What is a "donut hole family"?

[Anonymous]

Anonymous wrote:People who do not qualify for financial aid, but whose real economic situation means they can't afford expensive colleges even if their kids are admitted. They are the families whose kids turn down Carnegie Mellon and take the merit award at Pitt.

This.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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

It is people in the 25%-10% percentile in family income distribution in the USA, or especially in the major metropolitan areas. Those families can afford 1-2 kids going to in-state universities at full pay, but would not be able to pay (without selling chunks of their house value etc...) the private pay tuition/board at $80K/year for 1-2 kids, but whose family income is too high for any need-based aid from financial aid programs (either federal or from the university) but who are by definition solidly upper middle class and so aspire to the same colleges as the 10%-1% families and whose previous generations WERE able to afford to be full pay and private colleges in the USA but are now priced out due to the over-inflation of tuition compared to income growth over the last 30-40 years.

What further complicates it is that FAFSA doesn't care whether you live in the DMV or Mississippi. Your housing and other costs are irrelevant.

In high COL areas, it's even difficult for people in the 95th percentile in family income to pay multiple tuitions of $80K/year and rising.

100%

[Anonymous]

Anonymous wrote:Ah yes, the mythical 400k house in the DMV

Why is that mythical?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No, you nailed it. It’s people who have enough money but because of other choices they made, don’t have it available for other choices they wish they could make with respect to expensive schools.

I'm a WUSTL alumna. We make $250,000 a year as a household. We do not qualify for financial aid. DCs could get into WUSTL, but there's no way we could pay cash for WUSTL. It's over $87,000 a year. I don't know what "lifestyle choices" would have allowed us to pay for three kids to go to an expensive school.

It's fine. We have excellent state school choices available to us.

Live in less house, drive older cars, take less expensive vacations…

They probably do all of these things. Why is there this weird cult on this site that always repeats these same things (new cars and expensive vacations!) even though no one indicates otherwise? It’s like you read an article once about people who overspend and now just assume that anyone who raises any issue with money is therefore doing that exact thing you read about.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:People who do not qualify for financial aid, but whose real economic situation means they can't afford expensive colleges even if their kids are admitted. They are the families whose kids turn down Carnegie Mellon and take the merit award at Pitt.

But can’t they/don’t they take out loans to pay the tuition?

A family earning around 250k is not going to take out loans to cover the 50k a year difference in cost between publics and privates for multiple kids unless they are utterly terrible with money

What about student loans? Kids can payoff later? Why won’t donut hole families go for that option? Each kid takes out 50-60k loan per year to cover the cost of college?

Our DC couldn't get loans. They were all Parent Plus which would be in our name anyway.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No, you nailed it. It’s people who have enough money but because of other choices they made, don’t have it available for other choices they wish they could make with respect to expensive schools.

I'm a WUSTL alumna. We make $250,000 a year as a household. We do not qualify for financial aid. DCs could get into WUSTL, but there's no way we could pay cash for WUSTL. It's over $87,000 a year. I don't know what "lifestyle choices" would have allowed us to pay for three kids to go to an expensive school.

It's fine. We have excellent state school choices available to us.

Yeah, notice how the “lifestyle choices” people never engage on the actual cost of these schools or how much it has increased in real terms over time. And especially what that looks like if you have more than one kid.

To be fair, the number of children one decides to raise is also a lifestyle choice.

It's one of the most important lifestyle choice ones makes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:new poster here

Wow. I thought we were a "donut hole" family but I guess not.

What is a step below "donut hole" called? We make too much to qualify for aid, but paying for an expensive school would involve far more than "liquidating assets." It would be more like taking on a second full time job, skipping at least one meal a day, absolutely zero entertainment budget (not even cable tv or netflix) etc.

Well, there is this thing that you had 18 years to save for college. Which is what most people do.

Most people…do not save for college for 18 years. Because they are supporting their families, paying off their own student debt, and trying to save for retirement.

The bootstrap plan:

Put away close to $2000 every single month since 2007, without fail. Cut any corner you need to with regards to housing, other costs, etc.

Then your kid miraculously gets into a school with a sub-10% admit rate.

