What is a "donut hole family"?

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you cannot afford a private, you send your kids to the stat schools, simple. We have told our kids that is what we can afford and have saved since birth. We rarely take a vacation, live in a house DCUM would be embarrassed by in order to fully pay for college and graduate school. Its about priorities.

Exactly. If people would just cut back some of that avocado toast …

Yes! And just do work-study and get a summer job.

[Anonymous]

Anonymous wrote: I think the fact that top 25 universities and SLACs are no longer affordable for the middle class has contributed to the resentment of coastal elites and the rise of Trumpism. The FAFSA is structured in such a way that elite colleges are now comprised of either full pay (the top 2% of US households) or substantial need. No one is going to those colleges who is representative of what is left of the American middle class. This is not a new problem---it was around when I applied to college in the 1980s as well---though it has gotten a lot worse given that college costs have skyrocketed well past average consumer price increases over the last 3 decades.

Trumpism is stupid and the belief that you can only succeed going to a handful of schools is just plain stupid as well. Encourage your kids to attend the less expensive schools and take on the world. They CAN - this is not Victorian England.

[Anonymous]

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 sound insufferable... you're one of those people who needs to put others down to make themselves feel better.

[Anonymous]

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.

Really?

I have trouble believing this unless you are paying for luxuries (e.g. a house that costs more than $500K, or new cars) that you think are necessities, or you are just bad at budgeting.

For me, as a MC parent, financial aid at a need blind/full need school would get us into a place where we could afford tuition, with some student loans and continuing to live a modest middle class lifestyle (e.g. house worth $400K, no vacations, scaled back retirement plans, one ten year old car etc . . . ). In my experience when families who complain that they are in some unique "donut hole" and say they "can't afford" tuition, what they actually mean is that they don't want to live like me, and that unlike a MC/LMC kid they have other options because for them there are cheaper options (e.g. instate tuition, merit aid), whereas for us the full need option is the cheapest.

A house that costs $500k is a luxury? We couldn’t find anything that fit what we needed for anywhere close to that. And we were looking outside the beltway.

I'd love to know where you live in the DMV that your home is $400,000? 🧐

[Anonymous]

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, pp, are a shit. God Bless that you were never bankrupt or nearly bankrupt from non-covered medical expenses, never had to support other family members, etc. FU

[Anonymous]

Anonymous wrote:

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.

Really?

I have trouble believing this unless you are paying for luxuries (e.g. a house that costs more than $500K, or new cars) that you think are necessities, or you are just bad at budgeting.

For me, as a MC parent, financial aid at a need blind/full need school would get us into a place where we could afford tuition, with some student loans and continuing to live a modest middle class lifestyle (e.g. house worth $400K, no vacations, scaled back retirement plans, one ten year old car etc . . . ). In my experience when families who complain that they are in some unique "donut hole" and say they "can't afford" tuition, what they actually mean is that they don't want to live like me, and that unlike a MC/LMC kid they have other options because for them there are cheaper options (e.g. instate tuition, merit aid), whereas for us the full need option is the cheapest.

A house that costs $500k is a luxury? We couldn’t find anything that fit what we needed for anywhere close to that. And we were looking outside the beltway.

I'd love to know where you live in the DMV that your home is $400,000? 🧐

Wheaton, silver spring, Rockville.

[Anonymous]

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, pp, are a shit. God Bless that you were never bankrupt or nearly bankrupt from non-covered medical expenses, never had to support other family members, etc. FU

We have a special need child and take care of a family member as in our home, 24-7 care, no money. We also don’t have a huge income. We live within our means and prioritize college. I cannot even tell you the last vacation we took.

[Anonymous]

Anonymous wrote:Do you have to qualify financially for merit aid?

Top colleges don't give merit scholarships. Aid is need based not merit based.

[Anonymous]

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

When you don't get aid and have to pay full price which you can't afford without jeopardizing upper middle class dwelling or retirement.

[Anonymous]

I love data.

People who are saying families with $150-250k incomes aren't receiving need-based financial aid.....have you actually done a net price calculator? Has your child gone through the process and your aid award wasn't what the college said it would be on their website or places like https://myintuition.org/?

You can very quickly and easily play around on https://myintuition.org/ to see what different schools expect you to pay.

For a family with $200k HHI, $650k home value, $100k in liquid savings (cash), $1M in retirement, and $175k in non-retirement investments, schools would expect you to pay (none of these include loans):
$58k - Amherst
$51k - Brown
$59k - Dartmouth
$48k - Harvard
$52k - Williams

For a family with $185k HHI, $650k home value, $100k in liquid savings (cash), $1M in retirement, and $175k in non-retirement investments, I got the following cost (none of these include loans):
$55k - Amherst
$47k - Brown
$55k - Dartmouth
$42k - Harvard
$48k - Williams

For a family with $150k HHI, $650k home value, $100k in liquid savings (cash), $1M in retirement, and $175k in non-retirement investments, I got the following cost (none of these include loans):
$44k - Amherst
$38k - Brown
$45k - Dartmouth
$28k - Harvard
$38k - Williams

The Fed says UMC is roughly $75k-$127k HHI. Only 9% of Americans have $100k or more (on average) in savings. There's less clear data on what the average UMC person has in investment funds - most research includes it in "savings." So let's do this again with what is probably considered the typical UMC, and keep the house and retirement values the same (though these are really high compared to the reality of "most" Americans):

For this family -- $127k HHI, $650k home value, $60k in liquid savings (cash), $1M in retirement, $50k in non-retirement investments, colleges would expect a student/family to pay:
$30k - Amherst
$25k - Brown
$30k - Dartmouth
$14k - Harvard
$31k - Yale

The people who get "no aid" with $150k HHI are the people who have significant non-retirement assets (investments/cash). Colleges do NOT consider retirement funds in calculating your financial aid.

