What is a "donut hole family"?

[Anonymous]

^^ for in state students

[Anonymous]

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.

If as described, then I think you are a real donut hole case. Some here on DCUM do not understand just how low the household income needs to be to qualify for need-based FA. In that situation, I would none-the-less apply for need-based FA. Some schools really are trying to provide enough FA so that more ordinary families still can send their kids to that school.

If DC happens to be going into Nursing, CS, or Engineering, then seriously consider applying for a USAF ROTC Scholarship. There is a 4-year service obligation, and pilot/navigator candidates cannot get any scholarship funding, but it can be a reasonable tradeoff.

Good luck.

[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.

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?

This was us. We had 2 kids at 30 and 33. Had just finished grad school and just started making a professional income (so $150k HHI). We didn’t really save anything for college for the first 5 years of each of the kids lives except for gifts from parents (maybe $2000 per kid total at age 5?). At 5, we put daycare dollars directly into our kids 529s (religiously put in at least $1000/mo but in later years put in more). Assuming 6% growth, in 12 years, that would be 212K today. Our senior’s account is something like that. Our salaries grew into the $300k range two years ago and even then we could comfortably have sent our kid to private college. Today we have a huge spike in salary and cash flow a decent amount but honestly it was doable since that was a financial goal we set for ourselves a long time ago. Same story with kid #2.

[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.

GTFO

It is impossible for middle class (true MC families here in MoCo) families to save. My HHI is 106k. My EFC is 28k. How was I supposed to save 100k during that time?

Zero financial aide. I’ve just recently upped my income and am lucky I get to pay as I go.

I really hate the people who just scream “you should have saved”. It’s such an elitist attitude and it’s out of touch with reality.

Thank you.

[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

I recognize you from previous threads. Why so angry?

[Anonymous]

Anonymous wrote:
It is impossible for middle class (true MC families here in MoCo) families to save. My HHI is 106k. My EFC is 28k. How was I supposed to save 100k during that time?

Does anyone know the implicit "tax rate" on savings? Sometimes if you save an extra $100K, then the college wants most of it.

[Anonymous]

Anonymous wrote: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.

This is a great post. Thank you for looking this up. So leads us to understand that we really are talking about people with a $250K plus HHI who get no aid from the schools. And honestly, at that salary, it is a choice you have to make over 18 years. Choosing to send your kids to public schools is a very good and very smart option if you haven't wanted to or een able to save.

[Anonymous]

There seems to be this belief that your salary when you have a kid in college has been your salary their entire life. We will be at 200 HHI with kids in college. But that has only been true for the last year when I got a $50K promotion. Most of my kids' lives our HHI was more like $100K, and there were also three years with one parent unemployed scattered in there.

[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.

Most people…do not save for college for 18 years. Because they are supporting their families, paying off their own student debt, and trying to save for retirement.

[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.

There's a lack of understanding that some people don't make enough for save for 50-80K a year for college WHILE paying for all their other living expenses.

[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.

There's a lack of understanding that some people don't make enough for save for 50-80K a year for college WHILE paying for all their other living expenses.

So go to a school you can afford. No one has a right to a discount at a private university. Go public!

[Anonymous]

I'm in NW DC and almost all of my friends here went to elite universities and had undergrad paid for by family.

I grew up near Reading, PA. My mother was a nurse and my father worked for the state of PA.
I had loans for undergrad, as did my entire cohort of friends. Many of us only paid off our own loans by age 30 or 35. Those who went on to professional school were still paying at age 35. My brother went
to medical school and didn't finish residency until age 32 and only then could he start aggressively paying off a huge debt and his salary as a physician is still not impressive by DCUM standards.

I think people on DCUM forget that many people are paying for their own education well into adulthood. It's a whole different life if you start off your adult life with giant loans.
The person who gives the example "well, just keep living in the house you bought at age 27!" is so out of touch. You know that many of us had NO ability to buy a house at age 27?!!! We had 100K in loans at that point and were living with 3 roommates trying to pay them off.

[Anonymous]

Anonymous wrote:I'm in NW DC and almost all of my friends here went to elite universities and had undergrad paid for by family.

I grew up near Reading, PA. My mother was a nurse and my father worked for the state of PA.
I had loans for undergrad, as did my entire cohort of friends. Many of us only paid off our own loans by age 30 or 35. Those who went on to professional school were still paying at age 35. My brother went
to medical school and didn't finish residency until age 32 and only then could he start aggressively paying off a huge debt and his salary as a physician is still not impressive by DCUM standards.

I think people on DCUM forget that many people are paying for their own education well into adulthood. It's a whole different life if you start off your adult life with giant loans.
The person who gives the example "well, just keep living in the house you bought at age 27!" is so out of touch. You know that many of us had NO ability to buy a house at age 27?!!! We had 100K in loans at that point and were living with 3 roommates trying to pay them off.

Do your kids a favor and have them graduate with minimum debt/loans. You know how limiting loans can be on your upward mobility. Send them to your state universities! Why is this so difficult?

[Anonymous]

Anonymous wrote:I'm in NW DC and almost all of my friends here went to elite universities and had undergrad paid for by family.

I grew up near Reading, PA. My mother was a nurse and my father worked for the state of PA.
I had loans for undergrad, as did my entire cohort of friends. Many of us only paid off our own loans by age 30 or 35. Those who went on to professional school were still paying at age 35. My brother went
to medical school and didn't finish residency until age 32 and only then could he start aggressively paying off a huge debt and his salary as a physician is still not impressive by DCUM standards.

I think people on DCUM forget that many people are paying for their own education well into adulthood. It's a whole different life if you start off your adult life with giant loans.
The person who gives the example "well, just keep living in the house you bought at age 27!" is so out of touch. You know that many of us had NO ability to buy a house at age 27?!!! We had 100K in loans at that point and were living with 3 roommates trying to pay them off.

Thank you!! DH and I paid off nearly $200K in student loans between the two of us. Significant job loss in 2008. One parent with chronic health issues. One kid who needs occupational therapy, regular therapy, and tutoring. We’ve saved about $100K per teenager. We can (now) cash flow the rest for public, but private college would be a better fit for at least one kid (small class sizes, extra advising, etc).

At $80K/year, we would need $640K in savings for both kids. Completely out of touch to suggest we should have that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm in NW DC and almost all of my friends here went to elite universities and had undergrad paid for by family.

I grew up near Reading, PA. My mother was a nurse and my father worked for the state of PA.
I had loans for undergrad, as did my entire cohort of friends. Many of us only paid off our own loans by age 30 or 35. Those who went on to professional school were still paying at age 35. My brother went
to medical school and didn't finish residency until age 32 and only then could he start aggressively paying off a huge debt and his salary as a physician is still not impressive by DCUM standards.

I think people on DCUM forget that many people are paying for their own education well into adulthood. It's a whole different life if you start off your adult life with giant loans.
The person who gives the example "well, just keep living in the house you bought at age 27!" is so out of touch. You know that many of us had NO ability to buy a house at age 27?!!! We had 100K in loans at that point and were living with 3 roommates trying to pay them off.

Do your kids a favor and have them graduate with minimum debt/loans. You know how limiting loans can be on your upward mobility. Send them to your state universities! Why is this so difficult?

I see you live in NW DC. That was a mistake given your limited resources for college. Move to VA or MD and take advantage of the public university system. People want it all without any sacrifices. The suburbs won’t kill you, PP.