Top Colleges Are Cheaper Than You Think (Unless You’re Rich)

[Anonymous]

Any college spending more than 10% of its income (tuition, endowment) on anything other than instructional salaries, building costs and scholarships should be disqualified from federal financial aid consideration.

[Anonymous]

Anonymous wrote:The sliding scale is terrible. Tons of money given to the extremely poor, which I get completely. But middle and upper middle class expected to get loans. It is total BS

+1

Not to mention, those who cry "poor mouth."

[Anonymous]

Anonymous wrote:Sorry. Forgot to add their basic premise:

Middle-class families pay a higher price, but nothing like the list price. Only affluent families pay something close to the list price. It’s true that many of these families don’t think of themselves as affluent. But they are – part of roughly the country’s richest 10 percent, with an annual income of at least $175,000 and a net worth of a half-million dollars or more. For them, a college bill approaching $70,000 can be decidedly unpleasant, yet it doesn’t reorder their lives.

I am not following your logic. If we earn 175K per year, after around 45K in taxes( not including health insurance, etc...) we end up with 10, 11K per month. If for 10 months we are paying 7K in college tuition and costs, how does that not completely reorder our lives?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sorry. Forgot to add their basic premise:

Middle-class families pay a higher price, but nothing like the list price. Only affluent families pay something close to the list price. It’s true that many of these families don’t think of themselves as affluent. But they are – part of roughly the country’s richest 10 percent, with an annual income of at least $175,000 and a net worth of a half-million dollars or more. For them, a college bill approaching $70,000 can be decidedly unpleasant, yet it doesn’t reorder their lives.

I have zero complaints about our $200K HHI (although will note that it doesn't buy what it would e.g. in Omaha, notwithstanding FAFSA's indifference to such distinction), but it is not sufficient to pay full price at a school that costs $70K or more per year.

It is not a matter of "decidedly unpleasant"; it is a matter of "inaccessible."

To attend such a school, one needs to be low-income, middle-income, or in the top 1-2%.

We are in the same boat. HHI is high now, but now one kid is already in college and the other going soon. We weren't able to save much at all, and what we did we put in out house. One kid went to privates as it was the only doable option due to his SN, and we tried public, we really tried.
Out of current year's income, yes, probably... but saving for 15 years from similar income? Should not be.

But it is. Generally a family with teens and a HHI of say $200K has not had that HHI since the kids were babies - it has risen over time. And for the first ~7-8 years, that family had enormous childcare expenses.

If the parents in question are older and approaching retirement, all the harder.

We have saved very aggressively in this exact scenario and can pay up to, and no more than about $50K/year. We will not jeopardize our retirement to send our kids to elite schools, and do not qualify for need-based FA.

"Decidedly unpleasant" my ass.

[Anonymous]

^^ sorry, my reply ended up in the middle!

[Anonymous]

Anonymous wrote:

Anonymous wrote:Sorry. Forgot to add their basic premise:

Middle-class families pay a higher price, but nothing like the list price. Only affluent families pay something close to the list price. It’s true that many of these families don’t think of themselves as affluent. But they are – part of roughly the country’s richest 10 percent, with an annual income of at least $175,000 and a net worth of a half-million dollars or more. For them, a college bill approaching $70,000 can be decidedly unpleasant, yet it doesn’t reorder their lives.

I am not following your logic. If we earn 175K per year, after around 45K in taxes( not including health insurance, etc...) we end up with 10, 11K per month. If for 10 months we are paying 7K in college tuition and costs, how does that not completely reorder our lives?

It does. But DC;s school thinks we're rich because of our 401K and home equity, neither of which you can actually spend on tuition.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The sliding scale is terrible. Tons of money given to the extremely poor, which I get completely. But middle and upper middle class expected to get loans. It is total BS

So what should happen? Colleges give you all the money, too? Wouldn't that mean raising tuition even more so the top 10% of whatever that can pay full freight are covering everyone's expenses?

How about not raising tuition at a rate that far exceeds the rate of inflation?

How about cost of living increases, and no more?

https://college-education.procon.org/view.resource.php?resourceID=005532

Agree. How about less administrators earning $$$ or support staff and less buildings and less all the fancy stuff like rock climbing, etc to keep the costs down?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sorry. Forgot to add their basic premise:

Middle-class families pay a higher price, but nothing like the list price. Only affluent families pay something close to the list price. It’s true that many of these families don’t think of themselves as affluent. But they are – part of roughly the country’s richest 10 percent, with an annual income of at least $175,000 and a net worth of a half-million dollars or more. For them, a college bill approaching $70,000 can be decidedly unpleasant, yet it doesn’t reorder their lives.

