If college is so expensive ... why don't more families get need-based aid?

[Anonymous]

Anonymous wrote:

Anonymous wrote:At Harvard: 55% of our undergraduates receive need-based Harvard scholarships.

Are people taking out massive loans or is everyone just actually RICH?

Those at Harvard who don't get Need based scholarships are typically making more than $200-250K/year. So yes, if you make more than $250K, it is not unreasonable to assume that you could/should have saved for college.

THe T50 schools/ones that cost $75-90K+/year typically are filled with kids whose parents make $200K+, at least 40-50% of the student families fall into that at most. It's been that way for decades.

And yes, if you make $250K+, it is reasonable to assume you can save for college. You may not choose to save for $90K costs, but certainly for in-state ($30K now).

250k a year pre tax with a family is not that easy to save $400k per kid. It’s just not. The end result is these families of mid level professionals or civil servants don’t get to go to private college. The poor kids do alongside the hedge fund kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:At Harvard: 55% of our undergraduates receive need-based Harvard scholarships.

Are people taking out massive loans or is everyone just actually RICH?

Many of the ivies give full aid to families who make up to 175k per year and some need based aid up to around 250k Household income. Full pay is for everyone 250k and above. We only started making 300k a few years ago and made less than 100k when our second kid born. Yet we are fullpay for one at an ivy and about to have a second in college, probably will also be elite and 87k. All with a 4300 per month mortgage in the DMV, and we did parochial school then magnet public for free. We do consider ourselves quite rich! We just dont spend it, we save it and live off less.
It is not that hard for over 250k to find a way, without loans, as long as they planned early and saved even 3-5k a year early on. That’s a small vacation or a less expensive car or no $16 lunch&tip 5 days a week at work when you can pack leftovers or a sandwich for $1 a day

I brown bag my lunch every day. $1 will get you 2 slices of bread and half an apple or a cup of yogurt. You are really eating light.

You are missing the point! Lunch out with people from work is $18-20+/day. Most can Bring something from home for $2-3 (the exact amount isn't the point). Add in the coffee many go grab in morning with people at work (so another $5-7 per day) and it adds up. For things that you do not need to do all the time---those two things alone can save $20/day or $100/week or $400/month (maybe $300/350 so you allow yourself to go to lunch with colleagues or grab a coffee once in a while). But fact is most people dont' realize where they are "wasting" money

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have always had two working parents and had a household income on $350,000 when our kids started college. We are full pay. And not whining— it’s a nice income. Although a SFH house in Fairfax County in a decent school district (decent— not the best) is now $1 million. So, expenses add up fast here.

And I agree— you should start saving for college at birth. And if you and your spouse make $350,000 at birth and have no extra expenses or decrease in income for 18 years, you should have a 529 funded for Harvard. But usually, that’s not how life happens.

We had about $250k per kid in their 529s when they hit college. Enough for a Midwestern LAC with merit and WM, both with no loans. WM kid will have about $50k left over for grad school.

Why not the $400k they would need to full pay? Because people looking at a $350k income seem to assume we had an $350,000 income and $0 in extra expenses from the day Kid 1 was born until we filed the FAFSA 18 years later. And that was not remotely true.

To start with, we had kids relatively young, and we didn’t always make $350,000. It was closer to/ slightly below $200k the kids were born. Now subtract $1500-1800 a kid a month for childcare (at the time) for the first 5 years.

Just as we were getting ready to stop needing FT childcare for kid1, we bought into a decent school district just before (like 3 months before) the housing bubble burst, the recession happened- and we went from having plenty of equity to being underwater on our mortgage. It took us 10 years to regain our housing value and get back to square 1. At the same time, one parent lost their job. And we couldn’t move for a job, because underwater on the mortgage. That parent found a new job relatively fast, but took a big pay cut. Lots of people hit by the recession now have kids entering or in college.


A year later, the other parent had a huge health event and was out of work for 18 months, most of the time in treatment. And the rest of the time was was too sick/ occupied with treatment to reliably care for the kids and save that money.

Meanwhile, even when school started, the childcare expenses didn’t just go away. From K-6, we were paying for before and after care so that we could both work. Not cheap for two kids, even if it’s just SACC. And summer care was just ungodly expensive. Plus, care on all the random days school was closed for TWDs, 1/2 day Mondays (still a thing in FCPS at the time), snow days, rain days, cold days. And FCPS just hates to operate for a full uninterrupted week days.

So, our salaries were not at $350k for most of the years we saved. And many years, we saved very little because childcare was bleeding us dry— and high quality childcare was not a place we were willing to scrimp. And those were also the years where compounded interest could have worked its magic.

