Why do donut hole families

[Anonymous]

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Anonymous wrote:For us the final straw was filling out the fAfsa and getting a question about whether my military husband had deployed to a combat zone in the past three years so the college could make sure to slurp up that danger pay that my husband put his as on the line for — especially since the form doesn’t ask about CEO bonuses, foreign service differentials etc. So many bad assumptions attached to that questions like the assumption that when you raise your kids alone for six months it costs the same as when you have a partner to help with the driving etc. or that people don’t cut back their own hours when their spouse deploys. Imagine if airlines raised the prices because someone’s husband got deployed it’s that level of stupidity that were objecting to.

1) that’s not why they ask about combat

2) it does ask about ALL bonuses because they are W-2 income or stock assets.

Educate yourself first and then post.

Why do they ask about combat?

So that it is properly excluded as an additional income source:

Don’t include extended foster care benefits, student aid, earned income credit, child tax credit, welfare payments, untaxed Social Security benefits, Supplemental Security Income, Workforce Innovation and Opportunity Act educational benefits, on-base military housing or military housing allowance, combat pay, benefits from flexible spending arrangements (e.g., cafeteria plans), foreign income exclusion, or credit for federal tax on special fuels.

+1
There is actually a lot of support for veterans in the FAFSA system and they are careful that they get their due benefits. It's one of the strengths.

Not all veterans or retirees have a GI bill. Not all retirees have VA/veteran status.

[Anonymous]

Anonymous wrote:I agree. Especially because most donut hole families can easily afford instate schools. I turned down W&M back in the day (instate) and went to CNU instead for financial reasons.

Um no. We can’t easily afford in state options, and we have received 0 aid.

[Anonymous]

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Anonymous wrote:Poor people do not have more options. Most truly poor people are not in the college pipeline.

Additionally, if those "donut hole" families lived like the poor people, rented where they rent, shopped where they shop, etc., they'd have tons of options too. Just saying.

+1

I get that some have special circumstances--medical debt or something unforeseen. But most donut hole families that I know made choices to spend elsewhere. New iPhone every year, 2 Starbucks trips per day, eating lunch out daily, eating half of dinners out, taking really nice vacations, new cars every 3-4 years, etc. Yes those are all "small things" in the grand scheme of savings, but that is just what is visible to me---I'm sure there is much more I don't even see. Someone with a mindset like that is choosing to spend on things when they could choose to save.
We knew our kids would get no aid, so we started saving as soon as they were born. We didn't start living a luxury lifestyle until we could afford it. We paid only 50% of what we could easily afford for our first house and lived there for 7 years. Sure we could afford a newer/nicer home, but we did not need it, this house had 4 bedrooms and 2.5 baths so enough space for a young family---it was relatively speaking much nicer than the apartment we came from. So we lived nicely but not luxuriously and saved the extras. We drove cars for 8-10 years and saved to pay cash for the next ones.
We also choose to not have kids until 30, so that allowed us to consciously save the extra salary and live off of basically one. We aggressively paid off all student loans, invested in our retirement. Other than our honeymoon, I was 35 before I took a "fancy vacation", yet we could have easily afforded to do so at 25/26. But that restraint allowed us to front load saving for college and then we could change our lifestyle as desired.

Same here. Our children can go almost anywhere, but only because we got started saving early and let the savings compound. We never made more than $120K either, but we've always banked at least one income. The irony is that we can now afford to live on one modest income and maintain our lifestyle. Plus, since most of our money is tucked away in retirement accounts and our house is paid off, our EFC is pretty low.

I always think about our situation when people on this board talk about not getting married until you are much older. It's a choice, but you don't get to set your family up nearly as well as if you partnered up earlier in life. However, there is nothing wrong with state schools and lower ranked colleges either.

Exactly. It's all about choices. And of course, nothing wrong with any college. Pick what works for your family, pick what's affordable. But if you choose to have kids before you have paid off your own college debt, it will be harder to save for college and that choice will impact your kid's college choices, just a simple fact of life. Life is about choices, and you get to live with the consequences of your choices as a responsible adult

Right, and if you don't have many or any choices, you are irresponsible. The fact that college costs have far outpaced inflation for decades - increasing by almost 144% in two decades - isn't relevant.

Right?

Obviously that is an issue. And we should work to address that, but given that majority of colleges are private not much can/will be done. However, there ARE affordable options to get an education and that’s the goal. So if you can’t afford on choice search for what you can afford. Not everything in life is fair, but majority of people can afford to get a college degree—just not at a top U for some

The only real affordable options out there for the AVERAGE American (not the "feel poor" DCUMers making $300k per year) is community college or commuting to a state university. Look up average HHIs around the country and tell me how these people are supposed to sock away hundreds of dollars per month for their kid to live on campus at even a state university? And then do that for multiple kids. It's just not reality for most. I'm not saying these are bad options but lets not pretend they're not limited.

