If you consider yourself a “donut hole” family

[Anonymous]

Anonymous wrote:I keep wondering whether we will qualify for any aid. Our HHI is 340K, in a high income area. We rent, don't own our home, but we do own small vacation property worth about 100K. No other assets other than modest retirement accounts and about 150K in a 529 that needs to cover 2 kids. Also no family money--we don't stand to inherit much. So obviously we can't afford full costs at any private or out-of-state college. But will they see it that way?

You have a huge income. Why aren’t you saving more? You can afford private or out of state no issue.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Donut hole family is cope from people who didn’t save and also just don’t like the price tag. It’s not a real thing.

Or a family who spent their kids' college savings taking care of their parents or in-laws, which is what would have happened in our family had I not set up automatic 529 paycheck contributions from my paycheck.

You can prove this but there are supports for nursing homes and other things depending on their income. We did it on a very low income and still managed to save on one income. Priorities.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I keep wondering whether we will qualify for any aid. Our HHI is 340K, in a high income area. We rent, don't own our home, but we do own small vacation property worth about 100K. No other assets other than modest retirement accounts and about 150K in a 529 that needs to cover 2 kids. Also no family money--we don't stand to inherit much. So obviously we can't afford full costs at any private or out-of-state college. But will they see it that way?

You have a huge income. Why aren’t you saving more? You can afford private or out of state no issue.

They can't cash flow two kids and if their incomes just got to this point they couldn't save too much - $150k is a great start but doesn't go a long way towards tuitions. Though everyone has different definitions of "modest retirement accounts" - these vague posts are not helpful.

[Anonymous]

Anonymous wrote:What do you consider donut hole? It’s something of a subjective term, even if it’s not meant to be. Our HHI is currently $375k, we have about $380k in 529s, and another $600k in regular brokerage. We have $3M saved for retirement. We live below our means, so that $375k leaves plenty for savings. We can clearly afford to pay for our 2 kids to attend college without any aid. By that definition, we are not a donut hole family.

For the record, I agree we are not a donut hole family. But when you look at the situation subjectively, you would consider where our kids end up - in state or at a private paying full freight? And I know that it’s likely our income will drop significantly before the kids finish college. We’d also like to retire early, be able to help the kids get started professionally, and continue to take care of an aging parent. I think a lot of families in a similar situation may *feel* like a donut hole family, even though objectively they are not.

I'm the OP and I don't really believe in the concept of donut hole. I mean, I absolutely believe that there are families who decide that some schools are out of reach, and factor costs heavily into their decision making. But the term donut hole seems to imply that people with less means who get financial aid, are not also finding some schools out of reach, and factoring costs heavily into their decision making. The difference is that lower income families may find that different options are affordable than higher income families, and that lower income families aren't choosing between college and retiring early, or college or helping their kid get started professionally. Those things aren't accessible to them regardless of whether their kid goes to college at all.

I am running NPC's with all kinds of numbers, because of my complicated situation, and I am surprised that I can put in numbers that feel really rich to me. I put in all my stats and added $1 Million dollars in assets (so exactly what you have, except I don't have equity in a home, or retirement, and my income is about half of yours) and was shocked when NPC's came back with large amounts of aid at some schools. I had heard so many people saying that regular middle class families can't get aid, so those results surprised me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I keep wondering whether we will qualify for any aid. Our HHI is 340K, in a high income area. We rent, don't own our home, but we do own small vacation property worth about 100K. No other assets other than modest retirement accounts and about 150K in a 529 that needs to cover 2 kids. Also no family money--we don't stand to inherit much. So obviously we can't afford full costs at any private or out-of-state college. But will they see it that way?

You have a huge income. Why aren’t you saving more? You can afford private or out of state no issue.

They can't cash flow two kids and if their incomes just got to this point they couldn't save too much - $150k is a great start but doesn't go a long way towards tuitions. Though everyone has different definitions of "modest retirement accounts" - these vague posts are not helpful.

We saved enough for college on less than that, one income and other oarebtbdealing with a sn child in daily therapies and a parent with dementia.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What do you consider donut hole? It’s something of a subjective term, even if it’s not meant to be. Our HHI is currently $375k, we have about $380k in 529s, and another $600k in regular brokerage. We have $3M saved for retirement. We live below our means, so that $375k leaves plenty for savings. We can clearly afford to pay for our 2 kids to attend college without any aid. By that definition, we are not a donut hole family.

For the record, I agree we are not a donut hole family. But when you look at the situation subjectively, you would consider where our kids end up - in state or at a private paying full freight? And I know that it’s likely our income will drop significantly before the kids finish college. We’d also like to retire early, be able to help the kids get started professionally, and continue to take care of an aging parent. I think a lot of families in a similar situation may *feel* like a donut hole family, even though objectively they are not.