That’s reality for many two income families. Add on for us the recession happened and we bought at a house at the worst possible time, that we we had a job loss and pay cut and had one parent who was very sick (but thankfully now has a clean bill of health), but was out of work for a significant period of time.

So when people say— just start saving when the baby is born, I agree on principle. But people (and Harvard) make a lot of assumptions about a family’s ability to save when their kid was 4 based on what the family finances look like when the kid is 18. And FAFSA doesn’t really capture childcare expenses, serious illness in the family, recession eating away $200,000 in equity overnight, job loss, etc— especially when those things happened. when a kid is in ES or younger. But those things prevent savings at a point when savings can be most valuable if you invest right because of compounded interest.

I’m glad we both worked, especially since one of us was unemployed for a period of time and one of us was too sick to work for a longer period of time. When we only had one adult who could work, I was grateful we had two adults with active careers that carried benefits. But realistically, my salary covered childcare for several years and that’s about it. We sucked it up to keep me in the workforce. But financially, we might have been in a better position for college if I had just never worked at all, rather than working to pay for childcare, and then ultimately having that income counted against us on the FAFSA.

You are a bit tone death when you are living in a million dollar house and don't realize some of it is lifestyle choices. Many of us have the same health issues, child care, helping family/caring for elderly family, special needs kids.

Yes and many have the same issues, but chose to live on only one salary, so when both are working they are saving a lot more. And if one isn't working, the budget is still met, savings are not burned thru due to a job loss

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:At Harvard: 55% of our undergraduates receive need-based Harvard scholarships.

Are people taking out massive loans or is everyone just actually RICH?

Those at Harvard who don't get Need based scholarships are typically making more than $200-250K/year. So yes, if you make more than $250K, it is not unreasonable to assume that you could/should have saved for college.

THe T50 schools/ones that cost $75-90K+/year typically are filled with kids whose parents make $200K+, at least 40-50% of the student families fall into that at most. It's been that way for decades.

And yes, if you make $250K+, it is reasonable to assume you can save for college. You may not choose to save for $90K costs, but certainly for in-state ($30K now).

250k a year pre tax with a family is not that easy to save $400k per kid. It’s just not. The end result is these families of mid level professionals or civil servants don’t get to go to private college. The poor kids do alongside the hedge fund kids.

+1

This was not the case decades ago, but it is now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:At Harvard: 55% of our undergraduates receive need-based Harvard scholarships.

Are people taking out massive loans or is everyone just actually RICH?

Many of the ivies give full aid to families who make up to 175k per year and some need based aid up to around 250k Household income. Full pay is for everyone 250k and above. We only started making 300k a few years ago and made less than 100k when our second kid born. Yet we are fullpay for one at an ivy and about to have a second in college, probably will also be elite and 87k. All with a 4300 per month mortgage in the DMV, and we did parochial school then magnet public for free. We do consider ourselves quite rich! We just dont spend it, we save it and live off less.
It is not that hard for over 250k to find a way, without loans, as long as they planned early and saved even 3-5k a year early on. That’s a small vacation or a less expensive car or no $16 lunch&tip 5 days a week at work when you can pack leftovers or a sandwich for $1 a day

I brown bag my lunch every day. $1 will get you 2 slices of bread and half an apple or a cup of yogurt. You are really eating light.

There comments are silly when their mortgage is $4300. That's a huge mortgage. And private school. Our mortgage was less than half that. I cannot even imagine a mortgage that high.

the 4300 mortgage poster was not complaining about the price or affordability of college, they were saying it is affordable for them despite high mortgage. everyone makes choices. cutting lunch spending is one choice to have an extra couple of thousand a year over 18 yrs to put into savings. buying a cheap used toyota for 25k instead of a new one for 45k or a nicer new car for 65k is another choice. some make enough &picked the big house and private school yet save in other ways to make college work. personally we did cheap cars, used them for 12+ years each, in order to pay for the fancy K-12 private which was much better than the district public. paying for an elite college after private school meant we just had to "find" 50k extra a year, a lot of which was already in the 529. the private tuition made us figure out how to live cheaply a long time ago

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:At Harvard: 55% of our undergraduates receive need-based Harvard scholarships.

Are people taking out massive loans or is everyone just actually RICH?

Those at Harvard who don't get Need based scholarships are typically making more than $200-250K/year. So yes, if you make more than $250K, it is not unreasonable to assume that you could/should have saved for college.

