Donut hole reality

[Anonymous]

There used to be a belief that higher education was a societal goods that we all had a vested interest in supporting. We believed in social mobility and having an educated populace that could compete with any nation in the world. It is why there was a GI bill, Pell Grants, etc.

You can save a lot, but tuition has been going up at a rate much greater than average income. It is more out of reach than it used to be. So people are understandably frustrated. They can’t keep up and they’ve seen higher ed shift from a common good to a luxury good.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:People who claim donut hole and are angry that they only have 130k in an account —are you also stomping your feet that you can’t afford the 2M mansions in the other town? Do you ping away at what you cannot have? Or are you happy that you have a good home in a solid town. Because you are indeed able to afford a good education via state universities. I swear college admissions is the only area where this nonsense comes into play. For everything else in life you buy what you can afford in your budget and move one. Why do you think you are entitled to a high priced private college. You have 100s even 1000s of colleges available to you via public universities.

It’s because so many selective colleges have policies where incomes under $150k students can attend free. Or under $200k, students qualify for need-based aid, and so on.

“Donut hole” (terrible name) is this window of income that puts you above need-based aid, but not enough to save as much as you’d had hoped.

The people who use the term tend to be jerks so it’s understandable why they’re disliked so much, but so many regular people fall into this category. They are stretched with housing, retirement, elder care, college savings, inflation and on and on. And yes, our kids end up going to public colleges or community schools, and doing ok. But, as a policy matter, it does sting that someone earning just a bit less than you qualifies for aid. I know there’ll be someone who says “well then earn less!” 🙄 there’s always a rebuttal to everything, but that’s the honest answer.

It’s about lifestyle choices. Two families on the same income and one chooses a million dollar house and one chooses a $400k house. The million dollar house family with more kids should not get rewarded for their poor decisions.

We picked the 400k house. We still couldn't pay 85k/year times 2 for college. Or I guess we "could", but it would be a financially stupid decision!

Same here but I guess it makes people like the PP feel better to make these assumptions. We are not going on fancy vacations and we settled for a 2300sq ft house. Still couldn’t pay full price at privates.

2300 square feet is huge to us. We have 1000. We don’t vacation.

[Anonymous]

Anonymous wrote:actual middle class people rarely have $500/month from their kid's birth to sock away into college funds

They shouldn't have kids then. This place is so out of touch.

/s

[Anonymous]

Anonymous wrote:

Anonymous wrote:actual middle class people rarely have $500/month from their kid's birth to sock away into college funds

They shouldn't have kids then. This place is so out of touch.

/s

Saying middle class people should not have kids isn’t out of touch?!

[Anonymous]

Anonymous wrote:My child is interested in a very niche major that is not available in any VA public schools. Even with the academic common market, her only in state options are two schools in Kentucky.

What is that major? There are so many different options than when I went to school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:People who claim donut hole and are angry that they only have 130k in an account —are you also stomping your feet that you can’t afford the 2M mansions in the other town? Do you ping away at what you cannot have? Or are you happy that you have a good home in a solid town. Because you are indeed able to afford a good education via state universities. I swear college admissions is the only area where this nonsense comes into play. For everything else in life you buy what you can afford in your budget and move one. Why do you think you are entitled to a high priced private college. You have 100s even 1000s of colleges available to you via public universities.

It’s because so many selective colleges have policies where incomes under $150k students can attend free. Or under $200k, students qualify for need-based aid, and so on.

“Donut hole” (terrible name) is this window of income that puts you above need-based aid, but not enough to save as much as you’d had hoped.

The people who use the term tend to be jerks so it’s understandable why they’re disliked so much, but so many regular people fall into this category. They are stretched with housing, retirement, elder care, college savings, inflation and on and on. And yes, our kids end up going to public colleges or community schools, and doing ok. But, as a policy matter, it does sting that someone earning just a bit less than you qualifies for aid. I know there’ll be someone who says “well then earn less!” 🙄 there’s always a rebuttal to everything, but that’s the honest answer.

It’s about lifestyle choices. Two families on the same income and one chooses a million dollar house and one chooses a $400k house. The million dollar house family with more kids should not get rewarded for their poor decisions.