I have zero complaints about our $200K HHI (although will note that it doesn't buy what it would e.g. in Omaha, notwithstanding FAFSA's indifference to such distinction), but it is not sufficient to pay full price at a school that costs $70K or more per year.

It is not a matter of "decidedly unpleasant"; it is a matter of "inaccessible."

To attend such a school, one needs to be low-income, middle-income, or in the top 1-2%.

Out of current year's income, yes, probably... but saving for 15 years from similar income? Should not be.

That supposes that you are making that same income for all those 15+ years. We make that now, with two in HS and are shoveling as much as we can into college savings, but it's a very recent development.

And, many families who are making that income via two salaries by the time their kids are approaching college would have been spending what they might otherwise save for college to pay for childcare.

I suppose it is possible for income to suddenly jump dramatically, but it seems unlikely in most cases.

I do agree $200K in San Francisco is different from $200K in Omaha, and that can seem unfair WRT housing costs.

Actually, it is common. Our HHI is a little more than double what it was when DC, now 20yo, was born. It has increased over the years.

In the early years, when it was half or a bit more than half of what it is now, a big chunk of it was consumed by daycare, and housing.

This is the most common (not unlikely at all) scenario for donut hole families.

This is particularly true if Mom stayed home when the kids were little but then went back to work as i did. I couldn't have saved $70,000 a year when I was making zero Thousand dollars a year

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sorry. Forgot to add their basic premise:

Middle-class families pay a higher price, but nothing like the list price. Only affluent families pay something close to the list price. It’s true that many of these families don’t think of themselves as affluent. But they are – part of roughly the country’s richest 10 percent, with an annual income of at least $175,000 and a net worth of a half-million dollars or more. For them, a college bill approaching $70,000 can be decidedly unpleasant, yet it doesn’t reorder their lives.

I am not following your logic. If we earn 175K per year, after around 45K in taxes( not including health insurance, etc...) we end up with 10, 11K per month. If for 10 months we are paying 7K in college tuition and costs, how does that not completely reorder our lives?

It does. But DC;s school thinks we're rich because of our 401K and home equity, neither of which you can actually spend on tuition.

There are so many schools in the US. You have to decide if you want to buy something on credit and if it is worth it. You can pick a school that costs less. It may have less “prestige” but that is the choice. Like choosing to buy a Honda vs a Mercedes. Buy what you can afford.

What needs to happen is for the loans to come from the universities with the graduates paying back from their future salaries - this will keep the costs down, the colleges will ensure the kids graduate w a job, etc

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sorry. Forgot to add their basic premise:

Middle-class families pay a higher price, but nothing like the list price. Only affluent families pay something close to the list price. It’s true that many of these families don’t think of themselves as affluent. But they are – part of roughly the country’s richest 10 percent, with an annual income of at least $175,000 and a net worth of a half-million dollars or more. For them, a college bill approaching $70,000 can be decidedly unpleasant, yet it doesn’t reorder their lives.

I am not following your logic. If we earn 175K per year, after around 45K in taxes( not including health insurance, etc...) we end up with 10, 11K per month. If for 10 months we are paying 7K in college tuition and costs, how does that not completely reorder our lives?

It does. But DC;s school thinks we're rich because of our 401K and home equity, neither of which you can actually spend on tuition.

There are so many schools in the US. You have to decide if you want to buy something on credit and if it is worth it. You can pick a school that costs less. It may have less “prestige” but that is the choice. Like choosing to buy a Honda vs a Mercedes. Buy what you can afford.

What needs to happen is for the loans to come from the universities with the graduates paying back from their future salaries - this will keep the costs down, the colleges will ensure the kids graduate w a job, etc

And that is exactly what we did. Which makes this whole thread and article/premise completely invalid. Yes, it goes with me telling my DD that she can't go to Pomona or Johns Hopkins. With me calculating how much Hopkins would be if she lived at home and commuted an hour there and back and still being a no. The only way she could go is if we sell everything, we do not have 1M house at all, not even close, end up in debt that we can't pay off till death and live with barely meeting our needs exactly at the time in our lives when we won't be able to keep making that much money and will have more health expenses than before. Because like so many we didn't earn that much even 5 years ago. So yes, we cope the best we can, just like anyone does, just like you better believe it that single parent with minimum income with full college tuition paid in aid or scholarships, is still struggling to give his kid some money so he/she can eat and have some money to go to movies and Chipotle with friends. That is why we don't need anyone telling us what we can and can't afford.