THe T50 schools/ones that cost $75-90K+/year typically are filled with kids whose parents make $200K+, at least 40-50% of the student families fall into that at most. It's been that way for decades.

And yes, if you make $250K+, it is reasonable to assume you can save for college. You may not choose to save for $90K costs, but certainly for in-state ($30K now).

250k a year pre tax with a family is not that easy to save $400k per kid. It’s just not. The end result is these families of mid level professionals or civil servants don’t get to go to private college. The poor kids do alongside the hedge fund kids.

+1

This was not the case decades ago, but it is now.

Then how have so many of us done it? Thread after thread like this on Dcum, examples of people in the DMV, making 200-250k, some with huge expenses (health or big mortgage or chose private school) and still manage to afford private colleges without loans. There was one recently who was cashflowing the entire 88k on that salary because of reasons they could not save earlier or something. 250k pretax is plenty. You are not poor you are wealthy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We do okay (at around $200K HHI until a 50% jump three years ago) but are not RICH.

We planned. Used the Vanguard college calculator and saved $400-$600 per month in the 529 since birth.

Limited vacations. Public school. Not a lot of meals out. DIY home improvements. No family support.

Both children will graduate with no student loans.

That's wonderful, but isn't it crazy that we have created a system where college without loans even for the well to do requires 22 years of significant monthly savings to pay for 4 years of education.

That is why there is a public school system as an alternative. Private education at "Elite" schools is a luxury good, not a basic need.

How many elite schools do you think would agree with you that they are nothing but frivolous luxury brands?

Not agreeing with me doesn't change reality. And, they know exactly what they are because they have no interest in reducing the scarcity of their product. While it might be challenging in some cases all of the "elite" schools could scale up, but they choose not too because Harvard isn't Harvard at the scale of UMich.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:At Harvard: 55% of our undergraduates receive need-based Harvard scholarships.

Are people taking out massive loans or is everyone just actually RICH?

Those at Harvard who don't get Need based scholarships are typically making more than $200-250K/year. So yes, if you make more than $250K, it is not unreasonable to assume that you could/should have saved for college.

THe T50 schools/ones that cost $75-90K+/year typically are filled with kids whose parents make $200K+, at least 40-50% of the student families fall into that at most. It's been that way for decades.

And yes, if you make $250K+, it is reasonable to assume you can save for college. You may not choose to save for $90K costs, but certainly for in-state ($30K now).

250k a year pre tax with a family is not that easy to save $400k per kid. It’s just not. The end result is these families of mid level professionals or civil servants don’t get to go to private college. The poor kids do alongside the hedge fund kids.

Also, I didn't make $250K until 1 year before my kids went to college.

So it's not like we were making $250K for 20 years.

[Anonymous]

Current need based aid models work great under the assumption that you’ve always made a great income. It collapses for families who just recently have high six-figure incomes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We do okay (at around $200K HHI until a 50% jump three years ago) but are not RICH.

We planned. Used the Vanguard college calculator and saved $400-$600 per month in the 529 since birth.

Limited vacations. Public school. Not a lot of meals out. DIY home improvements. No family support.

Both children will graduate with no student loans.

That's wonderful, but isn't it crazy that we have created a system where college without loans even for the well to do requires 22 years of significant monthly savings to pay for 4 years of education.

That is why there is a public school system as an alternative. Private education at "Elite" schools is a luxury good, not a basic need.

How many elite schools do you think would agree with you that they are nothing but frivolous luxury brands?

Not agreeing with me doesn't change reality. And, they know exactly what they are because they have no interest in reducing the scarcity of their product. While it might be challenging in some cases all of the "elite" schools could scale up, but they choose not too because Harvard isn't Harvard at the scale of UMich.

If the ivies/elites scaled up, opened more seats, they would not be able to provide what they do best: small classes, professor to student ratio that allows every student who wants to be able to get involved in research (humanities profs do research too, thus this is not merely a stem-kid need), and funds funds funds to provide many paid opportunities for the students, as well as multiple advisors at all levels which is quite helpful for grad/prof apps. I have had one at an ivy and one at a T30 state school: it is night and day as far as opportunities and education.
In that sense ivies are most definitely a "luxury" good: however it is one that is easier to attain if you are Questbridge level poor(admissions much easier through QB) all the way up into the 200s-k income range (ivies give need aid to a much larger range of incomes, and they give better need-aid to the 100-200k range than private schools in the T20-40)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We do okay (at around $200K HHI until a 50% jump three years ago) but are not RICH.

We planned. Used the Vanguard college calculator and saved $400-$600 per month in the 529 since birth.