I will never cease to be shocked by the clueless posters on here who think people could fully fund college if only they never got Starbucks, got rid of cable, or stop driving BMWs.

Stoping starbucks is not going to fully fund college for you. But The mentality of being frugal will go a long way. And buy a $25K car instead of a $60K car, and yes, you an get along way towards funding college. That's $35K to save. Start that when kid is little and do it with the next car in 8 years, instead of 5 years in between new cars and that's another $35-40K. If both parents do this, that's well over $100K to put towards college. From changing what car you drive---not to mention the insurance will be lower on a $25K vehicle, as well as maintenance. While it will not fully fund college, not driving an BMW will go a LONG WAY towards helping fund college. All for just swapping to a safe reliable decent vehicle instead of luxury. $25-30K will get you a very nice CRV/Accord type vehicle and those will last for 10+ years without many issues. But sure, go ahead buy your $50-60K BMW and complain you can't afford stuff.

And yes, I know people who spend $100/week at Starbucks, add up the family (2 adults and 2-3 kids) and it might be $150/week. That's $600/month. So add that to your $100K+ from car changes and you are saving $6 K more per year (I'll give you the extra $1k as treats/cost of making coffee/drinks at home).

So while you think it's ridiculous, I think the fact people spend $7K+ a year at Starbucks and complain they can't afford college to be ridiculous. Because they have plenty of things to be more frugal with and still live well and have the ability to save.

When I grew up poor/LMC, we ate out 1-2x/month and all other meals were at home. I packed my lunch for school for 12 years, I didn't get to stop at Starbucks (or the 1980's equivalents) with my friends as I did NOT have the money. We did not have cable, my parents got their first color TV in 1995. I had a "car to drive". It came with the privilege of knowing if it was cold morning, the heat/defrost might not work so I would have to pull over 2-3 times on the 6 mile drive to school to scrap my windshield so I could safely see/drive. Also knew how to have friends help me "push the same car" so I could pop the clutch and get it started many times since calling someone to do jump start cost $$.

Yet somehow, my parents still managed to find $5K (about 13% of their pretax income) to contribute towards my college each year and also pay for my books and airfare 2x/school year (to school in Aug, home/back for xmas and back again in May)So overall they managed to come up with ~$7-8K when they made less than $50K. They worked 2nd jobs and lived as frugally as possible and I contributed another $4-5K plus work study and loans each year.

I actually think this is decent advice in general, but some of us are only buying the $25k car (or less!) because that’s what we can afford to begin with, so there bo magical $35k savings from the purchase?

If lots folks are really spending $7k per year on Starbucks, ok fine. I don’t know anyone like that. I probably get coffee out 1-2x per month, and mostly from a local shop, so that’s maybe $100 annually to cut.

Our decisions are a bit more like, do we really need swim lessons during the school year? Does the roof really need to be replaced now?

Totally understand that. You don't have much "wants" to cut/adjust. The above is about the many many people I know/see who easily could cut and save for college but dont do so and then complain.
So you budget and attempt to save what you can. And you plan/prep your kids for the fact that Harvard is not affordable for you, so lets search for merit and find an awesome list of schools that we can afford---plenty that give merit if you search privates and have a decent student. Your kid will grow up knowing they need to work to help get thru college and do well in MS/HS to earn the most merit possible. But there are plenty of places your kid can attend. As I mentioned above, my parents managed to find over 10% of their income to help pay for college yet didn't make much. They managed to save a little and cash flow with 2nd jobs for one of them and I worked 60+Hrs in the summer and as much as I could every break I was home (and my at school job when I was at school).

I have a hard time relating to your posts, guessing you live and have a social circle that is much more UMC/UC if people gave this much money to burn….you should think before extrapolating their frivolous spending habits so broadly.

[Anonymous]

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Anonymous wrote:For all those who claim they didn't know what it was going to cost... that is BS, you didn't educate yourself. The information flow started with the advent of the internet, it has been in the news for 2 decades, savingforcollege.com came online at that time. We chose our family size because of the impending cost of college. That was 20 years ago. The information was there, you were ignorant bc you didn't inform yourself.

You waited until you were married to start saving for your future kids college? Why not earlier? SO weird you didn't plan even earlier, like you said the writing has been on the wall for decades.

This may come as a shock to you, but some people have student loans of their own, medical expenses or are low-paid.

Choices, people, choices.

Poor people shouldn’t go to college, got it

Poor people get financial aid. That’s not who the discussion is about.

Right. It’s about people who the institutions think can afford college, and the fact those people disagree.

You think you are entitled to live in a million dollar house and your kids get a free ride to college. Nope, you save and your kids go to state schools. Simple.

My house is a 600k house and my kid will be in state.

