Donut hole families: Did you scrimp/save/take out loans to go to Ivies/Top privates?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

There is, actually. There are plenty of data on this. And you are indeed a ‘hole.

I don't really understand the "donut hole" thing either.

I been playing with the Harvard calculator for my family size (2 people, 1 in college) and assets.

The curve is smooth. The idea that people paying 70K on 255K income are somehow suffering because they're in a "hole", but people paying 68.5K on 250K are living large because of aid is absurd. The reality is that the first family still has more left, and they'll still have far more than my family who would pay 8.2K on 90K HHI.

They will have more because they earn more than two times what your family does. It's not about what a given family has "left." It is about whether the EFC for a given family is realistic. For our family, it is not, and despite having saved almost $400K to put two kids through college, the gap between the EFC and what we can actually pay is just too large to bridge.

How on earth can $400K not be enough to put two kids through college? Even if both of your kids go to the most expensive colleges in America (examples: Vassar and U Chicago), their tuition will be almost covered by what you've saved, and you can clearly cover the excess plus room and board out of your current salaries if you've been able to sock away an astonishing $400K in savings JUST for college.

You are definitely not a donut-hole family. Good for you!

[Anonymous]

If you can't afford an "elite" private college, choose a less expensive school, search out merit aid, do two years at a community college. There are all sorts of roads to a good college education out there. The problem is we and our government policy focuses on a handful of very expensive schools that educate a minuscule number of America's college students. Why purchase a Mercedes when a Ford will do the job, especially when the Mercedes is not really affordable?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

There is, actually. There are plenty of data on this. And you are indeed a ‘hole.

I don't really understand the "donut hole" thing either.

I been playing with the Harvard calculator for my family size (2 people, 1 in college) and assets.

The curve is smooth. The idea that people paying 70K on 255K income are somehow suffering because they're in a "hole", but people paying 68.5K on 250K are living large because of aid is absurd. The reality is that the first family still has more left, and they'll still have far more than my family who would pay 8.2K on 90K HHI.

They will have more because they earn more than two times what your family does. It's not about what a given family has "left." It is about whether the EFC for a given family is realistic. For our family, it is not, and despite having saved almost $400K to put two kids through college, the gap between the EFC and what we can actually pay is just too large to bridge.

How on earth can $400K not be enough to put two kids through college? Even if both of your kids go to the most expensive colleges in America (examples: Vassar and U Chicago), their tuition will be almost covered by what you've saved, and you can clearly cover the excess plus room and board out of your current salaries if you've been able to sock away an astonishing $400K in savings JUST for college.

You are definitely not a donut-hole family. Good for you!

Sorry, typo. Almost $300K.

Cannot bridge the gap without loans. Cannot stomach taking out the gap amount in loans. Do not qualify for FA.

[Anonymous]

Anonymous wrote:If you can't afford an "elite" private college, choose a less expensive school, search out merit aid, do two years at a community college. There are all sorts of roads to a good college education out there. The problem is we and our government policy focuses on a handful of very expensive schools that educate a minuscule number of America's college students. Why purchase a Mercedes when a Ford will do the job, especially when the Mercedes is not really affordable?

Government policy doesn't exactly focus on the top tier schools. Financial aid at the elites mostly comes from their endowments in the form of grants. Most government spending on higher ed is in the form of state subsidies to public colleges that benefit all families, regardless of income. Federal financial aid goes to individuals, regardless of their college choice. Since most college-goers attend for-profit, community colleges, and public universities, that's where most of the money goes. The student loan crisis is most acute among those who attend for-profits or who do not graduate, so they are saddled with debt that does not give them any advantages in the job market. The students with hundreds of thousands of dollars in (public) debt are those who borrowed for graduate school.

As a public policy issue, sending a student qualified to attend an elite college to community college is a dead loss weight to the country. Community colleges have far fewer resources and lower educational standards. They would be covering curriculum they already learned in high school instead of opening new doors. Think of the economy less like buying a car and more like weightlifting -- making the economy stronger requires having the strongest pull the most weight and it would be a waste to tell them to lift a couple dumbbells when they are capable of lifting the whole bench.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

+1000

This is true, and somehow people who go on and on about being in the donut hole assume that someone who has a HHI of, say, $70-100K is going to have an "easy" time paying for college because their income is low enough to qualify for aid. Yeah, sure, it is... but you sure as hell aren't knocking down that sticker price to something in the realm of "affordable."

College is expensive for literally everyone. It just is a matter of perspective.

[Anonymous]

What is a donut hole family? I have read this whole thread and still cannot really figure it out. I also tried to google it and nothing came up, except this site, actually! What the heck is a donut hole family? (Admittedly, my older child is only 9, so we are not in the college prep phase yet, so maybe that is why I am out of it!)

[Anonymous]

We saved.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

+1000

Sure, maybe it’s true that if we scrimped on retirement savings, moved to a condo, never went on a vacation, etc. we could afford to send our kids to $75K/year schools. But we’re not doing that. If that makes us selfish, so be it.

