot in life, thank God, but we can’t easily afford sky high tuition. My first DC ended up at a much lower ranked university (think in the 200s) and is now trying to transfer out to a better institution. We can afford the $75k for two years but not four.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I get that most people on DCUM have $80k saved per year of college and much of America (HHI under $125k) gets aid but do these two realities really cover these gigantic pools of applicants to all the top 50 schools? has the rest of America also saved $80k/year/kid? am I missing something? thinking about this tonight as friends of ours just had their daughter (one of 6 kids, first in college) commit to Carnegie Mellon. I know for a fact that they make more than $150k but I had no idea that $&0k/year was in their budget.

Responsible parents save for their kids' education.

this has nothing to do with education. you are buying prestige, a brand. it's really not that different from designer purse.

A designer purse will not grant you entree into the most selective grad schools, nor the most selective employers. You do know outcomes are different for someone graduating from a top school vs icouldonlyaffordthisnonameschool? There is data on this. Someone in another thread posted the list of schools with the best RoI. Look at the $750 - $1M tier over 20 years. All prestigious privates except for Georgia Tech, who's results are skewed by the engineering school.