How do most middle to UMC families pay for college?

[Anonymous]

529 college plans and student loans

[Anonymous]

Anonymous wrote:The medical school loan cap is a disaster for countries such as mine that offer free medical education. My cousin finished med school 2 years ago. His entire education was paid of by the government. She was the only surgeon serving in an African city and was doing several surgeries a day. Guess what? She is in the process of moving here. She got a special visa I don't know the details to come practice medicine here. In my country she couldn't even afford a car. Essentially the US will suck up a bunch of doctors from overseas. Sounds familiar? That's how wal street shiped jobs to China in the 90s. That's how the Valley imported cheaper Tech workers. The American capitalist system is obsessed with getting richer and richer and richer.

This is a disaster because the medical training of an American is of higher quality than that of an African. My cousin told me that apparently you start med school right after HS in my country.

There is already a trend of burse practitioners replacing doctors. The use of AI in medicine will be accelerated. Robotics will be accelerated as well. Hedge funds will take over practices and hospitals. Michael Douglas famously said "greed is good". I don't think a lot Americans understand what it means to them when you give a bunch of billionaires 4 years to remake your economy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Life in the donut hole is brutal. Oldest went to Honors College at state flagship (small scholarship), second went OOS with large merit scholarship. Who knows what the third will do.

The donut hole is a myth created by parents who did not plan well. College isn’t exactly a surprise. You have two decades to save.

It’s the same for retirement.

Not everyone has money leftover each month to save. I really didn’t make ends meet for years and when I did, I didn’t have money leftover to save.

Having a lower income and not being able to save is different from someone making 150-600K or mor eand screaming poverty.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Life in the donut hole is brutal. Oldest went to Honors College at state flagship (small scholarship), second went OOS with large merit scholarship. Who knows what the third will do.

The donut hole is a myth created by parents who did not plan well. College isn’t exactly a surprise. You have two decades to save.

It’s the same for retirement.

Not everyone has money leftover each month to save. I really didn’t make ends meet for years and when I did, I didn’t have money leftover to save.

Having a lower income and not being able to save is different from someone making 150-600K or mor eand screaming poverty.

Do you think a family of 4 with a mortgage making say $300k/year in high cost of living area will be able to fully save for their own retirement to last then 30 years and also for full college for their 2 kids.

I'm single and make $130k. I know I can't. So I'm wondering if a couple with 2 kids making twice my salary combined can do it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Life in the donut hole is brutal. Oldest went to Honors College at state flagship (small scholarship), second went OOS with large merit scholarship. Who knows what the third will do.

The donut hole is a myth created by parents who did not plan well. College isn’t exactly a surprise. You have two decades to save.

It’s the same for retirement.

Not everyone has money leftover each month to save. I really didn’t make ends meet for years and when I did, I didn’t have money leftover to save.

Having a lower income and not being able to save is different from someone making 150-600K or mor eand screaming poverty.

Those people probably didn’t always make that much. Now if you’ve made $250k from the time your kids were born, you should’ve started saving then.

[Anonymous]

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Anonymous wrote:I for the life of me do not understand how this country let college cost be determined by parent income. Middle class and UMC are in no more financial position to pay for college than those making 50-60k a year, unless those MC and UMC forewent houses, cars, etc. - which would undermine a large portion of the economy. The fact that the equity in my home is considered accessible to pay for college is ludicrous. The whole system is broken, very broken.

This is ludicrous, as it relates to UMC families. We are UMC, and have saved more than $300k in various 529s for our rising senior's college tuition and other college expenses. That's sufficient, when including available cashflow, for one kid to attend a private college, or two to attend state schools. And that was not, by any means, the limit to what we could have saved; we stopped dedicated college savings a few years ago and redirected to a taxable account, to provide more flexibility.

It requires planning, and dedication to savings, but UMC families can (and should, in my view) absolutely pay for their children's college. Or are you one of those people who whines that you shoudl get financial aid on your $350k income because you have overspent for decades?

Also, please tell us why why home equity shouldn't be included in financial aid calculations, and if it isn't, how abuses can be curtailed.

You are the exception. You still are not in a position to pay full freight at Gettysburg College or Washington and Lee without an impact on you. But in the latter, a kid’s whose parents make $80k or below goes for free.