[Anonymous]

Anonymous wrote:What is a donut hole family? I have read this whole thread and still cannot really figure it out. I also tried to google it and nothing came up, except this site, actually! What the heck is a donut hole family? (Admittedly, my older child is only 9, so we are not in the college prep phase yet, so maybe that is why I am out of it!)

Earn too much for need based aid, but not so much they can pay for college out of their checking account.

Perhaps we are one such family - without merit aid, he probably can't go to the near-elite private he is hoping to go to although he can go to any state school in the country that will have him. But I'm not complaining.

Even if I forked over the full $70k somehow, he'd still be better off than the poor kid who got the free ride. We live near internships. We can afford to solve problems like a lost calculator without flinching. He won't be working summers to help me with rent. We have a car to lend him. We have health insurance.

[Anonymous]

It's the American way. Rich people can buy nicer things. Nicer cars, nicer houses, nicer colleges.

There is absolutely nothing wrong with driving a Ford, living in a typical house, and attending a state school. It's only an issue when you spend too much time thinking it's not fair that other people have more money.

[Anonymous]

I like this definition but it is not quite broad enough.

We can pay for it out of our checking account, right now, BUT we are fairly sure that before all the college bills come in one set of our parents or the other are going to be broke and we are going to be footing the bill. Even if they aren't there are other potential health expenses within our immediate family, not covered by insurance, that will also make paying the full bill impossible. If any of these things hanging over our head happen, we will qualify but if they don't happen until after college, we will be in trouble.

"Earn too much for need based aid, but not so much they can pay for college out of their checking account."

[Anonymous]

Going back to the original question....

I honestly think there's more of a difference in social life based on family economics at public universities than at many top private colleges. If you go to a school like Yale or Harvard or UChicago, dorm assignments aren't based on income, few people live off campus, Greek life isn't that important and very few people have cars at school. Admission to sporting events is usually free with a college ID. At some colleges, e.g., Swarthmore, there's no charge for any on campus events--concerts, plays, movies, sporting events, etc. on campus are "free."

Go to a school like UVa or UTexas@A and Greek life becomes more important. People live in Greek frats/sororities and for many of these there is an unofficial requirement that you be of a certain economic class to be admitted. Sometimes there's even a wealth hierarchy with some houses being for the ultrawealthy and others for more middle income folks.(This is partly the result of varying costs to belong to different frats/sororities.) There can be great variations in the cost of student housing so kids from richer families having nicer places to live. That process often accelerates after the first year, as students move off campus. Lots of kids have cars on campus, and parking lots are filled with BMWs. If you want to go to a sporting event, you pay for it--a season pass can be very expensive. At some schools, the Greek houses get the best seats because they buy big blocks of tickets.

Some public Us raise money by attracting truly wealthy out of state students at inflated prices. (Read "Paying for the Party," a sociological study of a dorm at a poorly disguised Indiana U.) At some public Us, international students are ineligible for any financial aid, and these kids are often from megawealthy families.

So, don't assume that a kid from a "donut" family--assuming there is such a thing--is automatically going to fit in better at a public U. It really does vary by school, so check out each one.

[Anonymous]

Anonymous wrote:I like this definition but it is not quite broad enough.

We can pay for it out of our checking account, right now, BUT we are fairly sure that before all the college bills come in one set of our parents or the other are going to be broke and we are going to be footing the bill. Even if they aren't there are other potential health expenses within our immediate family, not covered by insurance, that will also make paying the full bill impossible. If any of these things hanging over our head happen, we will qualify but if they don't happen until after college, we will be in trouble.

"Earn too much for need based aid, but not so much they can pay for college out of their checking account."

The financial aid calculator (CSS) used by private colleges (not state) takes things like medical expenses and supporting indigent parents into account.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The whole concept of a donut hole is bullshit. All it means is that you don't want to pay for a private college when you can afford it. People making less can't afford it and get aid. People making more can afford it but don't bitch as loudly. There is no "hole."

+1000

This is true, and somehow people who go on and on about being in the donut hole assume that someone who has a HHI of, say, $70-100K is going to have an "easy" time paying for college because their income is low enough to qualify for aid. Yeah, sure, it is... but you sure as hell aren't knocking down that sticker price to something in the realm of "affordable."

College is expensive for literally everyone. It just is a matter of perspective.

I have never heard anyone make such a statement. Ever.

[Anonymous]

Anonymous wrote:What is a donut hole family? I have read this whole thread and still cannot really figure it out. I also tried to google it and nothing came up, except this site, actually! What the heck is a donut hole family? (Admittedly, my older child is only 9, so we are not in the college prep phase yet, so maybe that is why I am out of it!)

http://www.smartplanforcollege.com/donut-hole/

https://www.washingtonpost.com/news/get-there/wp/2015/01/29/middle-class-families-are-fed-up-with-their-financial-aid-options/?utm_term=.8a00b0053f45

http://www.npr.org/2011/03/31/135016458/families-figure-out-how-to-pay-for-college