What is a "donut hole family"?

[Anonymous]

I feel like a broken record on this thread. Before you assume you don't qualify for need-based aid, do a net price calculator. A non-school specific non-profit one is available here: https://myintuition.org/quick-college-cost-estimator/.

For most (all?) of the most selective schools, families with HHI of up to and even in some cases OVER $200k ARE receiving need-based financial aid. The families who are not are the families with significant non-retirement assets (savings or investments). If someone tells you they aren't receiving need-based aid with a $180k HHI income at one of these kinds of schools, they have big $$ in accounts somewhere (EXCLUDING retirement...financial aid does not consider retirement $).

There are persistent rumors out there that families making $100-200k are not receiving financial aid when it's not the case at the most-desired schools. I don't know why this misconception is so ubiquitous.

[Anonymous]

Anonymous wrote:I feel like a broken record on this thread. Before you assume you don't qualify for need-based aid, do a net price calculator. A non-school specific non-profit one is available here: https://myintuition.org/quick-college-cost-estimator/.

For most (all?) of the most selective schools, families with HHI of up to and even in some cases OVER $200k ARE receiving need-based financial aid. The families who are not are the families with significant non-retirement assets (savings or investments). If someone tells you they aren't receiving need-based aid with a $180k HHI income at one of these kinds of schools, they have big $$ in accounts somewhere (EXCLUDING retirement...financial aid does not consider retirement $).

There are persistent rumors out there that families making $100-200k are not receiving financial aid when it's not the case at the most-desired schools. I don't know why this misconception is so ubiquitous.

To drive this point home, just did the calculator -- for a family with $250k HHI, $200k in savings, and $200k in non-retirement investment funds, they WOULD STILL RECEIVE FINANCIAL AID AT BROWN. ($13k in financial aid a year, no loans)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I live in a neighborhood full of true donut hole families. I would say household incomes are 100k - 150k.
Kids in my neighborhood are driving themselves to GMU.
Very few are going OOS, and those that are are going to schools that are highly undesirable here on DCUM.

These are the families that actually qualify for financial aid at private colleges. There are many places that are seeking out strong students with need, so the elite colleges that are the subject of this thread are actually more affordable to them than to families with incomes of $250K.

You’re assuming that all kids are “strong students”. No one is giving aid to kids with a 3.0.

Not the PP, but when people complain about being in a "donut hole" and implying that they have it worse off than middle income families, they are only talking about a small set of elite schools that guarantee to meet full need. For kids who have a chance at those schools there are plenty of other schools that will give them merit aid. For kids who don't have a chance at those schools, the "donut hole" kids are definitely better off than the lower income kids, because they can go to a lower status LAC which offers merit aid to everyone, or a state school where the tuition will be affordable to them, but likely still out of reach for the lower income kid, since those schools don't meet full need.

I'm not sure I believe the "donut hole" problem at all (not saying I don't believe that there are UMC families who want schools they can't afford, of course there are, I just don't think that this is a separate problem from there being families in every group but very rich who can't meet their EFC), but if it exists at all, it only applies to high stats kids.

Yes we are donut hole family with very high stats kids competitive for T20, I agree it is not an issue for those with no chance for those
Very top school not giving merits

[Anonymous]

Anonymous wrote:Most donut hole scenarios is that you marry around 30 and your HHI is about $100-$130K.

Mortgage, loans and daycare... no ability to save.

With a 5% increase in salary over the next few years you get to ~$150K.

Kids are 10 and maybe you can save $1000/month if you are lucky. After 8 years you have $80000 in college funds, divided by 2 kids, divided by 4 years, $10000/year to help pay college.

You now make $200K, no way, no how you are getting aid, college costs $40K-$80K/year.

You kid will only qualify for $5K, you can pay $10K out of earnings, $10K from saving and you are $15K - $55K/year in the hole... donut hole.

A parent plus loan is a 4% fee just to get the loan, the interest rates are 7%.

So you borrow against your retirement since that is cheaper, but not really because you are losing earnings.

At 75 you can finally retire to make up for your kids college.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I feel like a broken record on this thread. Before you assume you don't qualify for need-based aid, do a net price calculator. A non-school specific non-profit one is available here: https://myintuition.org/quick-college-cost-estimator/.

