FAFSA - is middle-class waste time applying?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would like to hear more from UMC people about how College is a special consumer good where family income shouldn’t matter and the net price should be essentially zero when literally everything else in the world is allocated by family wealth, including “free” public school (you have to be able to afford to live in the district).

You thought it was fair when you bought your way into everything else in your lifestyle, well now welcome to the big leagues.

I don't think UMC families are saying that they should be given aid. Just lamenting that they cannot afford it, even if some insist that they can. Many of us have 529 accounts, but those funds didn't grow that much, even putting in more than $2500 per year per account, and we have multiple kids. It's enough for in state, but not 80k per year. When we started saving college was a bit cheaper. Several years ago, when my DC was in MS, we looked at an expensive private. It was $60K/year. Now it's closer to $85k per year. Saving $240k is doable. Saving closer to $350K is much harder.

If you still have 20 working years, I could see how you think you can afford to pull back on funding retirement, and save later, but if you are 55+, you don't have that luxury.

Obviously, saving only $2500/year/kid is not going to produce enough for $80K/year schools in 18 years (which will cost way more than 80K then).

Majority of kids have to pick schools they can afford, most cannot afford 80K/year, or they could but smartly realize that saved money would be nice to have for grad school.

Read bolded.. we saved way more than $2500 per year per account. We have two accounts per child. Still not enough to cover $80K per year per child given that the 529 didn't grow that much.

So why write it that way? How much did you save per year? Why did the 529 not grow that much? If you dont have it all in the growth market, it may not. But that is on you, as there are 529s that allow you to do that. You can pick one (may not be your state's) that allows you to select the MF to invest in. American Funds in VA is an excellent example. My kid's funds earned 8-9% annual on average during the aggressive years. We didn't pull back until age 15/16 to less aggressive.

DP. Even with 8-9% growth, saving 20K year since 2007 only gets you to ~600K after you factor in expense ratios etc. Not enough to cover 2 kids at 80-90K schools (and that is not even Harvard but say Amherst/Colorado College.) And this simple calculation doesn't actually account for the real fluctuations (e.g. crash in 2008/2009 and again in 2020. Yes, there were rebounds, but plugging in actual numbers and accounting for management fees only gets you to the number I quoted above. Colllege costs are ridiculous right now. And before you jump in with state options, DC doesn't have a state university (obv) and DCTAG helps but not as much.

But, you can likely afford to save more than that for each kid. And, you can pay some as you go. It will be work, but you can do it on your income and still live well (unless you have big health expenses or the like).

[Anonymous]

Anonymous wrote:Don’t attend a private school unless your kid has something a college ‘wants.’ Read who gets in and why and net price calculators are your friend.

Congrats on making Seniors. Yes this is the ‘tax’ for that success - ie not choosing private sector work.

Why do people insist on providing advice and opinions on questions that were not asked by the OP?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Don’t attend a private school unless your kid has something a college ‘wants.’ Read who gets in and why and net price calculators are your friend.

Congrats on making Seniors. Yes this is the ‘tax’ for that success - ie not choosing private sector work.

Why do people insist on providing advice and opinions on questions that were not asked by the OP?

They have to show how smart they are and how they know EVERYTHING about college admissions despite not being an AO and absolutely zero people on the entire planet being willing to pay for their amateur counseling.

[Anonymous]

Anonymous wrote:

Anonymous wrote:A very few private schools give you merit aid to fill out the form- not sure why but they do. Otherwise total waste of time and invasive. You will get nothing.

What do people mean here when they say invasive? Why are they bothered by this?

They have a lot of very unusual income streams they don’t want anyone reporting to the IRS.

CSS schools can and will audit. Serious risk the FAFSA/CSS and the 1040 don’t match.

The President of the United States releases his tax returns publicly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would like to hear more from UMC people about how College is a special consumer good where family income shouldn’t matter and the net price should be essentially zero when literally everything else in the world is allocated by family wealth, including “free” public school (you have to be able to afford to live in the district).

You thought it was fair when you bought your way into everything else in your lifestyle, well now welcome to the big leagues.

I don't think UMC families are saying that they should be given aid. Just lamenting that they cannot afford it, even if some insist that they can. Many of us have 529 accounts, but those funds didn't grow that much, even putting in more than $2500 per year per account, and we have multiple kids. It's enough for in state, but not 80k per year. When we started saving college was a bit cheaper. Several years ago, when my DC was in MS, we looked at an expensive private. It was $60K/year. Now it's closer to $85k per year. Saving $240k is doable. Saving closer to $350K is much harder.

