Do you make $400,000 a year but feel broke?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Straw man doesn't me a what you think it means

It is a straw man, because the family in the hypothetical wouldn't be bypassing private because "they don't want to pay what someone charges you," they'd be bypassing because they can't rationally afford private.

If your position is that private school tuition should not be priced so that every family can rationally afford private school, that's fine. If your position is that the assumptions in the hypothetical are too conservative (e.g., you think a family of 4 has more than $120k available even after cutting out the fat on a $250k net income), that's fine. Many of the responses here keep flipping back and forth between the two arguments.

All "rationally afford" it means is "what I want to pay"

You're not really reading closely then. I am not in the position of the hypothetical family. In that hypothetical, the family has $400k HHI, which I'm assuming to be $250k of net income. My question is whether it's rationally affordable for that family to pay 4 $30,000 full freight tuitions, on the assumption that $120k represents all a family in that situation would save (inclusive of retirement) on that net income, even living modestly.

If you accept all of those assumptions, my position is that it would be good policy for a school to provide a small grant. For example, $10-20k in the aggregate for the 4 kids, such that the family is devoting $100k of the $120k available (which would allow them to fund their 401k for example).

Now, if you want to argue that I'm way to conservative suggesting there's only $120k of available funds and you think that family has fat to cut in their budget in this situation, that's perfectly ok too, but then make that argument. On the other hand, if you accept the assumptions and think the system should essentially preclude them from choosing private (as asking them to save zero each year would be economically irrational), that's ok too. My position is simply that if you accept the economic assumptions, it would be appropriate for the aid system to provide them a small grant, as they would be making more than enough financial sacrifice.

[Anonymous]

An annual household income of $400,000 would put this hypothetical financial aid-receiving family of four in the top 3 percent of household income in the D.C. area.

But aid for the top 3 percent does seem like a reasonable proposition when the only alternative is to force them to save less than $100,000 a year.

[Anonymous]

Anonymous wrote:An annual household income of $400,000 would put this hypothetical financial aid-receiving family of four in the top 3 percent of household income in the D.C. area.

But aid for the top 3 percent does seem like a reasonable proposition when the only alternative is to force them to save less than $100,000 a year.

You really, really need to retread that sentence and realize how idiotic you sound. I can only guess that you're some sort of lawyer who enjoys arguing for its own sake if you're willing to try to defend that statement.

[Anonymous]

Anonymous wrote:An annual household income of $400,000 would put this hypothetical financial aid-receiving family of four in the top 3 percent of household income in the D.C. area.

But aid for the top 3 percent does seem like a reasonable proposition when the only alternative is to force them to save less than $100,000 a year.

In the hypothetical, it's a question of whether they're asked to save $20k or zero year year. There's complete agreement that a family receiving any financial aid should never also be saving anything close to $100k - this is yet another straw man.

As for their percentile, it doesn't really have anything to do with whether they can afford the cost involved.

[Anonymous]

Obviously, "retread" = "reread"

[Anonymous]

Anonymous wrote:

Anonymous wrote:An annual household income of $400,000 would put this hypothetical financial aid-receiving family of four in the top 3 percent of household income in the D.C. area.

But aid for the top 3 percent does seem like a reasonable proposition when the only alternative is to force them to save less than $100,000 a year.

You really, really need to retread that sentence and realize how idiotic you sound. I can only guess that you're some sort of lawyer who enjoys arguing for its own sake if you're willing to try to defend that statement.

Again, please cite the post where anyone has suggested a family should be able to save anything near $100k per year and still qualify for any aid.

[Anonymous]

Anonymous wrote:

Anonymous wrote:An annual household income of $400,000 would put this hypothetical financial aid-receiving family of four in the top 3 percent of household income in the D.C. area.

But aid for the top 3 percent does seem like a reasonable proposition when the only alternative is to force them to save less than $100,000 a year.

You really, really need to retread that sentence and realize how idiotic you sound. I can only guess that you're some sort of lawyer who enjoys arguing for its own sake if you're willing to try to defend that statement.

