Why do donut hole families

[Anonymous]

Anonymous wrote:

Anonymous wrote:I find it interesting that families who save no money and benefit from need based full rides and families with too much money to even worry about college cost, have the guts to judge families who work, save, pay and struggle for everything in their lives.

I’ve even started to tune out the choices people because it’s gotten ridiculous. At this point you can say anything is a choice I mean buying food to eat is a choice, that money could have been used for college.

I fully recognize that my kids will not be able to attend the same college that I was able to attend on heavy financial aid. So I don’t begrudge the need based full ride because that was me and I believe the top schools can make a difference in outcomes for economically disadvantaged students more than for middle and upper class students. I do find the judgement interesting when I feel like “ there but for the grace of God go I” as far as financial situations not being set and having many journeys for why people are where they are and not all being within their control.

DCUm is the worst when it comes to owning up to the fact that success is so much more than just work ethic and making the right choices. Be it parenting, money, marriage, whatever. There is so much judgement everywhere. I just ignore these people because a) I think a lot of them are anxious and can't bear the possibility that they are less in control of their lives than they think and b) there is limited self-awareness and trying to point out different perspectives is pointless.

[Anonymous]

So we are a donut hole family and are saving in our kids 529s. My fear is that the economy will completely tank and my kids will be SOL. What is going to happen to parents who did their due diligence with saving if the Stock Market crashes?

[Anonymous]

Anonymous wrote:So we are a donut hole family and are saving in our kids 529s. My fear is that the economy will completely tank and my kids will be SOL. What is going to happen to parents who did their due diligence with saving if the Stock Market crashes?

The way our 529 is set up, and I think this is standard, is that the investments become less and less risky as you get closer to the year the child graduates. So if the stock market tanks and your kid has almost graduated, you’re fine because it’s invested in less risky things. If your kid is very young, you have many years for it to build back up again.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I find it interesting that families who save no money and benefit from need based full rides and families with too much money to even worry about college cost, have the guts to judge families who work, save, pay and struggle for everything in their lives.

I’ve even started to tune out the choices people because it’s gotten ridiculous. At this point you can say anything is a choice I mean buying food to eat is a choice, that money could have been used for college.

I fully recognize that my kids will not be able to attend the same college that I was able to attend on heavy financial aid. So I don’t begrudge the need based full ride because that was me and I believe the top schools can make a difference in outcomes for economically disadvantaged students more than for middle and upper class students. I do find the judgement interesting when I feel like “ there but for the grace of God go I” as far as financial situations not being set and having many journeys for why people are where they are and not all being within their control.

DCUm is the worst when it comes to owning up to the fact that success is so much more than just work ethic and making the right choices. Be it parenting, money, marriage, whatever. There is so much judgement everywhere. I just ignore these people because a) I think a lot of them are anxious and can't bear the possibility that they are less in control of their lives than they think and b) there is limited self-awareness and trying to point out different perspectives is pointless.

+1.

[Anonymous]

Anonymous wrote:

Anonymous wrote:So we are a donut hole family and are saving in our kids 529s. My fear is that the economy will completely tank and my kids will be SOL. What is going to happen to parents who did their due diligence with saving if the Stock Market crashes?

The way our 529 is set up, and I think this is standard, is that the investments become less and less risky as you get closer to the year the child graduates. So if the stock market tanks and your kid has almost graduated, you’re fine because it’s invested in less risky things. If your kid is very young, you have many years for it to build back up again.

It's not standard, unless you are in a "time based" 529. But anyone can google and figure out finance 101 and know that ~4-5 years before your kid starts college you need to start moving a portion into more secure investments (bonds/cash/MM) in case the stock market crashes. But keep in mind that you have more than 4 years before you need all the money, so adjust your 529 accordingly

[Anonymous]

Anonymous wrote:So we are a donut hole family and are saving in our kids 529s. My fear is that the economy will completely tank and my kids will be SOL. What is going to happen to parents who did their due diligence with saving if the Stock Market crashes?

This is my fear which is why we also did a prepaid and got our lower cost house paid off before our kids will start college.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I find it interesting that families who save no money and benefit from need based full rides and families with too much money to even worry about college cost, have the guts to judge families who work, save, pay and struggle for everything in their lives.

