What is a "donut hole family"?

[Anonymous]

Anonymous wrote:I do wonder what the atmosphere is like at these expensive private schools. With really no middle class kids there at all. Doesn’t sound like a nice environment.

+1. Something to think about

[Anonymous]

Anonymous wrote:

Anonymous wrote:I do wonder what the atmosphere is like at these expensive private schools. With really no middle class kids there at all. Doesn’t sound like a nice environment.

+1. Something to think about

What are you guys talking about? Middle class people are there and going for free.

[Anonymous]

I'm a public school grad and happy to send my kid to a public or to a less competitive school with merit aid if she can get it. I don't think people who go to Ivies are automatically smarter or even better educated -- I've worked with many and it's just not the case.

However, this thread is FULL of people who are basically saying that middle class families should know their place. It's... gross. 90% of college threads on this site are about how important it is to go to an "elite" or name brand school, and now when people who can't afford those schools complain that they can't afford those schools, it's " why can't you be happy with a public school, not everyone has to go to Harvard?" I am happy with my own education and will be happy with wherever my DD goes, but I do find the attitude that people like us shouldn't aspire to going to these colleges pretty offensive. I would have done well at an Ivy -- I was a straight A student who loved school and had great study habits, and I later did very well at an "elite" law school. The fact that its was not possible for me to go without bankrupting my family is weird. It worked out fine, but it's weird to think that's an appropriate outcome.

[Anonymous]

Anonymous wrote:I'm a public school grad and happy to send my kid to a public or to a less competitive school with merit aid if she can get it. I don't think people who go to Ivies are automatically smarter or even better educated -- I've worked with many and it's just not the case.

However, this thread is FULL of people who are basically saying that middle class families should know their place. It's... gross. 90% of college threads on this site are about how important it is to go to an "elite" or name brand school, and now when people who can't afford those schools complain that they can't afford those schools, it's " why can't you be happy with a public school, not everyone has to go to Harvard?" I am happy with my own education and will be happy with wherever my DD goes, but I do find the attitude that people like us shouldn't aspire to going to these colleges pretty offensive. I would have done well at an Ivy -- I was a straight A student who loved school and had great study habits, and I later did very well at an "elite" law school. The fact that its was not possible for me to go without bankrupting my family is weird. It worked out fine, but it's weird to think that's an appropriate outcome.

It’s not weird. It’s accepting that these schools aren’t meritocracies, taking on whatever kids could do well at whatever price their parents want to pay. I mean I could have been an excellent horseback rider, but it’s no great tragedy that I couldn’t afford it. Yes, competitive horseback is for rich people and that’s fine. There’s nothing important about being a horseback rider or ivy grad. It’s not a mark of raw superiority.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm a public school grad and happy to send my kid to a public or to a less competitive school with merit aid if she can get it. I don't think people who go to Ivies are automatically smarter or even better educated -- I've worked with many and it's just not the case.

However, this thread is FULL of people who are basically saying that middle class families should know their place. It's... gross. 90% of college threads on this site are about how important it is to go to an "elite" or name brand school, and now when people who can't afford those schools complain that they can't afford those schools, it's " why can't you be happy with a public school, not everyone has to go to Harvard?" I am happy with my own education and will be happy with wherever my DD goes, but I do find the attitude that people like us shouldn't aspire to going to these colleges pretty offensive. I would have done well at an Ivy -- I was a straight A student who loved school and had great study habits, and I later did very well at an "elite" law school. The fact that its was not possible for me to go without bankrupting my family is weird. It worked out fine, but it's weird to think that's an appropriate outcome.

It’s not weird. It’s accepting that these schools aren’t meritocracies, taking on whatever kids could do well at whatever price their parents want to pay. I mean I could have been an excellent horseback rider, but it’s no great tragedy that I couldn’t afford it. Yes, competitive horseback is for rich people and that’s fine. There’s nothing important about being a horseback rider or ivy grad. It’s not a mark of raw superiority.

But the competitive horseback riding people don't go around telling people that they are ruining their kids lives if they aren't getting them into horseback riding. That if they can't ride horses they should just give up and not do any kind of sport at all. That they should go into debt because the amazing experience of horseback riding is so, so worth it and if you can't to that you are some combination of a bad parent and/or irresponsible with money.

[Anonymous]

I actually think elite colleges set up the financial aid cutoffs so that academic salaries qualify for huge aid but slightly higher corporate salaries get almost none. If you have three or more kids going to these schools, I can see how marginal income between $120K and $200K could be “taxed” at over 100%!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm a public school grad and happy to send my kid to a public or to a less competitive school with merit aid if she can get it. I don't think people who go to Ivies are automatically smarter or even better educated -- I've worked with many and it's just not the case.