For most (all?) of the most selective schools, families with HHI of up to and even in some cases OVER $200k ARE receiving need-based financial aid. The families who are not are the families with significant non-retirement assets (savings or investments). If someone tells you they aren't receiving need-based aid with a $180k HHI income at one of these kinds of schools, they have big $$ in accounts somewhere (EXCLUDING retirement...financial aid does not consider retirement $).

There are persistent rumors out there that families making $100-200k are not receiving financial aid when it's not the case at the most-desired schools. I don't know why this misconception is so ubiquitous.

To drive this point home, just did the calculator -- for a family with $250k HHI, $200k in savings, and $200k in non-retirement investment funds, they WOULD STILL RECEIVE FINANCIAL AID AT BROWN. ($13k in financial aid a year, no loans)

That's basically us and sure, that's a little bit of aid, but it's not enough to make it a financially responsible option that would have been worth applying to: cost would be around 70k/year. At that level of savings, it would mean spending down nearly everything for college for two kids. We are doing in-state very cheaply and 529 will cover all costs.

[Anonymous]

400k savings for people in their 50s is the problem. Especially if they’re including any portion of home equity. Not everyone has access to employer-based retirement plans.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I feel like a broken record on this thread. Before you assume you don't qualify for need-based aid, do a net price calculator. A non-school specific non-profit one is available here: https://myintuition.org/quick-college-cost-estimator/.

For most (all?) of the most selective schools, families with HHI of up to and even in some cases OVER $200k ARE receiving need-based financial aid. The families who are not are the families with significant non-retirement assets (savings or investments). If someone tells you they aren't receiving need-based aid with a $180k HHI income at one of these kinds of schools, they have big $$ in accounts somewhere (EXCLUDING retirement...financial aid does not consider retirement $).

There are persistent rumors out there that families making $100-200k are not receiving financial aid when it's not the case at the most-desired schools. I don't know why this misconception is so ubiquitous.

To drive this point home, just did the calculator -- for a family with $250k HHI, $200k in savings, and $200k in non-retirement investment funds, they WOULD STILL RECEIVE FINANCIAL AID AT BROWN. ($13k in financial aid a year, no loans)

That's basically us and sure, that's a little bit of aid, but it's not enough to make it a financially responsible option that would have been worth applying to: cost would be around 70k/year. At that level of savings, it would mean spending down nearly everything for college for two kids. We are doing in-state very cheaply and 529 will cover all costs.

+1 sure, you get some token aid but at current Brown cost-of-attendance (just counting tuition, fees, room & board) you would be paying $75K per year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I live in a neighborhood full of true donut hole families. I would say household incomes are 100k - 150k.
Kids in my neighborhood are driving themselves to GMU.
Very few are going OOS, and those that are are going to schools that are highly undesirable here on DCUM.

These are the families that actually qualify for financial aid at private colleges. There are many places that are seeking out strong students with need, so the elite colleges that are the subject of this thread are actually more affordable to them than to families with incomes of $250K.

You’re assuming that all kids are “strong students”. No one is giving aid to kids with a 3.0.

There are colleges that will do that. My 1200/3.5UW/no AP kid got 35% of tuition merit award at two schools ranked in the 80s and 75% of tuition at one ranked around 130. You simply have to go to a school where your kid is at/Above 50% (and at/above 75/80th% for the 75%) and of course a school with 50%+ acceptance rate (which is where a kid with only a 3.0 is likely looking anyhow).

[Anonymous]

Anonymous wrote:I feel like a broken record on this thread. Before you assume you don't qualify for need-based aid, do a net price calculator. A non-school specific non-profit one is available here: https://myintuition.org/quick-college-cost-estimator/.

For most (all?) of the most selective schools, families with HHI of up to and even in some cases OVER $200k ARE receiving need-based financial aid. The families who are not are the families with significant non-retirement assets (savings or investments). If someone tells you they aren't receiving need-based aid with a $180k HHI income at one of these kinds of schools, they have big $$ in accounts somewhere (EXCLUDING retirement...financial aid does not consider retirement $).

There are persistent rumors out there that families making $100-200k are not receiving financial aid when it's not the case at the most-desired schools. I don't know why this misconception is so ubiquitous.

I think people underestimate how much aid they'll get at those incomes at private schools because, unlike a single parent teacher who will obviously get aid, a lot of the professional parents with a dad making 180k and a SAHM are not going to admit they got aid because they're trying to act rich. So the dad's coworkers who have similar jobs assume they won't get aid.