Couldn't possibly have been meant ironically, then?

[Anonymous]

Do you realize it's ridiculous to feel stretched because you can "save less than 100K per year?" Let's say after 401K contributions and taxes you net 250K. If you had four kids (which honestly, most families have 2-3 kids, but whatever), and you spent it on private school tuition, you would still have 130K to live on as a family of six. Plenty of people do this--yes, even in high COL areas. Maybe you would have to live in a smaller house or in a less desirable neighborhood (usually housing is one of the biggest factors here)--but honestly if you're not worried about good public schools, I'm sure you could get a lot more house for your money (of course then you might need to live around people who are really not rich...maybe it would be good for perspective!).

Or alternately, if you don't want to live in a small house in a less desirable neighborhood, you can choose to buy a very expensive house in a neighborhood that has excellent public schools and high property taxes. Then you won't have the money left over for private school, but either way your kids are getting an excellent education.

Either way, you have choices and they are both good choices in terms of educating your children.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I feel the same way, but I don't want to send my kids to private school. I want a boat.

People making $400K should be entitled to a discount on boats. After maxing out retirement savings and 529s, paying student loans and mortgage, and eating out (only 1-2x per week), there simply isn't enough left to pay for a boat.

I deserve a boat. I should get a discount so I can have one.

By equating independent schools with buying a boat, you're intentionally attempting to perpetuate an exclusionary system where wealthy/legacy children are entitled to exclusive opportunities regardless of merit. According to the National Association of Independent Schools, financial aid "supports the drive to provide opportunity to the best and brightest, regardless of their economic circumstances."

I realize it's a controversial stance to suggest that every family should have an opportunity to rationally afford independent schools, but that's my position.

the key is rationally afford. i believe someone with 400k can rationally afford private school if that is their priority.

Yes, that is the key. As noted multiple times, there's unanimous agreement that a family on $400k HHI can afford one private school tuition, full stop. However, if you flip to an example of four kids, with earning power being a recent phenomenon and no real wealth/savings/equity backing it up, it's definitely conceivable that a family on $400k could not rationally afford $120k full freight.

would a private school really give FA in this case? seems like a stretch to me.

The debate isn't necessarily whether they would, but whether they should.

Again, if you assume hypothetically that a family in that situation, living modestly, has an ability to save $120k, my position the system should given them some small award - let's say $2,500 to $5,000 per kid. I think a family devoting $100-110k of a total $120k availability is being asked to do more than enough, and should not be asked to pay the exact same amount as a similar family making $1M (who can afford $120k and still save 80% of their available disposable income).

Similarly, for the poster earlier who was paying full freight with one kid on $150k HHI, I'd construct the system to give them some level of aid as well, as even paying 80% of full freight on 150k is a hundred times more burdensome than paying 100% full freight to a family making $600k-$1M.

If you take the Republican idea of reforming the tax code into two marginal tax brackets, that's basically what you have right now in the financial aid system. It's much less progressive than the tax code.

wait wait wait wait - you want a financial reward, for being rich enough to save $120k per year? isn't being able to save $120k per year the financial reward?

[Anonymous]

I absolutely think it is fine to ask a family who nets almost $21k/month to spend $10k of that on private school if they want to send 4 kids to private school. I find it totally absurd that someone who had 4 kids in that financial situation and wanted to send them to private school would ever think of asking someone who makes more to subsidize it. Have fewer kids, choose a cheaper school, cut back elsewhere or choose public. Lots of choices. Lots of families live on $11k/month quite easily.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ummm….most of the elite private schools were started to separate the wealthy/elite from the masses in the public schools. It's got nothing to do with the financial aid system.

If your view is that independent schools exist for the purpose of educating the wealthy/elite and that's how it should stay, that's fine, but then don't disingenuously make arguments about why families can afford it in situations where it's clearly not rational.