You have somehow foreseen this back during the George W Bush administration so you know this was a worthy opportunity cost scenario.

Take the entire sum you saved plus gains and hand THE ENTIRE AMOUNT (nearly half a million dollars) over to the school.

The school has an endowment of over $30 billion.

This is somehow called “good financial planning.”

This!

[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.

That is what’s happening at schools that only offer need based aid. The very rich and those who are lower middle class and below. We make good money but we don’t have an extra 800k lying around to educate 2 kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No, you nailed it. It’s people who have enough money but because of other choices they made, don’t have it available for other choices they wish they could make with respect to expensive schools.

I'm a WUSTL alumna. We make $250,000 a year as a household. We do not qualify for financial aid. DCs could get into WUSTL, but there's no way we could pay cash for WUSTL. It's over $87,000 a year. I don't know what "lifestyle choices" would have allowed us to pay for three kids to go to an expensive school.

It's fine. We have excellent state school choices available to us.

Live in less house, drive older cars, take less expensive vacations…

We live on one income. My income pays tuition.

And, so, therefore...?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No, you nailed it. It’s people who have enough money but because of other choices they made, don’t have it available for other choices they wish they could make with respect to expensive schools.

I'm a WUSTL alumna. We make $250,000 a year as a household. We do not qualify for financial aid. DCs could get into WUSTL, but there's no way we could pay cash for WUSTL. It's over $87,000 a year. I don't know what "lifestyle choices" would have allowed us to pay for three kids to go to an expensive school.

It's fine. We have excellent state school choices available to us.

It's all ridonc. The schools that were safetys for most of us are no longer for this gen.

For a certain segment of the population, any financial issue is invariably a personal moral issue. (Your issue, never theirs)

It’s not that T20 schools now cost 2x the national median income just for tuition, wildly outpacing inflation. And it’s definitely not that they cost so much that even people with incomes in the top 1% have to now save huge sums for decades to afford it.

It’s your fault for not living like a monk for the last two decades and putting away any surplus money you have earned since you were an undergrad.

Your unexpected emergencies, sick parents, layoffs, companies going under, underemployment, disabled family members, the Great Recession, twins instead of a single baby, Elon’s layoffs, etc etc are all YOUR CHOICES, they don’t think there are ever any accidents, bad luck, or national economic issues.

Your lifestyle is entirely under your control, they say.

They got theirs and it must be because of their extreme virtue and brilliant choice making, which you could have easily done but stubbornly refused to.

Why should THEY care about YOUR financial problems? You’re stupid and unworthy and they are smart and deserving.

Oh but it is SO WORTH IT, half a million dollars for a Bachelors Degree, if you don’t spend it you are harming your child. You must give them the best, like we do, they say.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No, you nailed it. It’s people who have enough money but because of other choices they made, don’t have it available for other choices they wish they could make with respect to expensive schools.

I'm a WUSTL alumna. We make $250,000 a year as a household. We do not qualify for financial aid. DCs could get into WUSTL, but there's no way we could pay cash for WUSTL. It's over $87,000 a year. I don't know what "lifestyle choices" would have allowed us to pay for three kids to go to an expensive school.

It's fine. We have excellent state school choices available to us.

Live in less house, drive older cars, take less expensive vacations…

They probably do all of these things. Why is there this weird cult on this site that always repeats these same things (new cars and expensive vacations!) even though no one indicates otherwise? It’s like you read an article once about people who overspend and now just assume that anyone who raises any issue with money is therefore doing that exact thing you read about.

Most of them probably just had more kids than they could actually afford.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No, you nailed it. It’s people who have enough money but because of other choices they made, don’t have it available for other choices they wish they could make with respect to expensive schools.

I'm a WUSTL alumna. We make $250,000 a year as a household. We do not qualify for financial aid. DCs could get into WUSTL, but there's no way we could pay cash for WUSTL. It's over $87,000 a year. I don't know what "lifestyle choices" would have allowed us to pay for three kids to go to an expensive school.

It's fine. We have excellent state school choices available to us.