[Anonymous]

Comfortable families who make lifestyle choices like big expensive houses, cars, travel, eating out and don't save enough and expect their kids to go to privates. Then compain about it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I feel like a broken record on this thread. Before you assume you don't qualify for need-based aid, do a net price calculator. A non-school specific non-profit one is available here: https://myintuition.org/quick-college-cost-estimator/.

For most (all?) of the most selective schools, families with HHI of up to and even in some cases OVER $200k ARE receiving need-based financial aid. The families who are not are the families with significant non-retirement assets (savings or investments). If someone tells you they aren't receiving need-based aid with a $180k HHI income at one of these kinds of schools, they have big $$ in accounts somewhere (EXCLUDING retirement...financial aid does not consider retirement $).

There are persistent rumors out there that families making $100-200k are not receiving financial aid when it's not the case at the most-desired schools. I don't know why this misconception is so ubiquitous.

I think people underestimate how much aid they'll get at those incomes at private schools because, unlike a single parent teacher who will obviously get aid, a lot of the professional parents with a dad making 180k and a SAHM are not going to admit they got aid because they're trying to act rich. So the dad's coworkers who have similar jobs assume they won't get aid.

$180K a year IS rich.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I feel like a broken record on this thread. Before you assume you don't qualify for need-based aid, do a net price calculator. A non-school specific non-profit one is available here: https://myintuition.org/quick-college-cost-estimator/.

For most (all?) of the most selective schools, families with HHI of up to and even in some cases OVER $200k ARE receiving need-based financial aid. The families who are not are the families with significant non-retirement assets (savings or investments). If someone tells you they aren't receiving need-based aid with a $180k HHI income at one of these kinds of schools, they have big $$ in accounts somewhere (EXCLUDING retirement...financial aid does not consider retirement $).

There are persistent rumors out there that families making $100-200k are not receiving financial aid when it's not the case at the most-desired schools. I don't know why this misconception is so ubiquitous.

To drive this point home, just did the calculator -- for a family with $250k HHI, $200k in savings, and $200k in non-retirement investment funds, they WOULD STILL RECEIVE FINANCIAL AID AT BROWN. ($13k in financial aid a year, no loans)

At 250K a year there is no excuse they aren't saving more except for rare situations.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I live in a neighborhood full of true donut hole families. I would say household incomes are 100k - 150k.
Kids in my neighborhood are driving themselves to GMU.
Very few are going OOS, and those that are are going to schools that are highly undesirable here on DCUM.

Yeah I guess this is us. Except we live in DC so we have no in-state option. Yay.

You have UDC.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Could someone please explain, because it sounds like people with nice resources feeling entitled to more than they can afford.

No. It is a family that won’t qualify for FA but that doesn’t have the resources to reasonably handle tuition at the priciest/most elite colleges. I don’t know about families feeling entitled, but from the colleges’ standpoint it is a real problem that they are concerned about. They don’t want their student populations to come from two stratified socioeconomic groups.

Merit aid would address this problem, since it’s usually the MC (donut) families that have the highest performing kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I feel like a broken record on this thread. Before you assume you don't qualify for need-based aid, do a net price calculator. A non-school specific non-profit one is available here: https://myintuition.org/quick-college-cost-estimator/.

For most (all?) of the most selective schools, families with HHI of up to and even in some cases OVER $200k ARE receiving need-based financial aid. The families who are not are the families with significant non-retirement assets (savings or investments). If someone tells you they aren't receiving need-based aid with a $180k HHI income at one of these kinds of schools, they have big $$ in accounts somewhere (EXCLUDING retirement...financial aid does not consider retirement $).

There are persistent rumors out there that families making $100-200k are not receiving financial aid when it's not the case at the most-desired schools. I don't know why this misconception is so ubiquitous.

To drive this point home, just did the calculator -- for a family with $250k HHI, $200k in savings, and $200k in non-retirement investment funds, they WOULD STILL RECEIVE FINANCIAL AID AT BROWN. ($13k in financial aid a year, no loans)

At 250K a year there is no excuse they aren't saving more except for rare situations.

Most people who make 250k in middle age didn't make 250k at 25 or even 35, often had their own loans and no family support. I would think it's more the norm than not actually. Those are good savings and nobody is saying it warrants a full ride. That 13k/year is just not making Brown a more viable option.