Donut hole reality

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Part of why it's gotten so insanely expensive to go to many colleges is because families that are UMC are expected to shoulder not just the cost of their own kid attending but all the kids that are attending for free or at low rates. I want those kids to go to college too but that should be funded from either government money or endowments not jacking up tuition on other families struggling to pay for school too.

💯

That’s the big secret of the schools that no one talks about. Who is really funding all of the need blind awards. It’s not the endowments. And it’s def not the government.

It’s the fact that tuition goes up every year and insane amount and families with over $300,000 in income are expected to be full pay. That is robbery from one group to satisfy the other.

At 300k you can afford it. It’s those of us making half that

np.. $300K HHI cannot afford $100K/year college for two kids. Are you joking?

35% already goes to taxes; the rest would go to paying for college. What do they live on?

And before you say, "they should've saved for college": you assume that the $300K HHI couple were making that much when the kids were born. Also, people still need to save fore retirement. Ageism is real. My spouse and I are feeling it. We will probably be forced into early retirement, with no health benefits.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Having been through this process, and saved quite a bit towards college, we still chose public school as do many people in our financial situation. The biggest problem with the belief that "donut reality" means being shut out, is letting rich people convince you that expensive is better. Despite what US news claims, in reality, a kid can have the fabulous life and a quality education and not deplete their parents of every cent they saved, plus take on debt and undue stress, for an undergrad degree.

And they should stop reading this forum and the private school forum immediately .

So many prestige strivers. We had kids get into top 10 schools, but with no aid and enough in 529 to fully cover in-state tuition. They chose the in-state option.

Frankly, the tables are turning. More and more high stat UMC families are no longer paying for private/ivies. The top in-state schools are getting stronger and stronger as a result. Add in the fact that many top employers have stated that they would rather have a top state college kid than many of the Ivies and you really are going to see a shift.

The high cost of tuition has reached a tipping point. It seems $85-90k is it. It will be six-figures a year for privates by the time a Freshmen makes it to Senior year.

Now you only have the poor and the uber rich at Ivies which is an awful dynamic, but mirrors the US.

And it's crazy. We drive only Hondas. We have one that is a 2006, in addition to a 2020. We aren't wearing fancy clothes or traveling to Europe. Travel sports are the biggest expense.

Yeah, middle class kids aren't doing "Travel sports". That is typically $5-10K+ per year. So see, you could have easily saved $5-10K/year for college, you chose not to. Most rec sports do not cost more than $500/year.

beg to differ. MANY middle class kids are doing travel sports. they shouldn't be, but they are.

Then their parents shouldn't complain about finances. Travel sports is a "luxury" not a requirement. It's not fiscally smart to do travel sports if it prevents you from saving for college or retirement. Your kid can still play sports for $400-500 for the year (or less).

Real middle class cannot afford travel teams.

I pay $400 just for my kid to be on the school sports team for a season.

[Anonymous]

Anonymous wrote:There is a group on the donut hole threads that always join in and shame people for not saving enough for their kids’ college. They “claim” that even if you have special needs kids and parents to support and other specific high expenses, you should still somehow have been able to sacrifice enough to fully fund college for multiple kids on $150k per year.

First, I question the math, second at $150k hhi they will get significant aid so their point is moot.

But the real point missing is opportunity cost. What alot iof us are trying to say is just what are you sacrificing to get to that savings?? For us, it would be trips to see their grandparents far away. It would also be funding our retirement adequately. And what are the other financial tradeoffs you are making by “investing” an extra $50 to $60k per year in a private school vs a starter home or roth for your kid?

It makes more sense to save enough for an instate price and then by some miracle if we have extra, it be invested for their future. No way a private vs public degree earning premium will outpace the stock market or real estate.

Here's the problem. People who can afford full pay are complaining that people who earn less and need aid should give it up for them because they didn't save. No one is shaming you for not saving, but you can't then cry foul because you, on your generous salary, can't cashflow private college cost. And, by generous, I mean over 250k, usually 300k+.

I have seen no one claim what you suggest. People on 150k qualify for aid at top schools. Even 200k. The notion that people are claiming to save enough for full pay is a false statement. Nobody said that. Many of us have said that on 150k we get decent FA. We also saved enough to cover the rest, even on less than that amount when kids were younger. I've said several times that people with additional expenses, especially family healthcare, will get aid at top schools. I just helped a family on 250k/yr do this.

But, sure, attack those of us who make 150k, get some FA and save for the remainder. Because the wealthy are the real victims here.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Part of why it's gotten so insanely expensive to go to many colleges is because families that are UMC are expected to shoulder not just the cost of their own kid attending but all the kids that are attending for free or at low rates. I want those kids to go to college too but that should be funded from either government money or endowments not jacking up tuition on other families struggling to pay for school too.

💯

That’s the big secret of the schools that no one talks about. Who is really funding all of the need blind awards. It’s not the endowments. And it’s def not the government.

It’s the fact that tuition goes up every year and insane amount and families with over $300,000 in income are expected to be full pay. That is robbery from one group to satisfy the other.