I’ve even started to tune out the choices people because it’s gotten ridiculous. At this point you can say anything is a choice I mean buying food to eat is a choice, that money could have been used for college.

I fully recognize that my kids will not be able to attend the same college that I was able to attend on heavy financial aid. So I don’t begrudge the need based full ride because that was me and I believe the top schools can make a difference in outcomes for economically disadvantaged students more than for middle and upper class students. I do find the judgement interesting when I feel like “ there but for the grace of God go I” as far as financial situations not being set and having many journeys for why people are where they are and not all being within their control.

DCUm is the worst when it comes to owning up to the fact that success is so much more than just work ethic and making the right choices. Be it parenting, money, marriage, whatever. There is so much judgement everywhere. I just ignore these people because a) I think a lot of them are anxious and can't bear the possibility that they are less in control of their lives than they think and b) there is limited self-awareness and trying to point out different perspectives is pointless.

But this isn't really about not having money. No one is arguing against giving aid to needy families. It's about having money, but not so much that you can afford any school your kid can get into, and being mad schools won't make up the difference.

My eldest kid is only 10. I don't know for sure what will happen between then and now. But I know whatever happens, we will match our budget with the kids' options, and not whine about it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:So we are a donut hole family and are saving in our kids 529s. My fear is that the economy will completely tank and my kids will be SOL. What is going to happen to parents who did their due diligence with saving if the Stock Market crashes?

This is my fear which is why we also did a prepaid and got our lower cost house paid off before our kids will start college.

My fear, too. I can only afford to send my kid to college if the market doesn't tank. I've saved diligently in a 529 plan; however, if stocks and bands tank and inflation is extreme, I'm screwed. I can't afford to cash flow.

[Anonymous]

Anonymous wrote:A lot of us got into the financial position to be in the donut hole by doing "everything right" being top students all through school, getting into a highly selective college, graduating, working for years to move up the corporate ladder, saving for college every month since our kids got out of daycare, provide the enrichment/tutoring/house in a top school district that allowed our kids to do well enough to get into a top college. But now we can't afford to send them to the top college on the level that we attended.

I know, cry me a river. It's such a deeply privileged sob story.

Yeah, I had a guy complaining about how him and his wife have $400k in student loans the other day that he's worried about paying back. His wife is a general doctor and he's a teacher. The debt is shared 50-50. I do think the real "crime" here is allowing someone to take out so much debt to get a PhD in education. It's like a mortgage company giving someone a $850k loan for a home that is only worth $550k market value. It just doesn't make sense...

However, the guy told me this story right after noting that he went to the SuperBowl in Scottsdale this year and sat in the lower section (probably $10-20k for the pair of tickets).

I have no sympathy if he has to skip a few super bowl games. A lot of student loan debt is tied to lifestyle choices made in college.

[Anonymous]

Anonymous wrote:

Anonymous wrote:A lot of us got into the financial position to be in the donut hole by doing "everything right" being top students all through school, getting into a highly selective college, graduating, working for years to move up the corporate ladder, saving for college every month since our kids got out of daycare, provide the enrichment/tutoring/house in a top school district that allowed our kids to do well enough to get into a top college. But now we can't afford to send them to the top college on the level that we attended.

I know, cry me a river. It's such a deeply privileged sob story.

Yeah, I had a guy complaining about how him and his wife have $400k in student loans the other day that he's worried about paying back. His wife is a general doctor and he's a teacher. The debt is shared 50-50. I do think the real "crime" here is allowing someone to take out so much debt to get a PhD in education. It's like a mortgage company giving someone a $850k loan for a home that is only worth $550k market value. It just doesn't make sense...

However, the guy told me this story right after noting that he went to the SuperBowl in Scottsdale this year and sat in the lower section (probably $10-20k for the pair of tickets).

I have no sympathy if he has to skip a few super bowl games. A lot of student loan debt is tied to lifestyle choices made in college.

That guy is an idiot PP. only a financially irresponsible moron takes out 200k for an education PHD, a field where at best he is earning 150 at the Top of his career. And he’s an even bigger loser for blowing a wad of money on the superbowl instead of paying down his debt. I just don’t feel bad for people like that