Limited vacations. Public school. Not a lot of meals out. DIY home improvements. No family support.

Both children will graduate with no student loans.

That's wonderful, but isn't it crazy that we have created a system where college without loans even for the well to do requires 22 years of significant monthly savings to pay for 4 years of education.

That is why there is a public school system as an alternative. Private education at "Elite" schools is a luxury good, not a basic need.

How many elite schools do you think would agree with you that they are nothing but frivolous luxury brands?

Not agreeing with me doesn't change reality. And, they know exactly what they are because they have no interest in reducing the scarcity of their product. While it might be challenging in some cases all of the "elite" schools could scale up, but they choose not too because Harvard isn't Harvard at the scale of UMich.

Oh, I absolutely agree with you that elite schools are more about the exclusive brand than anything related to education! And I agree that the schools themselves behave as if they understand this. I just doubt any of them would admit it. Part of being a luxury school is obscuring the fact that you’re more a luxury product than a school. Otherwise the virtuous frugal folks on this thread who won’t buy luxury-brand cars or vacations would also decline to buy luxury-brand diplomas.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We do okay (at around $200K HHI until a 50% jump three years ago) but are not RICH.

We planned. Used the Vanguard college calculator and saved $400-$600 per month in the 529 since birth.

Limited vacations. Public school. Not a lot of meals out. DIY home improvements. No family support.

Both children will graduate with no student loans.

That's wonderful, but isn't it crazy that we have created a system where college without loans even for the well to do requires 22 years of significant monthly savings to pay for 4 years of education.

That is why there is a public school system as an alternative. Private education at "Elite" schools is a luxury good, not a basic need.

How many elite schools do you think would agree with you that they are nothing but frivolous luxury brands?

Well the schools wont' agree, but look at the world around you. Look at your job and the companies you have worked for. You are most likely surrounded by people (in your same position, and in the management levels above you, possibly even into the C suites) that attended State University and schools ranked lower than 100. Good chance you have never heard of some of the schools they people attend. Yet they are paid the same as you, might even be your manager or a few levels up. What you accomplish in life is due to what you put into it, not where you attend college. Once you realize that you will be happier and likely "wealthier"

Sounds like a T150 state school grad basic misunderstanding of statistics.

Median Ivy salary is about $50k/yr more than median non Ivy, across whole career.

https://www.dcurbanmom.com/jforum/posts/quote/30/29191582.page

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:At Harvard: 55% of our undergraduates receive need-based Harvard scholarships.

Are people taking out massive loans or is everyone just actually RICH?

Those at Harvard who don't get Need based scholarships are typically making more than $200-250K/year. So yes, if you make more than $250K, it is not unreasonable to assume that you could/should have saved for college.

THe T50 schools/ones that cost $75-90K+/year typically are filled with kids whose parents make $200K+, at least 40-50% of the student families fall into that at most. It's been that way for decades.

And yes, if you make $250K+, it is reasonable to assume you can save for college. You may not choose to save for $90K costs, but certainly for in-state ($30K now).

250k a year pre tax with a family is not that easy to save $400k per kid. It’s just not. The end result is these families of mid level professionals or civil servants don’t get to go to private college. The poor kids do alongside the hedge fund kids.

Also, I didn't make $250K until 1 year before my kids went to college.

So it's not like we were making $250K for 20 years.

Ok fair, but what did you make just before that? 180k for 5 years before you made 250k? Whatever it was you should have stayed on that budget. You knew college was coming, stay on the 180k budget and sock the rest away. Even if you only managed to save 25k per year that would be 125k which would mean you would have 32k for each year of college, plus tighten the budget and save more from the new-250k and you should easily find another 40k per year...

[Anonymous]

Anonymous wrote:Current need based aid models work great under the assumption that you’ve always made a great income. It collapses for families who just recently have high six-figure incomes.

That’s why assets are considered to. Where they break down is if you spend obscene amounts of money you can get the same aid as someone who doesn’t but earns less, or more aid than someone who earns the same but doesn’t spend excessively. They do this because do not want the boring upper middle class. They want the wealthiest plus some charity cases for optics.

[Anonymous]

Anonymous wrote:We do okay (at around $200K HHI until a 50% jump three years ago) but are not RICH.

We planned. Used the Vanguard college calculator and saved $400-$600 per month in the 529 since birth.

Limited vacations. Public school. Not a lot of meals out. DIY home improvements. No family support.

Both children will graduate with no student loans.

You could do none of that scrimping and it would still work because you got the 50% jump in HHI!