Why do donut hole families

[Anonymous]

Anonymous wrote:

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

I actually agree with you. So background, we have $250k HHI, $3M investment portfolio, house paid off.

Yeah, we can afford any college. Probably. For three kids though??

And is private or out of state worth it? No, I don't think so.

If we made $600k, that would be a different story. If we had $6M in stocks instead of $3M, that would also be different.

So I think we've made decent choices along the way about cars and houses and whatnot. But I consider us donut hole because we're too wealthy for financial aid, but not wealthy enough for a $350k undergraduate degree to be a drop in the bucket.

Bad example. $3m will turn to $2M after you pay for 3 tuitions. That’s hardly a hardship.

For your income to drop so low, one of you is SAHM or has a passion job, right?

[Anonymous]

I think it’s insane that our $250K family did not get 1 penny FA for a $60K/year school.

We were also not always $250K family, we were closer to $160/year, then $180K for a few years. Plus the $250 includes one of us having 2 jobs.

My H is a cop and I was a GS-13 most our lives so we could not really save that much.

[Anonymous]

Anonymous wrote:

Anonymous wrote:People see some kid getting full FA an Ivy and think, “Wow, poor people are so lucky.” What they don’t see is that A) that kid would be taking out loans to go to a state school if they hadn’t gotten into that Ivy and B) Most poor kids are in community college.

Yes but 1) Ivy don’t give loans any more, so FA is all grants and 2) oftennthose donut hole families have a SAHM or mom doing a creative field like interior design or something, which is way more fun and flexible than the dual GS14 family who won’t get any aid.

In both cases we are talking about kids who were accepted to Ivy, who worked hard, so no idea why you talk about state schools.

Why do you assume that these families have a SAHM? We are donut hole and both work full time. We just don't earn gobs of money. We are comfortable, but can't afford private college. We are not complaining but your logic is poor.

[Anonymous]

Anonymous wrote:I think it’s insane that our $250K family did not get 1 penny FA for a $60K/year school.

We were also not always $250K family, we were closer to $160/year, then $180K for a few years. Plus the $250 includes one of us having 2 jobs.

My H is a cop and I was a GS-13 most our lives so we could not really save that much.

Also, yes my son could have gone to Salisbury or Towson, but he didn’t get into College Park

[Anonymous]

Anonymous wrote:

Anonymous wrote:People see some kid getting full FA an Ivy and think, “Wow, poor people are so lucky.” What they don’t see is that A) that kid would be taking out loans to go to a state school if they hadn’t gotten into that Ivy and B) Most poor kids are in community college.

Yes but 1) Ivy don’t give loans any more, so FA is all grants and 2) oftennthose donut hole families have a SAHM or mom doing a creative field like interior design or something, which is way more fun and flexible than the dual GS14 family who won’t get any aid.

In both cases we are talking about kids who were accepted to Ivy, who worked hard, so no idea why you talk about state schools.

Because the lucky few poorer kids who get into Ivies get significant financial aid. The ones who don’t or just miss the cut can barely afford state schools.

[Anonymous]

Anonymous wrote:

Anonymous wrote:There is a big difference between a donut hole family that is right above the cusp of qualifying for financial aid and a donut hole family that is swimming in millions. A big difference. The ones just above the cusp, who perhaps sacrificed and saved for college, could perhaps be justifiably a little resentful of the ones just below the cusp... The ones swimming in millions don't really care about 25k a year here or there.

We qualify for some aid, but have an efc of around 40k a year. Now that fafsa ignores siblings, that turns into 90k for the two years they’ll overlap. I consider us to be donut hole even though we’ll get some financial aid

Something is missing here.

FAFSA really governs the public colleges and the less competitive private schools. If you aim at those, you can certainly find ways to attend a school for less than $40K/year per student.

If your goal is the top private schools, FAFSA doesn't mean much there (unless you are very poor and receiving Pell grants). They have their own ways of determining need and do take into account siblings attending at the same time.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think it's because it just feels unfair to people that if they were richer or poorer, their kids might have more options. It isn't necessarily unfair, or maybe it is, but this is how people feel. I also think that many donut hole families have parents who attended top private universities at a time when they were more affordable and it is a shock that their kids can't do the same, even though they have been saving for years. We are not a donut hole family, so this is just my guess as to how people feel.

But the "poor people have more options" thing is a myth.

I think that people who complain about being a "donut hole" family are implying that things are better on the other side of the hole. But in reality, it isn't. And continuing to use the term when that's been pointed out, is basically a dog whistle, because once you know how college financial aid works, complaining about being a donut hole family means that you think that actual middle class (not DCUM middle class) and low income families don't deserve what you deserve, which is affordable college choices for their kids.

Now, if you want to complaining that EFC's are unrealistic for many families. Or that college costs too much. Yes! Those are very valid complaints, and things worth advocating around. But the idea that college is only a financial burden for some subset of kinda rich but not very rich people is simply untrue.

No one is saying that or indicating that they are thinking that.

[Anonymous]

Anonymous wrote:I never complain about it. But if I ever mention that we're not willing to pay higher than in-state prices, I get attacked for that position.

