Middle class families - Are you willing to take on a ton of debt for a top college?

[Anonymous]

I understand that self employed people have to pay their own Social Security, Medicare contributions and health insurance, and yes it is more than what let's say Fed pays. But, taxes do not count towards health care no matter your employment status, we pay over 15K just our own share of health insurance with gov paying amount too, SS is also added and not in taxes. So, self employed people pay more in the end, but the rest do not count their health care and SS with their taxes. Correct me if I am wrong?

[Anonymous]

Anonymous wrote:I understand that self employed people have to pay their own Social Security, Medicare contributions and health insurance, and yes it is more than what let's say Fed pays. But, taxes do not count towards health care no matter your employment status, we pay over 15K just our own share of health insurance with gov paying amount too, SS is also added and not in taxes. So, self employed people pay more in the end, but the rest do not count their health care and SS with their taxes. Correct me if I am wrong?

I was curious and ran an impossible scenario with two self employed parents (125k net income each), one kid, paid off house (so only property taxes are deductable), no other deductions. All in Federal (including SS and Medicare), State and property gets you to 40%.

[Anonymous]

Anonymous wrote:If your kid doesn't 'speak the language' I don't see the point. They'll just end up funneling to where ever their high school friends end up, probably marrying someone from their hometown.

this was me

[Anonymous]

No.

[Anonymous]

Anonymous wrote:If your kid doesn't 'speak the language' I don't see the point. They'll just end up funneling to where ever their high school friends end up, probably marrying someone from their hometown.

I didn't speak the language, but I became smoother and better able to fit in while I was there. That wouldn't have happened at, say, UVA.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If your kid doesn't 'speak the language' I don't see the point. They'll just end up funneling to where ever their high school friends end up, probably marrying someone from their hometown.

I didn't speak the language, but I became smoother and better able to fit in while I was there. That wouldn't have happened at, say, UVA.

I disagree, UVA grads are some of the most affected people I've ever met.

[Anonymous]

What exactly is this "language" you speak of?

[Anonymous]

Anonymous wrote:What exactly is this "language" you speak of?

Money

[Anonymous]

Anonymous wrote:

Anonymous wrote:What exactly is this "language" you speak of?

Money

Well, considering there are more poor students at most Ivy League schools than UVA and about the same number of 1%ers, it seems positively moronic to go six figures in debt to learn how to act rich.

[Anonymous]

Anonymous wrote:If your kid doesn't 'speak the language' I don't see the point. They'll just end up funneling to where ever their high school friends end up, probably marrying someone from their hometown.

I highly doubt this. I didn't "speak the language" and I ended up marrying a classmate who came from a similar background that I do. He just happens to work in finance and make 7 figures now.

[Anonymous]

Anonymous wrote:

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Anonymous wrote:Yes, what is middle class in this case? 170K, 500K, 75K per year? Let's say it is around 150K. How can you justify taking a loan that is possibly half the cost of your house if your house is 400K, which is a modest house in DC metro? How can you possibly hope that you can repay that if you are mid 40s and have mortgage payments and income will not increase, but decrease with retirement. Are you going to sell your house and pay off that Parent Plus Loan and be without any savings? What am I missing? Even a cheaper in state college, with dorm, is at least 26K, and to me even 100K is a ton of money, having two kids, we are talking about 200K anyway with a regular in state school, unless you are lucky and live close to the college. Tell me how do you plan on paying that off? I certainly wouldn't consider 500K middle class, even if it might be here in DC. And I know from our own FAFSA that with an income of 150K DC got only 5K in Direct student loan for school that was over 50K per year.

According to this thread middle class are those who are paying 50% taxes on their income.

Well this is cray since we make over 600k and we don't pay 50% taxes. More like 30%. And we're definitely not middle class and can easily afford to save for our children's educations.

Throw in state income tax and imagine two self-employed workers who earn about $125k each and that could add another 20%. It's not impossible.

Yes it is. It's a graduated income tax for a reason. Two people earning 250k together do not pay more than one person making > 600k.

It's not all linear. Social security taxes are capped (first $127,200 of incomes per worker). Self-employed workers pay both worker and employer contribution (so 12.4%). Tax brackets are large ($60K to 350K is in the same 8.5% bracket in DC) and rates don't go up that much from one high bracket to another. The scenario I gave nets out at about 44.5% income tax rate. And if someone in that situation also looks at property taxes as part of the tax burden that lowers their disposable income, then talking about 50% of their income going to taxes isn't crazy.

+1 That would be us. State + Federal + Property taxes + ACA med insurance policy ($30,000 in after tax dollars) = more than 50% goes right out the door before we even start paying regular bills like full-freight college because FAFSA says we can afford college for two. Yeah, right.

Ok fine but you realize the person making over 600k still pays more right? There is not possible way he or she doesn't unless they make all their income through cap gains and the OP already nixed that possibility by mentioning the ~ 30% effective federal income rate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If your kid doesn't 'speak the language' I don't see the point. They'll just end up funneling to where ever their high school friends end up, probably marrying someone from their hometown.

I highly doubt this. I didn't "speak the language" and I ended up marrying a classmate who came from a similar background that I do. He just happens to work in finance and make 7 figures now.

+1 (except law rather than finance)

[Anonymous]

Anonymous wrote:Ok fine but you realize the person making over 600k still pays more right?

No one has disputed that claim -- largely because it has no relevance to the discussion here (maybe also because it is ambiguously framed and stated so categorically that taking it on would lead to a lot of meaningless wrangling).

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ok fine but you realize the person making over 600k still pays more right?

No one has disputed that claim -- largely because it has no relevance to the discussion here (maybe also because it is ambiguously framed and stated so categorically that taking it on would lead to a lot of meaningless wrangling).

There was at least one PP, maybe two, who were disputing this.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If your kid doesn't 'speak the language' I don't see the point. They'll just end up funneling to where ever their high school friends end up, probably marrying someone from their hometown.

I highly doubt this. I didn't "speak the language" and I ended up marrying a classmate who came from a similar background that I do. He just happens to work in finance and make 7 figures now.

+1 (except law rather than finance)

You are an outlier, so the question is if OP is gambling $200k for his DD to marry well. What did YOU do for a career? Was it worth for you or just for the marriage propects? What was your DH's background exactly?