However, this thread is FULL of people who are basically saying that middle class families should know their place. It's... gross. 90% of college threads on this site are about how important it is to go to an "elite" or name brand school, and now when people who can't afford those schools complain that they can't afford those schools, it's " why can't you be happy with a public school, not everyone has to go to Harvard?" I am happy with my own education and will be happy with wherever my DD goes, but I do find the attitude that people like us shouldn't aspire to going to these colleges pretty offensive. I would have done well at an Ivy -- I was a straight A student who loved school and had great study habits, and I later did very well at an "elite" law school. The fact that its was not possible for me to go without bankrupting my family is weird. It worked out fine, but it's weird to think that's an appropriate outcome.

It’s not weird. It’s accepting that these schools aren’t meritocracies, taking on whatever kids could do well at whatever price their parents want to pay. I mean I could have been an excellent horseback rider, but it’s no great tragedy that I couldn’t afford it. Yes, competitive horseback is for rich people and that’s fine. There’s nothing important about being a horseback rider or ivy grad. It’s not a mark of raw superiority.

But the competitive horseback riding people don't go around telling people that they are ruining their kids lives if they aren't getting them into horseback riding. That if they can't ride horses they should just give up and not do any kind of sport at all. That they should go into debt because the amazing experience of horseback riding is so, so worth it and if you can't to that you are some combination of a bad parent and/or irresponsible with money.

I like this.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

This is an awesome graphic! Thank you PP for putting this up. Everyone needs to keep this image in mind when thinking about the unfairness of it all.

I don't think anyone disagrees that the increase in college tuition is hugely unfair.

The "donut hole" idea is based on the idea that it's more unfair to a family who makes $300K than it is to a family who makes $80K or $40K. That is what people object to.



Citation please. I have never heard the donut hole defined this way.

[Anonymous]

Anonymous wrote:We’re in that donut hole, mostly because we have three kids. But one went to UMD, one went to OOS flagship on merit scholarship (and will graduate early with APs), and one is still in high school.

All three want careers where they have to go to grad school so it didn’t make sense for us to go overboard with loans etc. for undergrad. Plus I’m still paying off my own student loan (but it will be paid off this summer)!

But the UMD kid just got into a bunch of top notch grad programs, including an Ivy. So I don’t think we really needed to pay all that extra money for a Carnegie Mellon undergrad (for example). Maybe it’s worth it if your kid isn’t going to grad school? It wasn’t for us.

Congrats to your kid!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:new poster here

Wow. I thought we were a "donut hole" family but I guess not.

What is a step below "donut hole" called? We make too much to qualify for aid, but paying for an expensive school would involve far more than "liquidating assets." It would be more like taking on a second full time job, skipping at least one meal a day, absolutely zero entertainment budget (not even cable tv or netflix) etc.

Well, there is this thing that you had 18 years to save for college. Which is what most people do.

You're assuming stagnant incomes. We have a HHI of about 225k and one in 7th and one in 8th. Three hears ago HHI was 150k. When the kids start college it will be about 250k if we continue on the same track. 160k a year in tuition is both not possible and not a number that we ever could have saved for on our incomes.

You're forgetting compounding. And there are many, many alternatives that don't cost $80,000 per year.

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.

You will also have the time that they are in college to pay as well. So you really have 9 more years to save, and for the savings to grow. And, your income will likely increase. Your kids may be eligible for merit aid at some places as well.

We were at about 80K annual when the kids were little and about $140K annual now (they are 10th and 12th). We'll have saved about 150K for them. Kid 1 is competitive for top tier schools that should give us aid tp make the cost $40/45k per year (hopefully). Could be 50/55K if our house value gets factored in (values have jumped in our hood). She also is attracting a lot of merit aid at mid tier schools. If you all make about $100k more than we do, 80k per seems doable, no? If you are saving 4k/mo, that is about 50k/year. That will compound. You may have some other savings, take a low loan amount, get help from a relative or get merit aid or go in state. You have options.

Your kid is a sophomore and therefore not "attracting" anything from potential schools.

Also, only top schools will give you grants, and those are an admissions crapshoot.

No that's the younger kid (Kid 2). I was referring to my senior (Kid 1 would be the oldest kid, hence 12th grade). Read carefully before trying to school someone with misinformation. She made an excellent departmental connection (with the chair no less) at a top school relating to her supplement, has super stats/ECs/awards, so, while it is generally a crapshoot, things look very promising at this school. May the odds be ever in her favor on the rest.

Also, what does your comment add to this discussion?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Could someone please explain, because it sounds like people with nice resources feeling entitled to more than they can afford.

No. It is a family that won’t qualify for FA but that doesn’t have the resources to reasonably handle tuition at the priciest/most elite colleges. I don’t know about families feeling entitled, but from the colleges’ standpoint it is a real problem that they are concerned about. They don’t want their student populations to come from two stratified socioeconomic groups.