This is a lightning rod sort of statement. You can avoid attacks by filtering what you say. Why not just stick to a simpler narrative - my kid goes to X school. It's nobody's business why.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There is a big difference between a donut hole family that is right above the cusp of qualifying for financial aid and a donut hole family that is swimming in millions. A big difference. The ones just above the cusp, who perhaps sacrificed and saved for college, could perhaps be justifiably a little resentful of the ones just below the cusp... The ones swimming in millions don't really care about 25k a year here or there.

We qualify for some aid, but have an efc of around 40k a year. Now that fafsa ignores siblings, that turns into 90k for the two years they’ll overlap. I consider us to be donut hole even though we’ll get some financial aid

Something is missing here.

FAFSA really governs the public colleges and the less competitive private schools. If you aim at those, you can certainly find ways to attend a school for less than $40K/year per student.

If your goal is the top private schools, FAFSA doesn't mean much there (unless you are very poor and receiving Pell grants). They have their own ways of determining need and do take into account siblings attending at the same time.

Discounting siblings means that we pay full freight for overlap years at twice the efc that Fafsa says we can afford. That means elite privates using css and meeting full need or bust which is a massive amount of pressure

[Anonymous]

Anonymous wrote:I think it’s insane that our $250K family did not get 1 penny FA for a $60K/year school.

We were also not always $250K family, we were closer to $160/year, then $180K for a few years. Plus the $250 includes one of us having 2 jobs.

My H is a cop and I was a GS-13 most our lives so we could not really save that much.

It's absurd to characterize 250k families as privileged in 2023. After taxes, there is not much left.

[Anonymous]

Anonymous wrote:I think it’s insane that our $250K family did not get 1 penny FA for a $60K/year school.

We were also not always $250K family, we were closer to $160/year, then $180K for a few years. Plus the $250 includes one of us having 2 jobs.

My H is a cop and I was a GS-13 most our lives so we could not really save that much.

The family that got FA has an income <150K.

So, you could also live on 150K and use the other $100K to pay your $60K tuition, and even have some left over after taxes and all.

See, very easy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There is a big difference between a donut hole family that is right above the cusp of qualifying for financial aid and a donut hole family that is swimming in millions. A big difference. The ones just above the cusp, who perhaps sacrificed and saved for college, could perhaps be justifiably a little resentful of the ones just below the cusp... The ones swimming in millions don't really care about 25k a year here or there.

We qualify for some aid, but have an efc of around 40k a year. Now that fafsa ignores siblings, that turns into 90k for the two years they’ll overlap. I consider us to be donut hole even though we’ll get some financial aid

Something is missing here.

FAFSA really governs the public colleges and the less competitive private schools. If you aim at those, you can certainly find ways to attend a school for less than $40K/year per student.

If your goal is the top private schools, FAFSA doesn't mean much there (unless you are very poor and receiving Pell grants). They have their own ways of determining need and do take into account siblings attending at the same time.

Discounting siblings means that we pay full freight for overlap years at twice the efc that Fafsa says we can afford. That means elite privates using css and meeting full need or bust which is a massive amount of pressure

No, that also means actively searching for merit aid and/or considering schools within a commuting distance.

[Anonymous]

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

I'm sorry but this statement is out of touch (and I'm not donut hole). How can you lump everyone (people you do not know) into a category that assumes they recklessly indulged. Sure, there are people like this - but to assume anyone without resources to pay for college is in this category is ludicrous. Most of this country cannot afford to pay for private universities without taking out loans.

[Anonymous]

Anonymous wrote:One reason we complain is that we are also sandwich generation families, not just donut holes. Our families made less money when we were kids, so we received financial aid in college, took out student loans, then excelled in life, got good jobs, but spent so much $$$ paying off student loans that we didn't have enough cash to save for our own kids' colleges. However, we earn enough now to receive no financial aid, and can probably only afford in-state tuition and not full-pay private tuition, so that's why we're upset. And now some of us sandwich generation have to give money to provide for our aging parents (who were not earning much $$ to begin with) all while figuring out how to pay for our kids' educations. When I went to undergrad, tuition was $17k at a top 10/15 private university. Now that tuition is $60k. It's just sad.

This is my personal story, so not everyone is in the same boat. We have saved enough in 529s for all 3 kids to go to in-state schools. We could use cash flow + 529 for one child if they get into a private worth paying full price for. This is where it's sad because we can't afford to do that for all 3, but oh well, what are the odds they'll all 3 be smart enough to get into a top 10/15 school anyway? There is no guarantee that they will have the same experiences that I had and I accept that.

Many many people cannot afford to send their kids to a T20 school, if their kid could even get in. Majority of kids with "qualified for a T20 school" will not get a spot.

You should be happy (and so should your kids) that they can attend/graduate college without debt---that's not something very many kids get.

We let our kids know by 9th/10th grade what we can afford for college. Then they can search merit if they want to attend somewhere that costs more

[Anonymous]

Anonymous wrote:There is a big difference between a donut hole family that is right above the cusp of qualifying for financial aid and a donut hole family that is swimming in millions. A big difference. The ones just above the cusp, who perhaps sacrificed and saved for college, could perhaps be justifiably a little resentful of the ones just below the cusp... The ones swimming in millions don't really care about 25k a year here or there.

There is no such thing as a "donut hole family that is swimming in millions." The point of the terminology is to convey that the family neither qualifies for need-based aid nor can pay $320,000+ for their kid's undergraduate education.