How does most of America pay for these elite schools?

[Anonymous]

PP- When you say you're taking out loans, do you mean the fed govt ones, or are you also doing Parent PLUS loans?

[Anonymous]

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.

A family with 6 kids is going to get significant financial aid. If the kid is going to get an engineering degree from Carnegie Mellon, taking out a modest loan will be worth it.

[Anonymous]

It isn't as if a family earning less than $125,000 pays $0 and one earning $126,000 pays $80,000. And it isn't as if all flagship state Us are free. The price differential is almost certainly much less than $80,000 per year.

[Anonymous]

Started saving $150 per month when child was born. Upped it when we could, and if/when one of us got an unexpected bonus, half went to the 529s. One in college now (sophomore), and we had about $110k saved when she started. Fortunately, she got a merit scholarship, but our plan had been half each semester from cash flow (which is much higher now than when she was born) and half from the 529.

2nd child is applying now, and while we haven't heard from all of her schools as of yet, it is looking like she'll be full pay at a $70k+ school. The plan is the same, half from cash flow and half from the 529 each semester

[Anonymous]

Scholarship and Loans

Kid 1 is in a elite business program

Kid 2 is a CS major in (not elite but)a T50 school.

Epecting they pay off the loan soon enough after graduation.

[Anonymous]

Kids were 6 years apart. Mom went back to work when the older was in 8th grade. Mom’s wages were intended to cover college. Her wages did not fully cover college. Both attended private colleges in Pennsylvania, ranked in the 30s. Neither received aid.

When the first kid applied to college she had 50K in her UGMA. At that point, it covered 1 year. Mostly we pulled from cash flow to cover the four years. At graduation she had $15K in her account. Our household income during that time was $175-$225K. We had a 2-year break between the older one graduating from college and the next one starting.

We also funded 2 years of Virginia Pre-Paid for the younger at the same time we were preparing to pay for the older. When the younger was admitted ED we quickly funded one year of Private College 529 (so her 4th year of college was covered).

For the second: The two years of VA Prepaid were cashed in and paid to the PA college. We cash-flowed most of the rest. 4th year was covered by Private College 529. By the time the second graduated in 2020, each year was about $72k. Family income had risen to $250-$265k.

Neither had a loan. Both are employed.

[Anonymous]

2 Feds 13/14. We just saved from the start. I think our biggest help was buying a house we could well afford with a 15 year mortgage. We paid it off a bit before 15 years and then put the whole mortgage towards college savings. Old cars etc.

[Anonymous]

Anonymous wrote:Most of America doesn't even try to go to the Ivys.

The thing is, it's not the Ivies, Stanford, etc. who are the biggest offenders in this. Ivies+ give financial aid even to families in $150-200K range and for most the degree does pay off. The real problem are schools like NYU or Sarah Lawrence.

[Anonymous]

Anonymous wrote:

Anonymous wrote:In our case - both sets of grandparents are also paying, we only have two kids, and we can live comfortably from the lowest salary, so we also pay as he goes for DC1's med school. We make almost 500K/year and we moved to a lower COL area, so our mortgage is low.

So rich with family money to boot? Got it. Seems about how most private school tuition is paid for

Kind of, but ours did public school until college. We both went to Ivy as products of public schools and all the people I know who went to Deerfield, Andover etc had their tuition paid by their grandparents. There are a lot of pay as you go people. Daycare at Tyson's is $2300 for one, so college is similar to having an infant and a toddler at a center.

[Anonymous]

Anonymous wrote:

Anonymous wrote:In our case - both sets of grandparents are also paying, we only have two kids, and we can live comfortably from the lowest salary, so we also pay as he goes for DC1's med school. We make almost 500K/year and we moved to a lower COL area, so our mortgage is low.

This is either a troll or one of the most tone deaf posts I've ever read on DCUM!

It is real life, we are dime a dozen. My parents are from a culture that encourages savings and modest living. My ILs are the typical white, former MC boomers who benefited from cheap college education, abundance of well-paid jobs, great market returns, and continuous increases in real estate value. We went to great schools, had lucrative careers from the beginning, and delayed parenting until we were established at work and I could request flexibility. I stayed in the same industry and worked 10-12 hour days for decades until I had my kids in my early 40s. The kids went to public school until college.

[Anonymous]

Anonymous wrote:Most of America doesn’t even apply. No one from my small town Midwestern high school ever went to a T20 college, at least not in living memory.

The kids who do take on massive debt.

Are the schools below T20 that much cheaper?

[Anonymous]

Most don’t go to elite schools. A good portion of those who do get aid or can pay (have saved/pay out of income). There are families who take out too much in loans but I think many people have become wary of loans (other than the federal ones).

A friend who has a HHI of around 250k said that they got aid at all the private schools their kid has been accepted to. She said that the package sometimes calls it merit and sometimes calls it a grant but the bottom line was the same across the schools. I assume that they have saved the remainder.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Most of America doesn’t even apply. No one from my small town Midwestern high school ever went to a T20 college, at least not in living memory.

The kids who do take on massive debt.

Are the schools below T20 that much cheaper?

Many are because many offer merit aid. The sticker price is often meaningless unless you don’t qualify for aid/the school doesn’t offer merit. The top 20 don’t offer merit but many below that do and many have lower sticker prices. Same with below top 20 SLACs (with a couple of exceptions like Grinnell).

[Anonymous]

We saved like crazy. We didn't buy into the DMV mentality that says you have to have a posh house, 3 expensive vacations per year, and the highest-end purse/car/electronics. I didn't put my own high-cost education (paid for by my parents' second mortgage and lots of my own borrowing for grad school) to good use rather than getting caught up in the SAHM culture. No family money whatsoever - my parents sacrificed a lot so that I could get a great education and I'm thrilled that I can do the same for my own kids.

[Anonymous]

Agree with the others - most of America doesn't even go this route.

Looking at 2019, 2/3 of HS grads enrolled in college that year. Of that 2/3 enrolled, 2/3 were in 4-year colleges. Most, but not all, were full-time.

So we have a slice of HS grads in full-time, 4-year colleges. In general, enrollment in public universities is 3x - 4x that of private non-profits, but not sure the rate for first-freshman.

All that to say.... most Americans are not in the group you're speaking of. No doubt in part because the cost is astronomical. But yes, for those that are, it's family money, or parental savings, or student and parent loans.