We picked the 400k house. We still couldn't pay 85k/year times 2 for college. Or I guess we "could", but it would be a financially stupid decision!

Same here but I guess it makes people like the PP feel better to make these assumptions. We are not going on fancy vacations and we settled for a 2300sq ft house. Still couldn’t pay full price at privates.

2300 square feet is huge to us. We have 1000. We don’t vacation.

All that so you can pay full price for college? Not sure it’s wise actually.

[Anonymous]

Why do rich people here keep trying to pass themselves off as middle class. If you make enough money to be offered no aid at top tier schools, then you had plenty of money beyond driving used carsxand not buying Starbucks (but those help too). For those of us truly middle class, many of us saved AND get financial aid. If I made 250k instead of 150k, I'd have saved enough (barring medical or other unusual circumstances) to go to any school full cost. I might be saving most and paying some as I went, though. This notion that people are outraged that they need 400k by senior is based on a fallacy. You have 3 more years and investment appreciation for that last year. Y'all just don't want to spend it and don't want the people who can afford less to get aid.

[Anonymous]

Anonymous wrote:There used to be a belief that higher education was a societal goods that we all had a vested interest in supporting. We believed in social mobility and having an educated populace that could compete with any nation in the world. It is why there was a GI bill, Pell Grants, etc.

You can save a lot, but tuition has been going up at a rate much greater than average income. It is more out of reach than it used to be. So people are understandably frustrated. They can’t keep up and they’ve seen higher ed shift from a common good to a luxury good.

We still believe in higher education. There are still plenty of affordable options. In VA---take VCU/GMU. Both good educations, both under $30K. Both will offer your "high stats student" good merit as well. So let's say your kid gets $5K merit and kid takes the ~$5K in student loans. Now you need to find a way to pay $20K/year. If kid works breaks, summer, and PT during the year (just for minimum wage), kid can bring in $8K. That leaves $12K for the parents to assist with. Most MC families and up can manage that.

There are nearly 4K universities in the USA. Most are NOT $85K+. There are plenty that are affordable. So pick on that is affordable to you. you do you---if you have chosen to save more, then more doors are opened for you, if not there are still ones that offer good merit/etc and you can find one that will work for your family. You don't have to go into massive debt to get higher educations.

[Anonymous]

Anonymous wrote:

Anonymous wrote:actual middle class people rarely have $500/month from their kid's birth to sock away into college funds

They shouldn't have kids then. This place is so out of touch.

/s

Nope, they should have kids if they. want. Then they should encourage their kids to do the best they can academically and then search for colleges that they can afford---there are plenty that offer good merit. But it would be foolish to go into massive debt to get an education. It doesn't have to be that way. But if you can save $100/month start with that, or have your kid start at more affordable CC and then transfer to 4 year.

[Anonymous]

There is nothing else you buy where the price is set based on what the seller thinks you can afford.

[Anonymous]

Anonymous wrote:There used to be a belief that higher education was a societal goods that we all had a vested interest in supporting. We believed in social mobility and having an educated populace that could compete with any nation in the world. It is why there was a GI bill, Pell Grants, etc.

You can save a lot, but tuition has been going up at a rate much greater than average income. It is more out of reach than it used to be. So people are understandably frustrated. They can’t keep up and they’ve seen higher ed shift from a common good to a luxury good.

True middle class students can get financial aid. If you’re in the top 10 percent tier for income, you won’t likely get financial aid.

[Anonymous]

Anonymous wrote:

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Anonymous wrote:

Nobody is entitled to an elite education. We do have many many affordable ways to get a college education. CC to 4 year state school, in-state 4 year from start, private schools (with good merit many times), OOS schools with merit, and very expensive private schools.
You go where you can afford. Your kid will get a great education most places. Pick one within your budget and move on.

Exactly - no one is entitled to an elite education except the wealthy and poor so the wealthy can feel good about themselves. Middle and upper middle class people, please stay in your lane. Your lane being in state schools, cc to instate schools, lesser/non elite schools that give tons of merit. Don’t even think about aspiring to more. Leave elite schools to the elite. Stay in your lane. When they talk about diversity and all that stuff, just realize it is lip service and they aren’t talking about you

This is SPOT ON.