The system also does not account for the fact that people make more money as their kids grow up, so capturing the income made the year prior to college is just a snapshot.

If we are the exception, it's because other people choose not to prioritize college savings.

Also, you have dramatically shifted the goalposts - from "UMC are in no more financial position to pay for college than those making 50-60k a year" (which is obviously nonsense) to "well, you can't pay for a private college 'without an impact on you.'" Sure. If the measuring stick you are using is that "college is unaffordable if you can't pay for it out of pocket change," then of course virtually no one will satisfy it.

Rather than nit picking my personal situation, please address the larger point - that if UMC families start saving early and stick to it (as another PP said, slow and steady) they will have substantial college savings by the time their kid(s) are college age. How much for any given college depends on a variety of factors, such as market performance, number of children, etc. And as you say, their incomes likely will have risen by then, which means they can pay for some costs out of earnings. Unless, of course, they have increased their lifestyle in conjunction with their larger paychecks - which, again, doesn't make college unaffordable. It just means that they didn't prioritize it.

Still waiting for some principled reason as to why home equity shouldn't be considered in financial aid calculations.

Home equity comprises part of people's financial plans in that it is generally considered the best practice to pay off the mortgage on the primary home before retirement. This enables retirees to live on a fixed income more easily.

For older parents especially, this is very important. If a parent will retire within a few or several years of having children in college, the parents have no time to recoup the loss of home equity that was tapped for college expenses.

This translates to either "it is not financially optimal to use this asset for college" or "if I use this asset to pay for college, I may not be able to retire as easily as I otherwise might."

Neither of those is compelling. In fact, they're both ridiculous. At the end of the day, you are still asking for financial aid so that you don't have to tap one of your assets.

Also, please tell us why why retirement accounts shouldn't be included in financial aid calculations.

Because you cannot access those unless you are old enough.

You can borrow against them, just as you can borrow against home equity.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Life in the donut hole is brutal. Oldest went to Honors College at state flagship (small scholarship), second went OOS with large merit scholarship. Who knows what the third will do.

The donut hole is a myth created by parents who did not plan well. College isn’t exactly a surprise. You have two decades to save.

It’s the same for retirement.

This gives into the myth of it all - that the income level of families when their kids go to college was the same or equivalent when that child was born. The system does not account for upward career and financial mobility of families and relies on a snapshot of current income and assets.

This!! When our only child was born, we made 60K combined. Our upward trajectory has been very staccato. And of course we were and are way behind to have any kind of a decent retirement. I wish there were an 18 year look back… it’s fine, we’ll figure it out, but it is so odd and unhelpful that they assume that you have been making your current income for 18 years, and thus could have been saving the staggering amount of money needed. We absolutely could not have.

[Anonymous]

Anonymous wrote:How the hell are people going to afford med school?

Full ride undergrad - Alabama, Arizona, UT Dallas, etc. All great pre-med schools to get what you need for med admission (labs, clinical).

[Anonymous]

Anonymous wrote:The medical school loan cap is a disaster for countries such as mine that offer free medical education. My cousin finished med school 2 years ago. His entire education was paid of by the government. She was the only surgeon serving in an African city and was doing several surgeries a day. Guess what? She is in the process of moving here. She got a special visa I don't know the details to come practice medicine here. In my country she couldn't even afford a car. Essentially the US will suck up a bunch of doctors from overseas. Sounds familiar? That's how wal street shiped jobs to China in the 90s. That's how the Valley imported cheaper Tech workers. The American capitalist system is obsessed with getting richer and richer and richer.

This is a disaster because the medical training of an American is of higher quality than that of an African. My cousin told me that apparently you start med school right after HS in my country.

Yes in many, many countries, med school is three years of school after high school and no residency program, etc. That's one step up from Dr. Google.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Life in the donut hole is brutal. Oldest went to Honors College at state flagship (small scholarship), second went OOS with large merit scholarship. Who knows what the third will do.

The donut hole is a myth created by parents who did not plan well. College isn’t exactly a surprise. You have two decades to save.

It’s the same for retirement.

Not everyone has money leftover each month to save. I really didn’t make ends meet for years and when I did, I didn’t have money leftover to save.

Having a lower income and not being able to save is different from someone making 150-600K or mor eand screaming poverty.

