How do most middle to UMC families pay for college?

[Anonymous]

You are asking the million dollar question Op.

It's been discussed ad naseum here, podcasts, articles, and at dinner tables between parents all over the country.

Having said that, we are that donut hole family. No financial aid offered, but fronting 40K for college (instate) is tough despite years of savings and kiving below our means.
,My oldest kid's 529 barely covers the 1st year. Thinking of a federal loan for years 2-4.
My other kids' 529 might cover a bit more when their time comes.

Yes, it keeps me up at night....and did I mention both of our cars need $XXX.00 in repairs soon, just had a major appliance break, and a host of other stupid costly things keep eating away.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have a student loan debt crisis and you want more student loans? More student loans means more fund availability and hence more demand and higher tuition costs. We have students graduating college who cant find a job because the job market is oversaturated with college educated grads. We need to rethink our post secondary education system as it currently stands if anything.

Im probably one of the few on this board without a fully funded 529. Im going to resort to a combination of 529, cash flow, scholarships, parent plus loans, public in-state schools, and as a last resort student loans. I dont want my kids in massive debt starting their careers. I kinda hope a new more sustainable pathway opens up.

Colleges need to reduce tuition. It is absurd.

I have 3 good options in our state for "all in under $25-30K". And plenty of private schools where merit flows well. You pick one of those if finances matter to your family

This. Some people have the mindset that if the school their kid wants to attend is $90k+ for the total cost of attendance, and they don't get any aid, that COLLEGE IS UNAFFORDABLE. That's just not the case.

[Anonymous]

Kids can work!

All the posters who are saying proudly that they’ve been saving their whole lives are fine, but kids can also work to help pay for their
Education. A little skin in the game is a good thing! And a low interest federal loan is not a bad thing.

[Anonymous]

Parents can work too. Get a second job Dad, stop drinking beer and watching TV.

[Anonymous]

100k in student loans for graduate school can still be pretty crippling. If you have to borrow over $200k for law school, you might want to think about mitigation strategies. This limit isn’t exactly nothing.

[Anonymous]

Anonymous wrote:Kids can work!

All the posters who are saying proudly that they’ve been saving their whole lives are fine, but kids can also work to help pay for their
Education. A little skin in the game is a good thing! And a low interest federal loan is not a bad thing.

Work study at most colleges is minimum wage or close to it.

Don't get me wrong, every dollar counts, but thinking a low paying job 15grs/week isn't going to pay off $40k in tuition that year.

You still have to take out a loan.

[Anonymous]

Anonymous wrote:I for the life of me do not understand how this country let college cost be determined by parent income. Middle class and UMC are in no more financial position to pay for college than those making 50-60k a year, unless those MC and UMC forewent houses, cars, etc. - which would undermine a large portion of the economy. The fact that the equity in my home is considered accessible to pay for college is ludicrous. The whole system is broken, very broken.

This is ludicrous, as it relates to UMC families. We are UMC, and have saved more than $300k in various 529s for our rising senior's college tuition and other college expenses. That's sufficient, when including available cashflow, for one kid to attend a private college, or two to attend state schools. And that was not, by any means, the limit to what we could have saved; we stopped dedicated college savings a few years ago and redirected to a taxable account, to provide more flexibility.

It requires planning, and dedication to savings, but UMC families can (and should, in my view) absolutely pay for their children's college. Or are you one of those people who whines that you shoudl get financial aid on your $350k income because you have overspent for decades?

Also, please tell us why why home equity shouldn't be included in financial aid calculations, and if it isn't, how abuses can be curtailed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I for the life of me do not understand how this country let college cost be determined by parent income. Middle class and UMC are in no more financial position to pay for college than those making 50-60k a year, unless those MC and UMC forewent houses, cars, etc. - which would undermine a large portion of the economy. The fact that the equity in my home is considered accessible to pay for college is ludicrous. The whole system is broken, very broken.

This is ludicrous, as it relates to UMC families. We are UMC, and have saved more than $300k in various 529s for our rising senior's college tuition and other college expenses. That's sufficient, when including available cashflow, for one kid to attend a private college, or two to attend state schools. And that was not, by any means, the limit to what we could have saved; we stopped dedicated college savings a few years ago and redirected to a taxable account, to provide more flexibility.

It requires planning, and dedication to savings, but UMC families can (and should, in my view) absolutely pay for their children's college. Or are you one of those people who whines that you shoudl get financial aid on your $350k income because you have overspent for decades?

Also, please tell us why why home equity shouldn't be included in financial aid calculations, and if it isn't, how abuses can be curtailed.

You are the exception. You still are not in a position to pay full freight at Gettysburg College or Washington and Lee without an impact on you. But in the latter, a kid’s whose parents make $80k or below goes for free.

The system also does not account for the fact that people make more money as their kids grow up, so capturing the income made the year prior to college is just a snapshot.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How the hell are people going to afford med school?

Most med school students have doctor parents, it's sort of a family trade. It is very hard to become an MD from a LMC family. The truly exceptional ones get full ride at Cleveland or NYU, but still need around 40k-60k for postdoc or highly competitive residency matching. I guess they don't think we need a lot of MDs now, if people will die from Medicare and Medicaid cuts.