Live in less house, drive older cars, take less expensive vacations…

They probably do all of these things. Why is there this weird cult on this site that always repeats these same things (new cars and expensive vacations!) even though no one indicates otherwise? It’s like you read an article once about people who overspend and now just assume that anyone who raises any issue with money is therefore doing that exact thing you read about.

Most of them probably just had more kids than they could actually afford.

Who are you to say what they can afford? Maybe they still love their child and are happy for their existence even if they can only afford state school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No, you nailed it. It’s people who have enough money but because of other choices they made, don’t have it available for other choices they wish they could make with respect to expensive schools.

I'm a WUSTL alumna. We make $250,000 a year as a household. We do not qualify for financial aid. DCs could get into WUSTL, but there's no way we could pay cash for WUSTL. It's over $87,000 a year. I don't know what "lifestyle choices" would have allowed us to pay for three kids to go to an expensive school.

It's fine. We have excellent state school choices available to us.

It's all ridonc. The schools that were safetys for most of us are no longer for this gen.

For a certain segment of the population, any financial issue is invariably a personal moral issue. (Your issue, never theirs)

It’s not that T20 schools now cost 2x the national median income just for tuition, wildly outpacing inflation. And it’s definitely not that they cost so much that even people with incomes in the top 1% have to now save huge sums for decades to afford it.

It’s your fault for not living like a monk for the last two decades and putting away any surplus money you have earned since you were an undergrad.

Your unexpected emergencies, sick parents, layoffs, companies going under, underemployment, disabled family members, the Great Recession, twins instead of a single baby, Elon’s layoffs, etc etc are all YOUR CHOICES, they don’t think there are ever any accidents, bad luck, or national economic issues.

Your lifestyle is entirely under your control, they say.

They got theirs and it must be because of their extreme virtue and brilliant choice making, which you could have easily done but stubbornly refused to.

Why should THEY care about YOUR financial problems? You’re stupid and unworthy and they are smart and deserving.

Oh but it is SO WORTH IT, half a million dollars for a Bachelors Degree, if you don’t spend it you are harming your child. You must give them the best, like we do, they say.

[phone]

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No, you nailed it. It’s people who have enough money but because of other choices they made, don’t have it available for other choices they wish they could make with respect to expensive schools.

I'm a WUSTL alumna. We make $250,000 a year as a household. We do not qualify for financial aid. DCs could get into WUSTL, but there's no way we could pay cash for WUSTL. It's over $87,000 a year. I don't know what "lifestyle choices" would have allowed us to pay for three kids to go to an expensive school.

It's fine. We have excellent state school choices available to us.

It's all ridonc. The schools that were safetys for most of us are no longer for this gen.

For a certain segment of the population, any financial issue is invariably a personal moral issue. (Your issue, never theirs)

It’s not that T20 schools now cost 2x the national median income just for tuition, wildly outpacing inflation. And it’s definitely not that they cost so much that even people with incomes in the top 1% have to now save huge sums for decades to afford it.

It’s your fault for not living like a monk for the last two decades and putting away any surplus money you have earned since you were an undergrad.

Your unexpected emergencies, sick parents, layoffs, companies going under, underemployment, disabled family members, the Great Recession, twins instead of a single baby, Elon’s layoffs, etc etc are all YOUR CHOICES, they don’t think there are ever any accidents, bad luck, or national economic issues.

Your lifestyle is entirely under your control, they say.

They got theirs and it must be because of their extreme virtue and brilliant choice making, which you could have easily done but stubbornly refused to.

Why should THEY care about YOUR financial problems? You’re stupid and unworthy and they are smart and deserving.

Oh but it is SO WORTH IT, half a million dollars for a Bachelors Degree, if you don’t spend it you are harming your child. You must give them the best, like we do, they say.

So donut hole eh?

[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.

It wasn't $250 a year when my kids were born. It's $250,000 NOW. When my kids were born, we were making $105,000 a year as a family. (Nurse, public defender) DS1 had medical problems that were expensive. We funded a bunch of therapies out of pocket. We had our own student loans to pay. We bought a modest house in a good school district and sent the kids to public schools. We bought used Hondas and drove them until the wheels feel off. We elected to fully fund retirement, and that was pretty much all the savings room we had.