If you still have 20 working years, I could see how you think you can afford to pull back on funding retirement, and save later, but if you are 55+, you don't have that luxury.

Obviously, saving only $2500/year/kid is not going to produce enough for $80K/year schools in 18 years (which will cost way more than 80K then).

Majority of kids have to pick schools they can afford, most cannot afford 80K/year, or they could but smartly realize that saved money would be nice to have for grad school.

Read bolded.. we saved way more than $2500 per year per account. We have two accounts per child. Still not enough to cover $80K per year per child given that the 529 didn't grow that much.

So why write it that way? How much did you save per year? Why did the 529 not grow that much? If you dont have it all in the growth market, it may not. But that is on you, as there are 529s that allow you to do that. You can pick one (may not be your state's) that allows you to select the MF to invest in. American Funds in VA is an excellent example. My kid's funds earned 8-9% annual on average during the aggressive years. We didn't pull back until age 15/16 to less aggressive.

DP. Even with 8-9% growth, saving 20K year since 2007 only gets you to ~600K after you factor in expense ratios etc. Not enough to cover 2 kids at 80-90K schools (and that is not even Harvard but say Amherst/Colorado College.) And this simple calculation doesn't actually account for the real fluctuations (e.g. crash in 2008/2009 and again in 2020. Yes, there were rebounds, but plugging in actual numbers and accounting for management fees only gets you to the number I quoted above. Colllege costs are ridiculous right now. And before you jump in with state options, DC doesn't have a state university (obv) and DCTAG helps but not as much.

If you chose to live in DC and have kids, you know there is no state option. So you have 18 years to consider moving to MD/VA if you want that option. It's all about choices, but this wasn't a surprise to you.

Yes college costs have increased drastically. But there are still plenty of excellent options for attending with no or minimal debt. Search merit at "2nd tier" schools or lower. My own 1500/3.98UW/9 AP kid got $42K/year at a T50 so instead of 80k+/year it would only be $40K. Could have gotten even more if they'd searched schools in the 60-120 range (didn't Because we don't need the merit, but point is they could find plenty of good options if needed).
So if you take off the blinders of believing you need to attend a T25 school, you can find something affordable for you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Many likely were not taught to save.

That is not a character flaw, but it is an obstacle.

My DH and I were not taught this either, but being married and working together we have improved our financial literacy over decades and are lucky to have DCUM UMC salaries.

We are terrible savers, but if we can automate and never see the money that works for us.

I think the “pay yourself first”, meaning savings, mentality is great but hard for many people who don’t think long term to execute. This is not something taught in school or society. People do not talk about money and people don’t like feeling as if they do not make as much as their friends and neighbors. It is hard for many to say “I cannot afford that” because of shame.

It is easier to live on a salary of $150K than to have a salary of $300K and live on a salary of $150K.

Those that are better at savings appear to balance the pain of frugality with the joy of experiencing superiority.

People feel bad that private college is expensive and they cannot afford to give that to their children. College is crazy expensive. There are less expensive options.

Our children will be better off for not getting everything they want.

No, it’s easier to live off $300k and save a lot than 150k. Your poor choices are not colleges problem. It’s yours. We talk about money in our home all the time.

+1

Most seem to forget that life is all about choices. They could live off $150K easily. They just chose to spend more and save less. In fact, it would only take a few years living off $150K and they would have enough front loaded for college to increase their living up to $200K and still contribute to college and everything else.

[Anonymous]

Anonymous wrote:

Anonymous wrote:A very few private schools give you merit aid to fill out the form- not sure why but they do. Otherwise total waste of time and invasive. You will get nothing.

What do people mean here when they say invasive? Why are they bothered by this?

The IRS knows our finances. However, we will NEVER get any aid. So I Don't need another dept (FAFSA) and multiple universities knowing our financial situation. All the information they need to know is that we pay the tuition, R&B and expenses on time and in full.
They don't need to know how much our homes are worth or our Net worth.

However, it's up to you if you want to divulge that information to multiple sources. You are free to do so. But it is invasive

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A very few private schools give you merit aid to fill out the form- not sure why but they do. Otherwise total waste of time and invasive. You will get nothing.

What do people mean here when they say invasive? Why are they bothered by this?

They have a lot of very unusual income streams they don’t want anyone reporting to the IRS.

CSS schools can and will audit. Serious risk the FAFSA/CSS and the 1040 don’t match.

The President of the United States releases his tax returns publicly.

What the hell does "The President of the United States releases his tax returns publicly." mean?
Sure they do (well majority do). They are running for public office.