And, we have a 400K house so we saved that 200K you spent on a house for college.

Where is there a $400K house?

[Anonymous]

I think people are upset about the real issue - that blank check student loans allowed colleges to increase prices in a completely predatory way that’s out of line with inflation and salaries. Instead of talking about that, they talk about being a donut hole family.

[Anonymous]

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Anonymous wrote:For all those who claim they didn't know what it was going to cost... that is BS, you didn't educate yourself. The information flow started with the advent of the internet, it has been in the news for 2 decades, savingforcollege.com came online at that time. We chose our family size because of the impending cost of college. That was 20 years ago. The information was there, you were ignorant bc you didn't inform yourself.

You waited until you were married to start saving for your future kids college? Why not earlier? SO weird you didn't plan even earlier, like you said the writing has been on the wall for decades.

This may come as a shock to you, but some people have student loans of their own, medical expenses or are low-paid.

Choices, people, choices.

Poor people shouldn’t go to college, got it

Poor people get financial aid. That’s not who the discussion is about.

Right. It’s about people who the institutions think can afford college, and the fact those people disagree.

You think you are entitled to live in a million dollar house and your kids get a free ride to college. Nope, you save and your kids go to state schools. Simple.

My house is a 600k house and my kid will be in state.

And, we have a 400K house so we saved that 200K you spent on a house for college.

Where is there a $400K house?

Silver spring, Wheaton, Rockville.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I agree. Especially because most donut hole families can easily afford instate schools. I turned down W&M back in the day (instate) and went to CNU instead for financial reasons.

Um no. We can’t easily afford in state options, and we have received 0 aid.

What is your income and did you save? What is you lifestyle?

[Anonymous]

This is a tough thread to read - i can sense the frustration in many of the responses.
We could not afford $80k per year (we saved enough to swing $60k per year) but still encouraged our child to apply wherever their stats might lead to a good chance of admission (sat 1560 gpa 4/4.8 etc). We did however insist that he apply in state and to several lower tier universities that offer merit aid.
He got into three schools we couldn’t afford without any FA (one with very modest merit) and all the lower tier schools with merit aid
One reason we allowed him to apply to the more expensive schools is because we weren’t sure what to expect wrt financial aid - turns out nothing.
We were open with him from the outset but it was difficult to watch him at the college visits and then working on the “why I belong here” universities, knowing that he was working so hard for a ticket we might not be able to afford. In the end he decided on the instate option and has not really looked back and I am also more sanguine about how things worked out. Like many people here I thought he would have the same opportunities we had at his age. It is what it is.
Maybe we should start thinking of top 30 universities the way we think about private high schools. It never occurred to me to want my child to attend Sidwell or St Albans or GDS. We couldn’t afford them and our high performing public school was just fine. The top private schools in the DMV provide their students with an excellent education, interesting experiences and wonderful opportunities for future advancement However, you can’t get in unless you meet their standards and can pay their tuition. Otoh they will make exceptions for students with hooks (legacies, talents etc). I wonder whether when my child is planning for his own children, whether we will think of top 30 schools in a similar way.

[Anonymous]

Anonymous wrote:This is a tough thread to read - i can sense the frustration in many of the responses.
We could not afford $80k per year (we saved enough to swing $60k per year) but still encouraged our child to apply wherever their stats might lead to a good chance of admission (sat 1560 gpa 4/4.8 etc). We did however insist that he apply in state and to several lower tier universities that offer merit aid.
He got into three schools we couldn’t afford without any FA (one with very modest merit) and all the lower tier schools with merit aid
One reason we allowed him to apply to the more expensive schools is because we weren’t sure what to expect wrt financial aid - turns out nothing.
We were open with him from the outset but it was difficult to watch him at the college visits and then working on the “why I belong here” universities, knowing that he was working so hard for a ticket we might not be able to afford. In the end he decided on the instate option and has not really looked back and I am also more sanguine about how things worked out. Like many people here I thought he would have the same opportunities we had at his age. It is what it is.
Maybe we should start thinking of top 30 universities the way we think about private high schools. It never occurred to me to want my child to attend Sidwell or St Albans or GDS. We couldn’t afford them and our high performing public school was just fine. The top private schools in the DMV provide their students with an excellent education, interesting experiences and wonderful opportunities for future advancement However, you can’t get in unless you meet their standards and can pay their tuition. Otoh they will make exceptions for students with hooks (legacies, talents etc). I wonder whether when my child is planning for his own children, whether we will think of top 30 schools in a similar way.

When did people quit thinking of top private colleges this way?

