Why do donut hole families

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Poor people do not have more options. Most truly poor people are not in the college pipeline.

Additionally, if those "donut hole" families lived like the poor people, rented where they rent, shopped where they shop, etc., they'd have tons of options too. Just saying.

+1

I get that some have special circumstances--medical debt or something unforeseen. But most donut hole families that I know made choices to spend elsewhere. New iPhone every year, 2 Starbucks trips per day, eating lunch out daily, eating half of dinners out, taking really nice vacations, new cars every 3-4 years, etc. Yes those are all "small things" in the grand scheme of savings, but that is just what is visible to me---I'm sure there is much more I don't even see. Someone with a mindset like that is choosing to spend on things when they could choose to save.
We knew our kids would get no aid, so we started saving as soon as they were born. We didn't start living a luxury lifestyle until we could afford it. We paid only 50% of what we could easily afford for our first house and lived there for 7 years. Sure we could afford a newer/nicer home, but we did not need it, this house had 4 bedrooms and 2.5 baths so enough space for a young family---it was relatively speaking much nicer than the apartment we came from. So we lived nicely but not luxuriously and saved the extras. We drove cars for 8-10 years and saved to pay cash for the next ones.
We also choose to not have kids until 30, so that allowed us to consciously save the extra salary and live off of basically one. We aggressively paid off all student loans, invested in our retirement. Other than our honeymoon, I was 35 before I took a "fancy vacation", yet we could have easily afforded to do so at 25/26. But that restraint allowed us to front load saving for college and then we could change our lifestyle as desired.

Welcome to America, where saving and careful planning are punished and vilified as "privilege."

[Anonymous]

Anonymous wrote:I never complain about it. But if I ever mention that we're not willing to pay higher than in-state prices, I get attacked for that position.

Well you should ignore those attacking. As long as you don't say "we are only willing to pay FOR in-state college" there is no issue---since there are plenty of private schools that can be as affordable with good merit. Smart to give your kids the privilege of college without debt. No college is worth the debt---we happily pay $80K for our kids, but it is saved in a 529 and we did not struggle to do so. But if we didn't have it saved and/or couldn't cash flow it, we would set the price limit and encourage our kids to attend somewhere with minimal to no debt.

[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.

This. My college was expensive at about $100K for 4 years. To send my kid there now, it's $400K.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Some families who seem to complain about this are people who had a fancy education but chose not to take a private sector job in DC for the fed/non-profit lifestyle and are now aggrieved that schools won't make up the difference for them because they want to l live an UMC lifestyle they assume their education entitles them to - this comes up in the college and private school threads. We make trade offs in our lives only each family can figure out what works for them - there is alot of merit aid sloshing around for high performing students just a few rungs down the ladder - no one is entitled to go to any school they want.

So true. I’ve noticed that the majority of the time, those who complain went to fancy schools themselves. As someone who went to Big State U I find it so confusing—the school I graduated from costs under $10k/yr in-state still. Not exactly crisis levels.

+1. We paid more than that per year for daycare.

[Anonymous]

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

But that's what they are annoyed about. They want to live like the "rich". They are so obsessed with "rankings" and how it's unfair, when in reality majority of their kids are not getting into a T20 because there are only so many slots (admission rates are single digits for most, so the majority are not getting accepted).
It is about choices and most donut hole families could have made different choices if they truly wanted $320K in a 529 freshman year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Some families who seem to complain about this are people who had a fancy education but chose not to take a private sector job in DC for the fed/non-profit lifestyle and are now aggrieved that schools won't make up the difference for them because they want to l live an UMC lifestyle they assume their education entitles them to - this comes up in the college and private school threads. We make trade offs in our lives only each family can figure out what works for them - there is alot of merit aid sloshing around for high performing students just a few rungs down the ladder - no one is entitled to go to any school they want.

So true. I’ve noticed that the majority of the time, those who complain went to fancy schools themselves. As someone who went to Big State U I find it so confusing—the school I graduated from costs under $10k/yr in-state still. Not exactly crisis levels.

I think it’s the opposite.

I think it’s Big U graduates with normal but not great jobs.

Now their kids with 3.8 HPA’s are getting denied and they get into Top 50 schools with no FA.

[Anonymous]

GPA

[Anonymous]

Anonymous wrote:

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

That's not true. College costs have increased so much families can't hope to deny themselves every luxury to meet that cost. We're fortunate that we can afford any college, but most people can't, even if they tighten their belt.

Please don't be so ignorant and smug.

But they can afford MOST colleges. So instead of complaining they can't afford the most expensive ones, they should focus on the hundreds of great colleges they can afford and recognized how privileged that is.

I can't afford a $100K car, so I don't complain about it, I don't buy it, I find a Honda/Toyota for $25-30K that is a great car and buy it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

That's not true. College costs have increased so much families can't hope to deny themselves every luxury to meet that cost. We're fortunate that we can afford any college, but most people can't, even if they tighten their belt.

Please don't be so ignorant and smug.

But they can afford MOST colleges. So instead of complaining they can't afford the most expensive ones, they should focus on the hundreds of great colleges they can afford and recognized how privileged that is.