I'm the OP and I don't really believe in the concept of donut hole. I mean, I absolutely believe that there are families who decide that some schools are out of reach, and factor costs heavily into their decision making. But the term donut hole seems to imply that people with less means who get financial aid, are not also finding some schools out of reach, and factoring costs heavily into their decision making. The difference is that lower income families may find that different options are affordable than higher income families, and that lower income families aren't choosing between college and retiring early, or college or helping their kid get started professionally. Those things aren't accessible to them regardless of whether their kid goes to college at all.

I am running NPC's with all kinds of numbers, because of my complicated situation, and I am surprised that I can put in numbers that feel really rich to me. I put in all my stats and added $1 Million dollars in assets (so exactly what you have, except I don't have equity in a home, or retirement, and my income is about half of yours) and was shocked when NPC's came back with large amounts of aid at some schools. I had heard so many people saying that regular middle class families can't get aid, so those results surprised me.

My spouse will work probably till 70 and our kids are fine with state colleges and grad school. It’s all about lifestyle choices.

[Anonymous]

Are those NPCs accurate??

[Anonymous]

These condition must be satisfied if full pay.
Total NW worth > 4 x Total cost of undergraduate study

Yearly income > 2 x median income of the area you inhabit.

[Anonymous]

PP. total NW excluding at least 75% of primary home equity

[Anonymous]

Anonymous wrote:Not donut hole; but $475k HHIwith both our incomes—but with more than one kid in college and another as a private HS it feels like it. Not in-state 2 kids at same time in college is $185-195k/year tuition (same college; no aid). 3rd kid $35k HS (last year). It’s more than 1/2 our salaries

Zero sympathy for you. What a waste of money.

[Anonymous]

HHI 180K. I quit my low paying teaching job to take care of elderly parent while our first kid was in HS. She had stats to possibly get into Georgetown, Notre Dame or Vanderbilt, but knew we wouldn’t be able to afford them. She applied ED to to UVA and was accepted. The tuition is still steep for us, but we have been saving for years. FAFSA said we were full pay. Also, no fancy vacations, 2007 and 2004 cars, and kids went to, what many here call, a terrible high school, in a lower cost of living area. We prioritized saving what we could for college. Our second kid has been accepted to an SEC school, that has a great program for her major, and they matched in-state tuition.

It can be done, you just have to stop keeping up with the Joneses.

[Anonymous]

Anonymous wrote:Not donut hole; but $475k HHIwith both our incomes—but with more than one kid in college and another as a private HS it feels like it. Not in-state 2 kids at same time in college is $185-195k/year tuition (same college; no aid). 3rd kid $35k HS (last year). It’s more than 1/2 our salaries

You should have been saving. You can afford it.

[Anonymous]

Anonymous wrote:HHI 180K. I quit my low paying teaching job to take care of elderly parent while our first kid was in HS. She had stats to possibly get into Georgetown, Notre Dame or Vanderbilt, but knew we wouldn’t be able to afford them. She applied ED to to UVA and was accepted. The tuition is still steep for us, but we have been saving for years. FAFSA said we were full pay. Also, no fancy vacations, 2007 and 2004 cars, and kids went to, what many here call, a terrible high school, in a lower cost of living area. We prioritized saving what we could for college. Our second kid has been accepted to an SEC school, that has a great program for her major, and they matched in-state tuition.

It can be done, you just have to stop keeping up with the Joneses.

Parents sacrificing for next generation..

[Anonymous]

Anonymous wrote:HHI 180K. I quit my low paying teaching job to take care of elderly parent while our first kid was in HS. She had stats to possibly get into Georgetown, Notre Dame or Vanderbilt, but knew we wouldn’t be able to afford them. She applied ED to to UVA and was accepted. The tuition is still steep for us, but we have been saving for years. FAFSA said we were full pay. Also, no fancy vacations, 2007 and 2004 cars, and kids went to, what many here call, a terrible high school, in a lower cost of living area. We prioritized saving what we could for college. Our second kid has been accepted to an SEC school, that has a great program for her major, and they matched in-state tuition.

It can be done, you just have to stop keeping up with the Joneses.

We're in state for UVA, and when our kids were applying to college we easily could have afforded Georgetown, Notre Dame or Vanderbilt and out kids actually got into one of these schools. But we never seriously considered any of them over UVA because it makes no financial sense. You're not sacrificing anything or denying your kid anything of real value by choosing UVA over any of those schools. You're just being smart.

[Anonymous]

I don’t know if we’re “donut hole.” We can technically afford full pay, and if we might get a little help at the richest schools, it wouldn’t be enough to match a typical OOS flagship. So when our high-stats DD started saying she wanted a big state school, we let her roll with it. I mean we did take her to tour a SLAC and one of HYPSM, but she hated both of them. And we had less than no incentive to talk her out of it. To the contrary, we had a very substantial incentive to give in to her preference.

Was this a financial decision? I honestly don’t know.