I hadn't previously posted in this thread. I was just baffled by (among many other things about OP) the sense that the financial aid policies are somehow making the schools elitist (or at best, bimodal). To mean "private school" = places like Choate and Deerfield and Exeter and St. Paul's, because I grew up in New England. I guess around here it's St Albans and Sidwell. I'm not counting Catholic or other religious schools, just the elite private schools, and those are, and always have been, elite. The wealthiest have always had the best access to those schools. I have never before heard someone argue (let alone so strenuously) that there should be compulsory financial aid programs, financed by the wealthiest, to make these schools more affordable. It's bizarre.

Not just to make them more affordable - but to make them more affordable to people pulling in $400k per year!

I see lots of great arguments for financial aid for folks who grew up without some middle class advantages. I see lots of great arguments for giving financial aid to kids who show some sort of exceptional talent. I do not see even one non-ridiculous argument for giving financial aid to kids whose parents are earning $400k!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:NP here. You have a weird sense of entitlement to a private school education. You remind me of one of my college roommates. Both her parents were doctors, she lived in a huge house on Long Island, brought more clothes with her than I had ever owned in my whole life, and yet managed to qualify for a work-study job. Plenty of other families made sacrifices and paid full freight. It's obnoxious to spend your money and expect others to pay for your kids schooling.

This is yet another straw man argument. Nobody is saying your roommate should have gotten aid.

How is it different than your argument that a family making $400k a year should get aid for private school? Either spend less money, or go to a cheaper school.

Because your roommate wasn't in a situation where her parents were asked to allocate 100% of their saveable income (in a situation with no accumulated wealth, unlike your roommates' parents) towards 4 tuition payments - to the point of not even funding her parent's 401k.

Let's assume that the family on Sister Wives makes $400k pretax. Your position is that each of their kids are entitled brats if they seek a dime of financial aid because $400k can support unlimited tuition payments, full stop?

All of these examples are relative - in the vast majority of cases, a family with $400k HHI would not need any aid. But there are certainly rare circumstances when it would be justifiable.

And what if you had five kids? And what if you had 10? How many of your kids do other people have to pay for to go to private school because you like saving $120k per year?!

[Anonymous]

Anonymous wrote:

Anonymous wrote:An annual household income of $400,000 would put this hypothetical financial aid-receiving family of four in the top 3 percent of household income in the D.C. area.

But aid for the top 3 percent does seem like a reasonable proposition when the only alternative is to force them to save less than $100,000 a year.

In the hypothetical, it's a question of whether they're asked to save $20k or zero year year. There's complete agreement that a family receiving any financial aid should never also be saving anything close to $100k - this is yet another straw man.

As for their percentile, it doesn't really have anything to do with whether they can afford the cost involved.

If they choose to send four children to expensive private schools and thus can't save any money, that's up to them; not sure why they'd hypothetically expect anyone to subsidize that choice.

Also: Is it only rich families sending multiple kids to private schools who ought to be guaranteed at least $20,000 in annual savings? Or is there somewhere those of us who earn far less than $400,000 a year, have fewer than four kids, and send them to public schools can sign up for that offer?

[Anonymous]

This whole thread is utterly insane. Figure out what you need to be saving FIRST. Then look at what you have left over to pay for things like a bigger mortgage or private school. If there isn't enough, stay in your small house and send to public. If you get a raise, increase your savings FIRST them make a choice about the bigger mortgage or private school. Jesus. It's not that difficult, people.

[Anonymous]

Anonymous wrote:

Anonymous wrote:So what you're saying is that the more children you have, the more freebies you should get?

If you were making $15K, wouldn't everyone on this board be telling you you shouldn't have had so many kids?

That's a very punitive and elitist mindset. While I wouldn't advise a family making $15k to have 4 kids, I wouldn't describe their kids getting need-based financial aid (or other social programs they may qualify for) as "freebies". Their kids are deserving of having educational opportunities too and shouldn't be stigmatized the way you are doing.

But there are lots of great publc schools (!) We have a $400K HHI and aren't interested in private school for our kids at any price.