I can't afford a $100K car, so I don't complain about it, I don't buy it, I find a Honda/Toyota for $25-30K that is a great car and buy it.

Which is why kids are going to SEC schools

[Anonymous]

Anonymous wrote:

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

I'm sorry but this statement is out of touch (and I'm not donut hole). How can you lump everyone (people you do not know) into a category that assumes they recklessly indulged. Sure, there are people like this - but to assume anyone without resources to pay for college is in this category is ludicrous. Most of this country cannot afford to pay for private universities without taking out loans.

This the way it has always been. Now people think they are entitled to it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Some families who seem to complain about this are people who had a fancy education but chose not to take a private sector job in DC for the fed/non-profit lifestyle and are now aggrieved that schools won't make up the difference for them because they want to l live an UMC lifestyle they assume their education entitles them to - this comes up in the college and private school threads. We make trade offs in our lives only each family can figure out what works for them - there is alot of merit aid sloshing around for high performing students just a few rungs down the ladder - no one is entitled to go to any school they want.

So true. I’ve noticed that the majority of the time, those who complain went to fancy schools themselves. As someone who went to Big State U I find it so confusing—the school I graduated from costs under $10k/yr in-state still. Not exactly crisis levels.

I think it’s the opposite.

I think it’s Big U graduates with normal but not great jobs.

Now their kids with 3.8 HPA’s are getting denied and they get into Top 50 schools with no FA.

What do you think a “normal but not great” job pays?

[Anonymous]

Anonymous wrote:

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

I actually agree with you. So background, we have $250k HHI, $3M investment portfolio, house paid off.

Yeah, we can afford any college. Probably. For three kids though??

And is private or out of state worth it? No, I don't think so.

If we made $600k, that would be a different story. If we had $6M in stocks instead of $3M, that would also be different.

So I think we've made decent choices along the way about cars and houses and whatnot. But I consider us donut hole because we're too wealthy for financial aid, but not wealthy enough for a $350k undergraduate degree to be a drop in the bucket.

Once again, it's about choices. You choose to have 3 kids. We looked at the full cost of raising kids when we decided to stop at 2, with college costs being a huge reason. Our kids are 4 years apart, so only 1 would likely be in college at the same time.

If you truly want your kid to attend a T20, you have the money and could redirect it that way. I agree---I would not spend that much in your financial situation. I'd have the kid go instate or search out private schools that offer merit (you can find this in the 30-100 rankings, if you search). You have decided that ~$40-50K/instate costs is what you are willing to spend, and that is OKAY (and a smart choice). You choose to have 3 kids, so you are looking at $600K all in for in-state---if you only had 2 kids, you might choose to spend the same $600K and send them to $80K schools.
But in grand scheme, you and your kids are extremely privileged. You are in the top 1-2%.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

I'm sorry but this statement is out of touch (and I'm not donut hole). How can you lump everyone (people you do not know) into a category that assumes they recklessly indulged. Sure, there are people like this - but to assume anyone without resources to pay for college is in this category is ludicrous. Most of this country cannot afford to pay for private universities without taking out loans.

This the way it has always been. Now people think they are entitled to it.

This! My parents couldn’t afford a T50 private school when I graduated HS in 2005. I also didn’t get anywhere approaching a full ride anywhere. So I went to a state school. So freaking what??

[Anonymous]

Anonymous wrote:


If we earn 225k in NYC, do you really think that we can save enough for private college by skipping luxury cars? We don't even have a frigging car! Maybe if we lived in Nebraska.

Anonymous wrote:

Anonymous wrote:The donut hole is a myth that poor savers tell themselves. Decisions have consequences. Buying a larger house or nicer car - spending more for vacations and fancy summer camps are all decisions.

College costs are not unexpected. You have nearly two decades to save.

Plus, you don’t have to save for the most expensive college. All of you who consider yourselves middle class- that means kids stay at home and go to college or they go to an instate college. That is what middle class parents have done for generations. Paying the full amount for high end tuitions for private schools are for rich families not yours.

That's not true. College costs have increased so much families can't hope to deny themselves every luxury to meet that cost. We're fortunate that we can afford any college, but most people can't, even if they tighten their belt.

Please don't be so ignorant and smug.

Once again, you choose to live in NYC. I know it's expensive and $225K isn't much there. But that is a choice you make. You could job search and move to somewhere with a lower COL (literally anywhere except SF/Boston would be less)

[Anonymous]

Anonymous wrote:

Anonymous wrote:Some families who seem to complain about this are people who had a fancy education but chose not to take a private sector job in DC for the fed/non-profit lifestyle and are now aggrieved that schools won't make up the difference for them because they want to l live an UMC lifestyle they assume their education entitles them to - this comes up in the college and private school threads. We make trade offs in our lives only each family can figure out what works for them - there is alot of merit aid sloshing around for high performing students just a few rungs down the ladder - no one is entitled to go to any school they want.

So true. I’ve noticed that the majority of the time, those who complain went to fancy schools themselves. As someone who went to Big State U I find it so confusing—the school I graduated from costs under $10k/yr in-state still. Not exactly crisis levels.

Big state U in Virginia is 40k a year.