This most closely describes the issue in an unbiased way. While I don’t expect massive FA, we also can’t comfortably pay for expensive private college. The colleges take into account all assets, which is great. No one should get to hide their wealth in a boat purchase. At the same time, we can’t liquidate our retirement savings. We would have to pay penalties. The government has penalties to discourage using your retirement money for non-retirement. So, we find ourselves in a spot where savings that we can’t use without expensive penalties is used to indicate we have “too much” money.

Meanwhile, our cash flow is not high, so it’s hard to swing the full cost.

Before people call me a whiner or tell me how lucky I am, I know I am lucky. I’m not complaining. We could empty our retirement accounts, but it would then lead us into poverty and that doesn’t help society or ourselves.

Retirement accounts aren't figured into financial aid assessments. Some CSS profiles do ask--but they mainly are looking to see that you haven't hidden a ton of extra assets there.

CSS schools expect you to mortgage everything, including retirement.

No, not retirement. But earnings you are putting into retirement that tax year are included in earnings. Once it's in the retirement account though, they will not count it as savings. And, many exclude or cap the equity of your primary residence. It's important to pay attention to that. Some cap at 1.2x HHI, some at 2x, some at 3x, some not at all, and some exclude it. Makes a big difference on the expected family contribution. Student earnings/savings impact far more than parent earnings/savings as well.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm a public school grad and happy to send my kid to a public or to a less competitive school with merit aid if she can get it. I don't think people who go to Ivies are automatically smarter or even better educated -- I've worked with many and it's just not the case.

However, this thread is FULL of people who are basically saying that middle class families should know their place. It's... gross. 90% of college threads on this site are about how important it is to go to an "elite" or name brand school, and now when people who can't afford those schools complain that they can't afford those schools, it's " why can't you be happy with a public school, not everyone has to go to Harvard?" I am happy with my own education and will be happy with wherever my DD goes, but I do find the attitude that people like us shouldn't aspire to going to these colleges pretty offensive. I would have done well at an Ivy -- I was a straight A student who loved school and had great study habits, and I later did very well at an "elite" law school. The fact that its was not possible for me to go without bankrupting my family is weird. It worked out fine, but it's weird to think that's an appropriate outcome.

It’s not weird. It’s accepting that these schools aren’t meritocracies, taking on whatever kids could do well at whatever price their parents want to pay. I mean I could have been an excellent horseback rider, but it’s no great tragedy that I couldn’t afford it. Yes, competitive horseback is for rich people and that’s fine. There’s nothing important about being a horseback rider or ivy grad. It’s not a mark of raw superiority.

But the competitive horseback riding people don't go around telling people that they are ruining their kids lives if they aren't getting them into horseback riding. That if they can't ride horses they should just give up and not do any kind of sport at all. That they should go into debt because the amazing experience of horseback riding is so, so worth it and if you can't to that you are some combination of a bad parent and/or irresponsible with money.

Where does anyone say people who send their kids to state flagships are financially irresponsible and should not have had kids?

[Anonymous]

Anonymous wrote:I do wonder what the atmosphere is like at these expensive private schools. With really no middle class kids there at all. Doesn’t sound like a nice environment.

It’s exactly the same as growing up in an UMC suburb. For full pay kids, it feels completely natural and normal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Nobody in their right mind thinks college cost increases over the past 25 years are not exorbitant.

and congress wants to put a cap on nurses pay, come on let's put some regulations around college costs.

I don’t disagree with you, at all. But I still don’t believe there’s any such thing as a donut hole family.

Anybody making $150K HHI will not qualify for aid, so explain to me how a family of 4 saves $400K to pay for college?

Assuming they make $70K HHI at 30 and by the time they are 45 they make $150K

By making it their top priority and living modestly in every other possible way. If they don’t want to do that, they can use publics.

Can you write out the budget for me?

Sure. You start by making $70k. You progress to making $150k, with fairly modest raises each year. You keep your expenses constant as they were at $70k. Just did the math in Excel and by simply doing that, not even investing the difference in 529s (which of course any sane person would do) it's over $430k after tax.

Keep expenses the same over 20 years...like groceries? Real estate? Taxes? Gas???????

You continue to live the same life style. Yes, there is inflation, but you don't switch to more expensive groceries, travel, cars, etc. That is how we did it. People are unreasonable with high incomes to expect aid.

[Anonymous]

Anonymous wrote:Where do you recommend the non-wealthy people who live in DC should go that is within their means? There's no state flagship (because there's no state) so your best hope is out-of-state tuition, which is still crazy expensive, even with DC TAG. Because that hasn't kept pace with inflation either.

There is UDC.