[Anonymous]

Anonymous wrote:This is a tough thread to read - i can sense the frustration in many of the responses.
We could not afford $80k per year (we saved enough to swing $60k per year) but still encouraged our child to apply wherever their stats might lead to a good chance of admission (sat 1560 gpa 4/4.8 etc). We did however insist that he apply in state and to several lower tier universities that offer merit aid.
He got into three schools we couldn’t afford without any FA (one with very modest merit) and all the lower tier schools with merit aid
One reason we allowed him to apply to the more expensive schools is because we weren’t sure what to expect wrt financial aid - turns out nothing.
We were open with him from the outset but it was difficult to watch him at the college visits and then working on the “why I belong here” universities, knowing that he was working so hard for a ticket we might not be able to afford. In the end he decided on the instate option and has not really looked back and I am also more sanguine about how things worked out. Like many people here I thought he would have the same opportunities we had at his age. It is what it is.
Maybe we should start thinking of top 30 universities the way we think about private high schools. It never occurred to me to want my child to attend Sidwell or St Albans or GDS. We couldn’t afford them and our high performing public school was just fine. The top private schools in the DMV provide their students with an excellent education, interesting experiences and wonderful opportunities for future advancement However, you can’t get in unless you meet their standards and can pay their tuition. Otoh they will make exceptions for students with hooks (legacies, talents etc). I wonder whether when my child is planning for his own children, whether we will think of top 30 schools in a similar way.

That's the point. You cannot afford it so your child goes where you can afford but if you can save $60K per year you are not a donut family and you are pretty comfortable financially.

[Anonymous]

The worst is when your income growth is very recent. My best friend, a single parent of 2, made low 100s most of career. Her career took off 2-3 years before the fist went to school and income quickly went to the high 200s. No FA, and no time to save. So her good luck with work is basically just going to the colleges like she never got the career boost (with the added benefit of a more stressful role and more hours of work)!

[Anonymous]

Anonymous wrote:

Anonymous wrote:I agree. Especially because most donut hole families can easily afford instate schools. I turned down W&M back in the day (instate) and went to CNU instead for financial reasons.

Um no. We can’t easily afford in state options, and we have received 0 aid.

You CAN afford them. Not easily? Okay, that’s in the eye of the beholder.

[Anonymous]

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Anonymous wrote:For all those who claim they didn't know what it was going to cost... that is BS, you didn't educate yourself. The information flow started with the advent of the internet, it has been in the news for 2 decades, savingforcollege.com came online at that time. We chose our family size because of the impending cost of college. That was 20 years ago. The information was there, you were ignorant bc you didn't inform yourself.

You waited until you were married to start saving for your future kids college? Why not earlier? SO weird you didn't plan even earlier, like you said the writing has been on the wall for decades.

This may come as a shock to you, but some people have student loans of their own, medical expenses or are low-paid.

Choices, people, choices.

Poor people shouldn’t go to college, got it

Poor people get financial aid. That’s not who the discussion is about.

Right. It’s about people who the institutions think can afford college, and the fact those people disagree.

They disagree b/c they usually CAN'T. It's not reasonable to expect those families to spend every penny earned/saved and it sucks they have to accept an alternative scenario simply bc they can't do so. Yes, sorry, I still would like to save for retirement while my child is in college. And have healthcare. That cancer I had a few years back makes that necessary.

You can afford it by spending the money you saved/earned that isn’t in home equity or retirement. You just don’t want to. Fine. Don’t complain. Buy what you can afford. That’s what the vast majority of people are doing.

[Anonymous]

Anonymous wrote:The worst is when your income growth is very recent. My best friend, a single parent of 2, made low 100s most of career. Her career took off 2-3 years before the fist went to school and income quickly went to the high 200s. No FA, and no time to save. So her good luck with work is basically just going to the colleges like she never got the career boost (with the added benefit of a more stressful role and more hours of work)!

What’s wrong with income going up by exactly what you need to spend? If it were low 100s she’d still be expected to pay 30K or more and where would that come from? College is a bottle neck, and then she can celebrate.

[Anonymous]

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Anonymous wrote:For all those who claim they didn't know what it was going to cost... that is BS, you didn't educate yourself. The information flow started with the advent of the internet, it has been in the news for 2 decades, savingforcollege.com came online at that time. We chose our family size because of the impending cost of college. That was 20 years ago. The information was there, you were ignorant bc you didn't inform yourself.

You waited until you were married to start saving for your future kids college? Why not earlier? SO weird you didn't plan even earlier, like you said the writing has been on the wall for decades.

This may come as a shock to you, but some people have student loans of their own, medical expenses or are low-paid.

Choices, people, choices.

Poor people shouldn’t go to college, got it

Poor people get financial aid. That’s not who the discussion is about.

Right. It’s about people who the institutions think can afford college, and the fact those people disagree.

You think you are entitled to live in a million dollar house and your kids get a free ride to college. Nope, you save and your kids go to state schools. Simple.

My house is a 600k house and my kid will be in state.

And there are in-state options for your kid. So it all worked out. Nothing to complain about.