My kid isn't running for public office. I'm not running for public office. Outside of the IRS knowing my tax returns (which are legal---normal income streams, nothing to hide), I don't feel the need for multiple universities and FAFSA (whatever dept that is within the fed govt) to know my financials. It is not their business, it's not relevant. As long as I pay my kid's U bills that's all that matters.

You however are free to release your tax returns publicly to the NYTimes and all media outlets if you so desire (doubt they want to see them).

[Anonymous]

Anonymous wrote:

Anonymous wrote:When we applied (three kids, upper middle class), we were told our expected family contribution was $209K a year, if that tells you anything. Meaning they would give aid after we spent 209K a year on college. I will say, some colleges are attempting to get to that, but to date, I believe that still means no aid anywhere

I call BS. No one who's actually middle class would be expected to pay $209K because it would be impossible. If they said your EFC was $209K then you must have income and/or assets that put you well out of the middle class.

They probably make $600K+ a year and call themselves umc.

[Anonymous]

Anonymous wrote:FAFSA should be tiered based on geography. DMV people are getting nothing because we are all fabulously wealthy here despite living in small 2800 square foot houses with mortgages (that cost 1.3M)

I am the poster who said that 300k is not rich for this area (and i stand by that, given high cost of living here, mainly housing and child care). 300k is decent but not extravagant for this area.

That being said, hell no, someone making 300k should not be eligible for FAFSA. Those funds should go to people who truly actually need them, not a family that makes 300k and chooses to live in a 1.3m place (which frankly if at low interest rate of 2020/2021 is only like 5-6k a month anyway, which leaves like 10k for everything else).

Also lol 2800sq feet is small? Not sure if serious or not but if serious, you really need a reality check.

[Anonymous]

Anonymous wrote:

Anonymous wrote:FAFSA should be tiered based on geography. DMV people are getting nothing because we are all fabulously wealthy here despite living in small 2800 square foot houses with mortgages (that cost 1.3M)

I am the poster who said that 300k is not rich for this area (and i stand by that, given high cost of living here, mainly housing and child care). 300k is decent but not extravagant for this area.

That being said, hell no, someone making 300k should not be eligible for FAFSA. Those funds should go to people who truly actually need them, not a family that makes 300k and chooses to live in a 1.3m place (which frankly if at low interest rate of 2020/2021 is only like 5-6k a month anyway, which leaves like 10k for everything else).

Also lol 2800sq feet is small? Not sure if serious or not but if serious, you really need a reality check.

Yes, it is rich. Your complaints are lifestyle choices. Having a 5-6K mortgage is a lot of money. Our mortgage was $2K.

[Anonymous]

Anonymous wrote:

Anonymous wrote:FAFSA should be tiered based on geography. DMV people are getting nothing because we are all fabulously wealthy here despite living in small 2800 square foot houses with mortgages (that cost 1.3M)

I am the poster who said that 300k is not rich for this area (and i stand by that, given high cost of living here, mainly housing and child care). 300k is decent but not extravagant for this area.

That being said, hell no, someone making 300k should not be eligible for FAFSA. Those funds should go to people who truly actually need them, not a family that makes 300k and chooses to live in a 1.3m place (which frankly if at low interest rate of 2020/2021 is only like 5-6k a month anyway, which leaves like 10k for everything else).

Also lol 2800sq feet is small? Not sure if serious or not but if serious, you really need a reality check.

2800 is a good sized house. Ours is 1000. I'd be thrilled for 2800. Or, even a second bathroom.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Many likely were not taught to save.

That is not a character flaw, but it is an obstacle.

My DH and I were not taught this either, but being married and working together we have improved our financial literacy over decades and are lucky to have DCUM UMC salaries.

We are terrible savers, but if we can automate and never see the money that works for us.

I think the “pay yourself first”, meaning savings, mentality is great but hard for many people who don’t think long term to execute. This is not something taught in school or society. People do not talk about money and people don’t like feeling as if they do not make as much as their friends and neighbors. It is hard for many to say “I cannot afford that” because of shame.

It is easier to live on a salary of $150K than to have a salary of $300K and live on a salary of $150K.

Those that are better at savings appear to balance the pain of frugality with the joy of experiencing superiority.

People feel bad that private college is expensive and they cannot afford to give that to their children. College is crazy expensive. There are less expensive options.

Our children will be better off for not getting everything they want.

No, it’s easier to live off $300k and save a lot than 150k. Your poor choices are not colleges problem. It’s yours. We talk about money in our home all the time.