Yes, it is.

AND IT DIDN'T USED TO BE THIS WAY.

You are correct - it used to be that only rich people could afford Ivies. There were limited scholarships, but not the type and breadth of assistance they have now. How was a poor kid from Mississippi supposed to even be able to afford to travel back and forth to Boston, even if tuition was covered?

These days, elite schools have generous assistance for truly poor/LMC kids, and so now the parents of the UMC kids are whining. If your kid gets into Harvard, they pay nothing if your income is less than $85k, if your income is between $85k and $150k, you'll pay less than 10% of your annual income, and they offer financial assistance to some people above $150k. If you make more than $200k a year, and you want your kid to go to a "top" college, save money for that (and by the way, you are *not* "middle class"). If you saved $500 a month since the kid was born, you'd have $265k in their college fund. If your kid has Ivy-level stats, they'll be granted all kinds of merit aid to go to the majority of the top 100 academic institutions in this country. Yes, there are a small number of "elite" colleges that don't have generous financial aid for people making $150k and don't give merit aid. If your kid can't go to Vanderbilt for free, your kid can go to go to a virtually indistinguishable college in another town that does offer merit aid. Life isn't fair. I, for one, am happy that "elite" colleges try to make life a little fairer by providing aid to kids that are truly disadvantaged. That group, however, does not include UMC kids whose parents chose not to save money for their college education.

Perfectly said.

[Anonymous]

Ok I’ll bite. I make $193,000.00 as a government attorney. However the first 20 years I was paying student loans. I paid them off. I didn’t get student loan forgiveness. Then and only then did I have one child but if course it took years and now I’m an older mom. I have been saving in a 529 for 8 years now but I will never reach the numbers required to pay tuition at the school I attended. Maybe I’ll just retire the year before I have to fill out the FASFA as it’s the only way I will get any aid. I also had medical bills and sent money to my mother. But sure I’m UMC.

[Anonymous]

Anonymous wrote:There is nothing else you buy where the price is set based on what the seller thinks you can afford.

ACA health insurance actually is the same: you can pay $9/mo or you can pay $400/mo for the exact same plan. It's an issue for the same economic bracket.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:People who claim donut hole and are angry that they only have 130k in an account —are you also stomping your feet that you can’t afford the 2M mansions in the other town? Do you ping away at what you cannot have? Or are you happy that you have a good home in a solid town. Because you are indeed able to afford a good education via state universities. I swear college admissions is the only area where this nonsense comes into play. For everything else in life you buy what you can afford in your budget and move one. Why do you think you are entitled to a high priced private college. You have 100s even 1000s of colleges available to you via public universities.

It’s because so many selective colleges have policies where incomes under $150k students can attend free. Or under $200k, students qualify for need-based aid, and so on.

“Donut hole” (terrible name) is this window of income that puts you above need-based aid, but not enough to save as much as you’d had hoped.

The people who use the term tend to be jerks so it’s understandable why they’re disliked so much, but so many regular people fall into this category. They are stretched with housing, retirement, elder care, college savings, inflation and on and on. And yes, our kids end up going to public colleges or community schools, and doing ok. But, as a policy matter, it does sting that someone earning just a bit less than you qualifies for aid. I know there’ll be someone who says “well then earn less!” 🙄 there’s always a rebuttal to everything, but that’s the honest answer.

It’s about lifestyle choices. Two families on the same income and one chooses a million dollar house and one chooses a $400k house. The million dollar house family with more kids should not get rewarded for their poor decisions.

We picked the 400k house. We still couldn't pay 85k/year times 2 for college. Or I guess we "could", but it would be a financially stupid decision!

Same here but I guess it makes people like the PP feel better to make these assumptions. We are not going on fancy vacations and we settled for a 2300sq ft house. Still couldn’t pay full price at privates.

2300 square feet is huge to us. We have 1000. We don’t vacation.

All that so you can pay full price for college? Not sure it’s wise actually.

How is that not wise? We will full pay for a state school and grad school. No debt. We don’t expect charity.