Do you think a family of 4 with a mortgage making say $300k/year in high cost of living area will be able to fully save for their own retirement to last then 30 years and also for full college for their 2 kids.

I'm single and make $130k. I know I can't. So I'm wondering if a couple with 2 kids making twice my salary combined can do it.

Yes. Having two incomes even with an extra kid (so two kids) eases the burden of living expenses. Adding an extra child to feed doesn't double the cost of food for kids.

Utilities and housing costs are shared, so it's easier for two income families than a single parent.

I do think it's harder for single parents.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Life in the donut hole is brutal. Oldest went to Honors College at state flagship (small scholarship), second went OOS with large merit scholarship. Who knows what the third will do.

The donut hole is a myth created by parents who did not plan well. College isn’t exactly a surprise. You have two decades to save.

It’s the same for retirement.

Not everyone has money leftover each month to save. I really didn’t make ends meet for years and when I did, I didn’t have money leftover to save.

Having a lower income and not being able to save is different from someone making 150-600K or mor eand screaming poverty.

Do you think a family of 4 with a mortgage making say $300k/year in high cost of living area will be able to fully save for their own retirement to last then 30 years and also for full college for their 2 kids.

I'm single and make $130k. I know I can't. So I'm wondering if a couple with 2 kids making twice my salary combined can do it.

You have a spending problem. Now you are single and making a very very good salary. You can live like you make half and still live well. Then, save the rest now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Life in the donut hole is brutal. Oldest went to Honors College at state flagship (small scholarship), second went OOS with large merit scholarship. Who knows what the third will do.

The donut hole is a myth created by parents who did not plan well. College isn’t exactly a surprise. You have two decades to save.

It’s the same for retirement.

+1000

And none of the, we weren't making $250k 18 years ago. If you were making less you could have chosen to save most of your increases for college/retirement.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Life in the donut hole is brutal. Oldest went to Honors College at state flagship (small scholarship), second went OOS with large merit scholarship. Who knows what the third will do.

The donut hole is a myth created by parents who did not plan well. College isn’t exactly a surprise. You have two decades to save.

It’s the same for retirement.

Not everyone has money leftover each month to save. I really didn’t make ends meet for years and when I did, I didn’t have money leftover to save.

Then you attend state u or any school that gives great merit and that you can afford. Or your kid lives at home does cc then onto state u. There are many ways to do college affordable. It just might not be 90k per year private schools. And that's a choice you made not to find a way to save. But the other 95% of universities can be affordable

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Life in the donut hole is brutal. Oldest went to Honors College at state flagship (small scholarship), second went OOS with large merit scholarship. Who knows what the third will do.

The donut hole is a myth created by parents who did not plan well. College isn’t exactly a surprise. You have two decades to save.

It’s the same for retirement.

Not everyone has money leftover each month to save. I really didn’t make ends meet for years and when I did, I didn’t have money leftover to save.

What you are saying will fall on many of the maniacs death ears on this forum. I'm very fortunate and wealthy. I do consider myself lucky and sympathize with people who arent so fortunate. It's actually true some people just don't make enough. It's funny, the reason many of us are wealthy is because there are generations of Americans who are stuck in low wages loop and work in the service sector that serve us at low costs. The peoples kids are likely going to serve our kids as well.

But the "not having money left over" is all relative. I know people who don't save yet they dine out a few times per month th, drive newer cars, take vacations, etc. they have ways to save some if they wanted.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Life in the donut hole is brutal. Oldest went to Honors College at state flagship (small scholarship), second went OOS with large merit scholarship. Who knows what the third will do.

The donut hole is a myth created by parents who did not plan well. College isn’t exactly a surprise. You have two decades to save.

It’s the same for retirement.

Not everyone has money leftover each month to save. I really didn’t make ends meet for years and when I did, I didn’t have money leftover to save.

Having a lower income and not being able to save is different from someone making 150-600K or mor eand screaming poverty.

Do you think a family of 4 with a mortgage making say $300k/year in high cost of living area will be able to fully save for their own retirement to last then 30 years and also for full college for their 2 kids.

I'm single and make $130k. I know I can't. So I'm wondering if a couple with 2 kids making twice my salary combined can do it.

to save for state u/$35k per year, yes.
And if they want more they will choose how to save