+1

Most seem to forget that life is all about choices. They could live off $150K easily. They just chose to spend more and save less. In fact, it would only take a few years living off $150K and they would have enough front loaded for college to increase their living up to $200K and still contribute to college and everything else.

There is so much holier than thou on this forum.

It takes resolve that many people do not have to earn $300K and live like year earn $150K.

Why don’t the people that make $150K live like they make $75K and save the difference? You could say this at any income level.

Look, I am not saying that people that make $300K should qualify for financial aid. They should not.

And there is a range of circumstances of families that have saved various amounts and will choose a variety of schools.

But all this condescension implying it is so easy ignores many of the realities of life. What is easy for one person is hard for another.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:FAFSA should be tiered based on geography. DMV people are getting nothing because we are all fabulously wealthy here despite living in small 2800 square foot houses with mortgages (that cost 1.3M)

I am the poster who said that 300k is not rich for this area (and i stand by that, given high cost of living here, mainly housing and child care). 300k is decent but not extravagant for this area.

That being said, hell no, someone making 300k should not be eligible for FAFSA. Those funds should go to people who truly actually need them, not a family that makes 300k and chooses to live in a 1.3m place (which frankly if at low interest rate of 2020/2021 is only like 5-6k a month anyway, which leaves like 10k for everything else).

Also lol 2800sq feet is small? Not sure if serious or not but if serious, you really need a reality check.

Yes, it is rich. Your complaints are lifestyle choices. Having a 5-6K mortgage is a lot of money. Our mortgage was $2K.

I was not the one that said I have a 1.3m place, nor complaining about not being eligible for fafsa (frankly if you make 300k you should not be eligible for it). I was simply stating that, assuming they bought that place (or refinanced) when rates were low, they should still have money leftover to put away towards their kids college. Ie the poster should not be complaining.

That being said, in today's environment (house price and mortgage rates) 5k does not go as far as it used to. If you are not lucky enough to have been in a position to buy when rates were low (like we were, were not married yet so were not thinking about buying) then it's impossible to get a place with a 2k mortgage now. Anything decent is 800k plus (I defined decent as 1600-200sq ft in a neighborhood with decent-good schools). On an 800k place with 20% down, and 6.5 rate, you are looking at paying 5k per month.

And that is one other crux of the matter, if you make 300k and have a house with a sub 3% rate, then yeah you are fine. But say you are a "young" couple (30-32) looking to buy or bought when rates were high, and are planning on having kids or just had your first one. 300k won't take you far once you take into account mortgage and the cost of daycare/nanny (unless you are single income household making 300k).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Many likely were not taught to save.

That is not a character flaw, but it is an obstacle.

My DH and I were not taught this either, but being married and working together we have improved our financial literacy over decades and are lucky to have DCUM UMC salaries.

We are terrible savers, but if we can automate and never see the money that works for us.

I think the “pay yourself first”, meaning savings, mentality is great but hard for many people who don’t think long term to execute. This is not something taught in school or society. People do not talk about money and people don’t like feeling as if they do not make as much as their friends and neighbors. It is hard for many to say “I cannot afford that” because of shame.

It is easier to live on a salary of $150K than to have a salary of $300K and live on a salary of $150K.

Those that are better at savings appear to balance the pain of frugality with the joy of experiencing superiority.

People feel bad that private college is expensive and they cannot afford to give that to their children. College is crazy expensive. There are less expensive options.

Our children will be better off for not getting everything they want.

No, it’s easier to live off $300k and save a lot than 150k. Your poor choices are not colleges problem. It’s yours. We talk about money in our home all the time.

+1

Most seem to forget that life is all about choices. They could live off $150K easily. They just chose to spend more and save less. In fact, it would only take a few years living off $150K and they would have enough front loaded for college to increase their living up to $200K and still contribute to college and everything else.

There is so much holier than thou on this forum.

It takes resolve that many people do not have to earn $300K and live like year earn $150K.

Why don’t the people that make $150K live like they make $75K and save the difference? You could say this at any income level.

Look, I am not saying that people that make $300K should qualify for financial aid. They should not.

And there is a range of circumstances of families that have saved various amounts and will choose a variety of schools.

But all this condescension implying it is so easy ignores many of the realities of life. What is easy for one person is hard for another.

What an idiotic post. Sure, and the people making 70k could just live like they make 35k -- your relativism may suit your justification of your wealth, but it makes no sense.

Poor poor people making 300k. Their lives are so hard. Those of us at 150k have it so easy. Good grief.