[Anonymous]

Anonymous wrote:Any college spending more than 10% of its income (tuition, endowment) on anything other than instructional salaries, building costs and scholarships should be disqualified from federal financial aid consideration.

+1
knowledge has basically become free at the very moment certificates are becoming prohibitively expensive

[Anonymous]

Our kids went to public high schools and UVA as in state students. Whenever I see the NYT and other esteemed publications group UVA among the elites, which is very often -- and usually as the only state school -- I smile over how smart of a decision we made to go the public school/UVA route . . .

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sorry. Forgot to add their basic premise:

Middle-class families pay a higher price, but nothing like the list price. Only affluent families pay something close to the list price. It’s true that many of these families don’t think of themselves as affluent. But they are – part of roughly the country’s richest 10 percent, with an annual income of at least $175,000 and a net worth of a half-million dollars or more. For them, a college bill approaching $70,000 can be decidedly unpleasant, yet it doesn’t reorder their lives.

I have zero complaints about our $200K HHI (although will note that it doesn't buy what it would e.g. in Omaha, notwithstanding FAFSA's indifference to such distinction), but it is not sufficient to pay full price at a school that costs $70K or more per year.

It is not a matter of "decidedly unpleasant"; it is a matter of "inaccessible."

To attend such a school, one needs to be low-income, middle-income, or in the top 1-2%.

Out of current year's income, yes, probably... but saving for 15 years from similar income? Should not be.

+1. If you save even half the cost of a private college you may be able to afford it paying the remainder out of pocket. Our experience was that the top schools are pretty generous with financial aid even for folks with 200k HHI. This was our experience anyway.

That is the opposite of our experience.

+ 1. Two times through the mill. Not a penny from top-flight schools. FAFSA gave us only the minimum $5K loan. The only merit aid offers DCs received were from colleges they had not applied to who wanted their ACT scores and were willing to pay $26K for them. Still, it was cheaper to go with UVA than the LACs offering merit.

[Anonymous]

If you look at the numbers in the article, you will see that somebody with a HHI of $50k typically gets charged 12% of their income, while a HHI of $175k gets charged 40%.

40% is drastic. It means that the upper middle class needs to start saving once the kid is born, to be able to handle this. Now, if we were all sentient robots, and always did the right thing, thinking decades in advance, this might work. But few people have that kind of self control, even people who are in that income bracket. In practice, it means that HHI around $200k go to state schools, as they can maybe shell out 20% of their income, with some savings. (and that is if they have 1 kid. if they have more, then loans are necessary).

I wish the schools would try harder to control costs. And when you need this kind of self control, it is better to have the government involved (state schools). We see the state schools rising and the elite private schools falling in the ranking. This may in part be because they have some price control, opening access to more people.

We have mandatory health insurance. Maybe we need mandatory child-future savings (which could go towards college, trade school, a house, etc). This seems necessary to help people have the self control they need. Of course, as with health care, it will cause the price to sky rocket even more. Right now, at least the people in the $200k bracket will be strong supporters of strong, less expensive (state) schools, as they have no choice unless they have herculean self control.

It seems sad that launching a kid has become this expensive. But with such a huge gap between the top and the rest, it is.

[Anonymous]

Anonymous wrote:If you look at the numbers in the article, you will see that somebody with a HHI of $50k typically gets charged 12% of their income, while a HHI of $175k gets charged 40%.

40% is drastic. It means that the upper middle class needs to start saving once the kid is born, to be able to handle this. Now, if we were all sentient robots, and always did the right thing, thinking decades in advance, this might work. But few people have that kind of self control, even people who are in that income bracket. In practice, it means that HHI around $200k go to state schools, as they can maybe shell out 20% of their income, with some savings. (and that is if they have 1 kid. if they have more, then loans are necessary).

I wish the schools would try harder to control costs. And when you need this kind of self control, it is better to have the government involved (state schools). We see the state schools rising and the elite private schools falling in the ranking. This may in part be because they have some price control, opening access to more people.

We have mandatory health insurance. Maybe we need mandatory child-future savings (which could go towards college, trade school, a house, etc). This seems necessary to help people have the self control they need. Of course, as with health care, it will cause the price to sky rocket even more. Right now, at least the people in the $200k bracket will be strong supporters of strong, less expensive (state) schools, as they have no choice unless they have herculean self control.

It seems sad that launching a kid has become this expensive. But with such a huge gap between the top and the rest, it is.

We do have that self-control, and did save aggressively, and still can't pay $70K/year/kid. We have succeeded in saving enough to pay up to about $50K/year/kid (which is still too much IMO).

There is NO reason for tuitions to rise every year at rates that far outpace inflation. None.