At 300k you can afford it. It’s those of us making half that

np.. $300K HHI cannot afford $100K/year college for two kids. Are you joking?

35% already goes to taxes; the rest would go to paying for college. What do they live on?

And before you say, "they should've saved for college": you assume that the $300K HHI couple were making that much when the kids were born. Also, people still need to save fore retirement. Ageism is real. My spouse and I are feeling it. We will probably be forced into early retirement, with no health benefits.

they should've saved for college

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Part of why it's gotten so insanely expensive to go to many colleges is because families that are UMC are expected to shoulder not just the cost of their own kid attending but all the kids that are attending for free or at low rates. I want those kids to go to college too but that should be funded from either government money or endowments not jacking up tuition on other families struggling to pay for school too.

💯

That’s the big secret of the schools that no one talks about. Who is really funding all of the need blind awards. It’s not the endowments. And it’s def not the government.

It’s the fact that tuition goes up every year and insane amount and families with over $300,000 in income are expected to be full pay. That is robbery from one group to satisfy the other.

At 300k you can afford it. It’s those of us making half that

np.. $300K HHI cannot afford $100K/year college for two kids. Are you joking?

35% already goes to taxes; the rest would go to paying for college. What do they live on?

And before you say, "they should've saved for college": you assume that the $300K HHI couple were making that much when the kids were born. Also, people still need to save fore retirement. Ageism is real. My spouse and I are feeling it. We will probably be forced into early retirement, with no health benefits.

Of course they can save. Not all of it. But, say at 200k 10 years prior, they could save 10-20k per year. That builds up in the market. Now, at 300k per year, they can cashflow part of it. It's not tge black and white scenario you describe.

We started saving when we made 90k/yr and kids were like 5/6. We could only contribute $25/mo at the time, but that grew to $100/mo when we hit $120k/yr, and as a freelancer, I'd put in a few hundred or a thousand here or there if I had a good run. We have 2 kids and saved about 100k ea (savings + growth) by the time they started college. We now make about 140k. Both kids get some FA at CSS schools. We also took the fed loan.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:That’s not donut hole. That’s a comfortable family. The rest of our kids go to state schools.

This. If you have sticker shock, but the ability to pay you aren't really a donut hole.

Ability to pay when that ability means constant struggle, isn’t really comfortable.

Families with more than one kid and $250-300k don’t get financial aid. Paying $180-200k/year for kids’ tuition isn’t easy.

You save starting at birth, consider your spending and live way below your means.

Colleges have become the modern-day version of the pyramids. Basically for most of your adult life it's this massive constant drain on your resources, and for what!?

[Anonymous]

What do they live on?

300k in
100 to taxes
100 to college
100 to live on

It’s okay to not save for college, retirement these four years. Just tread water. That’s a pretty good spot considering you didn’t save for 18 years.

[Anonymous]

Anonymous wrote:What do they live on?

300k in
100 to taxes
100 to college
100 to live on

It’s okay to not save for college, retirement these four years. Just tread water. That’s a pretty good spot considering you didn’t save for 18 years.

These are all skewed numbers. For tax, 300k will have MANY deductions and child credits. If cap gains is part of that 300k, also a lower rate. Retirement, not taxed.

They could have saved over 10-15 years and easily be halfway or 3/4 there, paying only 25-50k for college. This notion that it's cashflow everything or save 400k by 18 is ridiculous.

[Anonymous]

Anonymous wrote:What do they live on?

300k in
100 to taxes
100 to college
100 to live on

It’s okay to not save for college, retirement these four years. Just tread water. That’s a pretty good spot considering you didn’t save for 18 years.

? you assume one child. And it's not ok to not save for retirement and just tread water. That is a stupid move.

Yes, we did save, but it's not enough for 4 yr * 2 kids * $100K/year. We had saved probably a little over $300K for two kids.

Sure, they don't need to go to an expensive school, and they aren't. DC got merit to our in state flagship and is doing well there.

My point is that people assume that a HHI $300K should be able to afford $800K for college over 4 years. That is not true. We are in our 50s/60s, and ageism has hit us. We are probably going to be forced to retire soon, and with no subsidized healthcare.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What do they live on?

300k in
100 to taxes
100 to college
100 to live on

It’s okay to not save for college, retirement these four years. Just tread water. That’s a pretty good spot considering you didn’t save for 18 years.

These are all skewed numbers. For tax, 300k will have MANY deductions and child credits. If cap gains is part of that 300k, also a lower rate. Retirement, not taxed.

They could have saved over 10-15 years and easily be halfway or 3/4 there, paying only 25-50k for college. This notion that it's cashflow everything or save 400k by 18 is ridiculous.

What deductions do you speak of? SALT deductions now capped. There's no child tax credit for people making that much.

[Anonymous]

It is amazing that all of us are falling for blaming each other, rather than blaming a rigged system, which is the real problem. It is like working class people and new immigrants complaining about who gets or deserves Medicaid or food stamps while the 1% laughs and counts their money.

The problem isn't that upper middle class people aren't saving enough. It is that a corrupt higher ed system has no restraint on its pricing and acts more like Gucci than a public good, despite claiming non-profit status and accepting tons of government funding.

