What is a "donut hole family"?
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Anonymous
Yes, that's exactly my point. Some "lower income" can't afford these things yet still "make too much" to get financial aid. I thought that was "donut hole" but apparently I was wrong, because it's been posted here that Donut hole families still have assets to liquidate. I'm asking what it's called if you don't have those assets yet still make too much for financial aid. |
Anonymous
It is people in the 25%-10% percentile in family income distribution in the USA, or especially in the major metropolitan areas. Those families can afford 1-2 kids going to in-state universities at full pay, but would not be able to pay (without selling chunks of their house value etc...) the private pay tuition/board at $80K/year for 1-2 kids, but whose family income is too high for any need-based aid from financial aid programs (either federal or from the university) but who are by definition solidly upper middle class and so aspire to the same colleges as the 10%-1% families and whose previous generations WERE able to afford to be full pay and private colleges in the USA but are now priced out due to the over-inflation of tuition compared to income growth over the last 30-40 years. |
Anonymous
It's also laughable that PP thinks "most people" save for college for 18 years. I mean, GTFO. |
Anonymous
You're forgetting compounding. And there are many, many alternatives that don't cost $80,000 per year. |
Anonymous
Like PP said, some of the colleges are worried about their student bodies getting barbelled and resembling private schools more than the traditional mix that the colleges had. We'll happily pay instate or equivalent OOS, but we're not willing to give up on retirement to send out kids to Haverford. That's fine with us and our kids. Whether or not these schools want a mix of LMC and Poor and very upper middles class and upper class with nothing in between is another question. |
Anonymous
Most people who expect that their children will attend college do. College isn't for everyone and that's OK. |
Anonymous
This who thread is about private schools, which all cost around 80k a year. We saved what we could and are now putting 2k per kid per month into 529s, but we still won't approach the cost of the privates that would be worth paying for. |
Anonymous
But can’t they/don’t they take out loans to pay the tuition? |
Anonymous
Not following. Are you saying you can't afford your state school without financial aid? Because it sounds like you are saying you can't afford an elite school without financial aid, which does sound kind of entitled. |
Anonymous
A family earning around 250k is not going to take out loans to cover the 50k a year difference in cost between publics and privates for multiple kids unless they are utterly terrible with money |
Anonymous
I don't know anyone who thinks paying for "expensive private college" is comfortable. This is the problem with donut hole discussions - of course it's expensive! It's expensive for everyone! If you think you're hard done by because you can't just instruct your household manager to write a check and forget about it moments later, you have skewed expectations in life. "Not outrageously wealthy" is not a protected class. |
Anonymous
+1 but if you really really want that fancy school for your kid you can move into a condo, cancel Netflix, get a second job, and get it done. But it’s not worth it so it’s not worth it. The “entitlement” is feeling entitled to send your kid to the very best school they get into, because you think that’s what meritocracy means. And it’s a rude awakening to find out that’s not true. |
Anonymous
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The problem is this describes a bunch of different families. And their situations may be sympathetic or not depending on your viewpoint.
Some people windup in the donut hole because they have more kids. If you have one or two kids, it's easier to sacrifice to get those kids through school than if you have three or four. People with more kids also struggle to save as much for college and feel frustrated when schools won't make up the difference. Personal bias here: I have little sympathy for these parents because I don't understand how you keep having kids without considering how you will pay for their college. But I have a lot of sympathy for these kids because it puts them in a really crappy situation where their existence is itself the thing keeping them from going to a school they got into but can't afford. Parents who have 3+ kids and then complain about how much college costs makes me angry. But one I have more sympathy for is when one or both parents own a business and financial aid expects them to be willing to borrow against or liquidate business assets in order to pay for school. That seems like such a terrible choice. I know people who have done it and respect how much they are willing to put on the line for their kids education, but I'm not sure if I'd be able to make the same choice. That's a really tough one. Another one is people who had kids late and are nearing retirement, and get caught two ways. First, they don't save as much for college because they are also saving for retirement (sometimes they are also caring for elderly parents and it's a squeeze). Second, they may have more liquid assets specifically because they are looking to retire soon, and financial aid will lay claim to those. I feel bad for these folks because often being late to parenting is not a choice. However, as someone who had kids late, I also just assumed that meant I'd have to work a little longer to get my kid through school. So again, this is something you can anticipate and should be able to if having kids late because you are old enough to understand how this works. I also think people who come from modest backgrounds and who went to schools on scholarships sometimes don't understand how to save for college and then are surprised when their income pushes them into the "no aid" position. I have sympathy for this one because it's a knowledge gap -- their parents didn't save for college either and they just didn't know better. Though I do think if you are going to have kids you have to educate yourself. This was my DH and I had to work on him because he was convinced our kid would just qualify for aid. Now he gets that even though we aren't wealthy, we have more resource than our parents and we have to dedicate some of them to college savings if we want to ensure our kid can go to school. If I hadn't worked on him, though, we'd have zero saved. There are probably others I'm unaware of. But these are the ones I hear the most. I think it's hardest for people who are outliers in their school or social community in terms of money. If everyone else you know can afford to pay out of pocket, and you can't because of the number of kids or your age, you might feel like it's unfair. And likewise, if everyone you know qualifies for aid because you are in a lower-income community, and you don't because you run a business with assets and therefore are actually in a higher bracket, it could feel unfair. But usually it's not unfair. The actual unfair thing is that money is such a barrier to higher education in general in this country and having kids pretty much requires you to save for college, while also saving for retirement, while also paying your health insurance premiums. And yet we still have fairly high taxes! It's hard, but if it's "unfair" it's unfair to everyone except the very rich who inherited their wealth. And that's by design. |
Anonymous
A family that was making $150k a few years ago could have been saving then, and then could have (and should have!) put all their income increases into savings. Now that savings probably should have been retirement *and* college but they ought to be well on their way to mitigating the cost of college. |
Anonymous
Williams is a lot less painful on a 500k hhi than a 200 hhi, likewise, it’s free on a 100k hhi |