[Anonymous]

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.

ok. How does a couple married at 26 with student loans and earning 200k by the time their oldest is in college, but whose earnings were closer to 100k combined for most of the kid's life (i.e. reasonable salaries outside of high COL cities) afford an expensive college? The family never would have earned sufficiently to save enough, but they don't qualify for aid. There is nothing right or wrong/moral or amoral about it, it's just a financial status

If they had stayed in the home they could afford at 26 they would have the ability to save. I mean that’s literally me (admittedly we married at 27 not 26 but otherwise). No upgraded house. 10 yr old cars. Modest house with no guest bedroom.

At 27 I was a single parent person living in a one bedroom apartment. Now I’m married with three teenagers. Do you really think the only reasonable decision was to continue to live in the one bedroom to save for college?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

Really?

I have trouble believing this unless you are paying for luxuries (e.g. a house that costs more than $500K, or new cars) that you think are necessities, or you are just bad at budgeting.

For me, as a MC parent, financial aid at a need blind/full need school would get us into a place where we could afford tuition, with some student loans and continuing to live a modest middle class lifestyle (e.g. house worth $400K, no vacations, scaled back retirement plans, one ten year old car etc . . . ). In my experience when families who complain that they are in some unique "donut hole" and say they "can't afford" tuition, what they actually mean is that they don't want to live like me, and that unlike a MC/LMC kid they have other options because for them there are cheaper options (e.g. instate tuition, merit aid), whereas for us the full need option is the cheapest.

A house that costs $500k is a luxury? We couldn’t find anything that fit what we needed for anywhere close to that. And we were looking outside the beltway.

I'd love to know where you live in the DMV that your home is $400,000? 🧐

Wheaton, silver spring, Rockville.

Agree as I live there but that was more like 2018. You could get a small not very nice Levittown era house for that much. Now those are more expensive. And getting torn down

[Anonymous]

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.

ok. How does a couple married at 26 with student loans and earning 200k by the time their oldest is in college, but whose earnings were closer to 100k combined for most of the kid's life (i.e. reasonable salaries outside of high COL cities) afford an expensive college? The family never would have earned sufficiently to save enough, but they don't qualify for aid. There is nothing right or wrong/moral or amoral about it, it's just a financial status

If they had stayed in the home they could afford at 26 they would have the ability to save. I mean that’s literally me (admittedly we married at 27 not 26 but otherwise). No upgraded house. 10 yr old cars. Modest house with no guest bedroom.

At 27 I was a single parent person living in a one bedroom apartment. Now I’m married with three teenagers. Do you really think the only reasonable decision was to continue to live in the one bedroom to save for college?

State schools are a reasonable choice.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

Really?

I have trouble believing this unless you are paying for luxuries (e.g. a house that costs more than $500K, or new cars) that you think are necessities, or you are just bad at budgeting.

For me, as a MC parent, financial aid at a need blind/full need school would get us into a place where we could afford tuition, with some student loans and continuing to live a modest middle class lifestyle (e.g. house worth $400K, no vacations, scaled back retirement plans, one ten year old car etc . . . ). In my experience when families who complain that they are in some unique "donut hole" and say they "can't afford" tuition, what they actually mean is that they don't want to live like me, and that unlike a MC/LMC kid they have other options because for them there are cheaper options (e.g. instate tuition, merit aid), whereas for us the full need option is the cheapest.

A house that costs $500k is a luxury? We couldn’t find anything that fit what we needed for anywhere close to that. And we were looking outside the beltway.

I'd love to know where you live in the DMV that your home is $400,000? 🧐

Wheaton, silver spring, Rockville.

Was easier 10 years ago, for that price you really get the dregs now.

[Anonymous]

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.

ok. How does a couple married at 26 with student loans and earning 200k by the time their oldest is in college, but whose earnings were closer to 100k combined for most of the kid's life (i.e. reasonable salaries outside of high COL cities) afford an expensive college? The family never would have earned sufficiently to save enough, but they don't qualify for aid. There is nothing right or wrong/moral or amoral about it, it's just a financial status

If they had stayed in the home they could afford at 26 they would have the ability to save. I mean that’s literally me (admittedly we married at 27 not 26 but otherwise). No upgraded house. 10 yr old cars. Modest house with no guest bedroom.

At 27 I was a single parent person living in a one bedroom apartment. Now I’m married with three teenagers. Do you really think the only reasonable decision was to continue to live in the one bedroom to save for college?

State schools are a reasonable choice.

I love how people act like state schools are still cheap. UMD is $30k per year with room and board! That’s insane. Sone states have managed to keep it cheaper (I’m a SUNY alum and sone of those are still in the low $20s).