The student loan industrial complex has supported this, and rather than keeping tuition affordable schools are building luxury amenities that we all managed to do without in the 80s and 90s. Yet they outsource teaching to adjuncts who make poverty-level wages. And now there's a sticker price vs some opaque real cost that involves the equivalent of haggling with a used car salesman.

But sure, point the finger at someone who makes $50k more than you.

[Anonymous]

Anonymous wrote:It is amazing that all of us are falling for blaming each other, rather than blaming a rigged system, which is the real problem. It is like working class people and new immigrants complaining about who gets or deserves Medicaid or food stamps while the 1% laughs and counts their money.

The problem isn't that upper middle class people aren't saving enough. It is that a corrupt higher ed system has no restraint on its pricing and acts more like Gucci than a public good, despite claiming non-profit status and accepting tons of government funding.

The student loan industrial complex has supported this, and rather than keeping tuition affordable schools are building luxury amenities that we all managed to do without in the 80s and 90s. Yet they outsource teaching to adjuncts who make poverty-level wages. And now there's a sticker price vs some opaque real cost that involves the equivalent of haggling with a used car salesman.

But sure, point the finger at someone who makes $50k more than you.

So much this.

[Anonymous]

ITA the fault lays with the greedy colleges. The really pricey ones with a large endowment can easily lower the tuition, and then not need to give out so much aid. They keep the price high due to greed and the perception of it being "selective".

[Anonymous]

Anonymous wrote:There is a group on the donut hole threads that always join in and shame people for not saving enough for their kids’ college. They “claim” that even if you have special needs kids and parents to support and other specific high expenses, you should still somehow have been able to sacrifice enough to fully fund college for multiple kids on $150k per year.

First, I question the math, second at $150k hhi they will get significant aid so their point is moot.

But the real point missing is opportunity cost. What alot iof us are trying to say is just what are you sacrificing to get to that savings?? For us, it would be trips to see their grandparents far away. It would also be funding our retirement adequately. And what are the other financial tradeoffs you are making by “investing” an extra $50 to $60k per year in a private school vs a starter home or roth for your kid?

It makes more sense to save enough for an instate price and then by some miracle if we have extra, it be invested for their future. No way a private vs public degree earning premium will outpace the stock market or real estate.

Obviously it makes more sense to save for retirement and travel to see grandparents a few times per year and only save for in-state. There are plenty of options in-state and with private schools that offer excellent merit to bring price down to $25-30K/year. That is what majority of people do---they save for what they can afford. I agree, it makes more sense to not save for $90K+ schools. But then you don't get to complain that your kid cannot attend. It's all about choices. Majority of people don't even consider the costlier schools, they find a great school they can actually afford, just like they do with everything else in life (ie find something they can afford)

So it's not "shaming". It is just pointing out that life is all about choices. Make the ones that make the most financial sense for your family. And yes, for majority of people, 90K+ universities at full pay are not a part of the smart equation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Having been through this process, and saved quite a bit towards college, we still chose public school as do many people in our financial situation. The biggest problem with the belief that "donut reality" means being shut out, is letting rich people convince you that expensive is better. Despite what US news claims, in reality, a kid can have the fabulous life and a quality education and not deplete their parents of every cent they saved, plus take on debt and undue stress, for an undergrad degree.

And they should stop reading this forum and the private school forum immediately .

So many prestige strivers. We had kids get into top 10 schools, but with no aid and enough in 529 to fully cover in-state tuition. They chose the in-state option.

Frankly, the tables are turning. More and more high stat UMC families are no longer paying for private/ivies. The top in-state schools are getting stronger and stronger as a result. Add in the fact that many top employers have stated that they would rather have a top state college kid than many of the Ivies and you really are going to see a shift.

The high cost of tuition has reached a tipping point. It seems $85-90k is it. It will be six-figures a year for privates by the time a Freshmen makes it to Senior year.

Now you only have the poor and the uber rich at Ivies which is an awful dynamic, but mirrors the US.

And it's crazy. We drive only Hondas. We have one that is a 2006, in addition to a 2020. We aren't wearing fancy clothes or traveling to Europe. Travel sports are the biggest expense.

Yeah, middle class kids aren't doing "Travel sports". That is typically $5-10K+ per year. So see, you could have easily saved $5-10K/year for college, you chose not to. Most rec sports do not cost more than $500/year.

beg to differ. MANY middle class kids are doing travel sports. they shouldn't be, but they are.

Then their parents shouldn't complain about finances. Travel sports is a "luxury" not a requirement. It's not fiscally smart to do travel sports if it prevents you from saving for college or retirement. Your kid can still play sports for $400-500 for the year (or less).

Do you really think 7 years of basketball at $700 a year is the difference between an 80k a year SLAC and a 40k a year public?

Travel sports is much more than $700 per year. It's a $10-15K/year commitment and extra training in the off seasons that often costs another $5k+. So yeah, if instead of putting your 8 yo into travel sports and save that $10-15K for the next 10 years, it can be the difference, or at least a huge part of it.