Most families with med parents, the kids don’t follow. That’s what I have seen. It’s the middle class (and lower class) kids who pursuer it nowaydays. The kids with the med mom/dad are pursuing passion careers. These days, Med work is tougher option - hard to get there and stick with it.

This is NOT true. There are VERY few true middle and almost no lower class kids pursuing medicine.

[Anonymous]

529s plus cash flow for our two kids -one state flagship and the younger, out of state public with merit scholarship. kids work summers to cover their spending. we started saving when they were babies but even with market gains, could not afford private tuitions which are $80k-$100k/year now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We save for it from the moment our children are born. And frankly, we don't have more children than we think we can pay for. (I'm not trying to be inflammatory or say that you had too many kids. I'm saying I would have had more kids if I had more money.)

This is WILD! I would say the majority of people I grew up with paid for college themselves - yes took out loans, some quite substantial. Exactly zero of them wish they hadn’t been born instead of going into some debt!

No idea how old you are, but I don't many UMC people that had to pay for college entirely themselves...even in the 1980s or 1990s.

Now, my Greatest Generation father did pay for it himself even though he grew up relatively well-off and his father was college-educated. However, you could attend Harvard in the 1950s for literally like $500 total (tuition, room & board for a full year), when the average HHI was like $4,000. It wasn't that huge of a lift even back then and he never had to take out any loans.

If the relationship between tuition and household income stayed the same, Harvard would cost a total of $10,000 today.

I think proponents of the new bill believe that by capping total borrowing, tuition will come down?

They're delusional. To achieve a relationship between tuition and household income that is the same, you would have to increase household income.

College costs have increased (partly due to state disinvestment, partly due to bloated mid-level admin, partly due to health care costs) far faster than incomes have risen. There isn't much to strip out of the cost unless states choose to re-invest in higher education, and that isnot going to be done in response to this bill, because the federal government has also handed other massive new costs to states.

What will happen far more often is that institutions will close outright. We are at the edge of a demographic cliff, as well.

Your post is, to put it politely, a bit clueless. The biggest growth area in higher education in the last 25 years has been the bureaucracy, not the teaching staff. And there's no question that unlimited cheap loans is part of the problem because schools could raise tuition knowing Uncle Sam would be there to dish out loans to anyone who asked for it. This bill is a step in the right direction. I don't like the administration's overall war on colleges but this is one area I fully support. If schools need to retain students, they need to be realistic about their own expenditures and costs and there will be losers (higher edu bureaucracy, lots of programs that really don't need to exist) but the winners will be a more cost effective educational model.

[Anonymous]

Anonymous wrote:You are asking the million dollar question Op.

It's been discussed ad naseum here, podcasts, articles, and at dinner tables between parents all over the country.

Having said that, we are that donut hole family. No financial aid offered, but fronting 40K for college (instate) is tough despite years of savings and kiving below our means.
,My oldest kid's 529 barely covers the 1st year. Thinking of a federal loan for years 2-4.
My other kids' 529 might cover a bit more when their time comes.

Yes, it keeps me up at night....and did I mention both of our cars need $XXX.00 in repairs soon, just had a major appliance break, and a host of other stupid costly things keep eating away.

You are definitely not alone! Lots of solidarity

[Anonymous]

Anonymous wrote:

Anonymous wrote:I for the life of me do not understand how this country let college cost be determined by parent income. Middle class and UMC are in no more financial position to pay for college than those making 50-60k a year, unless those MC and UMC forewent houses, cars, etc. - which would undermine a large portion of the economy. The fact that the equity in my home is considered accessible to pay for college is ludicrous. The whole system is broken, very broken.

This is ludicrous, as it relates to UMC families. We are UMC, and have saved more than $300k in various 529s for our rising senior's college tuition and other college expenses. That's sufficient, when including available cashflow, for one kid to attend a private college, or two to attend state schools. And that was not, by any means, the limit to what we could have saved; we stopped dedicated college savings a few years ago and redirected to a taxable account, to provide more flexibility.

It requires planning, and dedication to savings, but UMC families can (and should, in my view) absolutely pay for their children's college. Or are you one of those people who whines that you shoudl get financial aid on your $350k income because you have overspent for decades?

Also, please tell us why why home equity shouldn't be included in financial aid calculations, and if it isn't, how abuses can be curtailed.

You are not umc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I for the life of me do not understand how this country let college cost be determined by parent income. Middle class and UMC are in no more financial position to pay for college than those making 50-60k a year, unless those MC and UMC forewent houses, cars, etc. - which would undermine a large portion of the economy. The fact that the equity in my home is considered accessible to pay for college is ludicrous. The whole system is broken, very broken.

This is ludicrous, as it relates to UMC families. We are UMC, and have saved more than $300k in various 529s for our rising senior's college tuition and other college expenses. That's sufficient, when including available cashflow, for one kid to attend a private college, or two to attend state schools. And that was not, by any means, the limit to what we could have saved; we stopped dedicated college savings a few years ago and redirected to a taxable account, to provide more flexibility.

It requires planning, and dedication to savings, but UMC families can (and should, in my view) absolutely pay for their children's college. Or are you one of those people who whines that you shoudl get financial aid on your $350k income because you have overspent for decades?

Also, please tell us why why home equity shouldn't be included in financial aid calculations, and if it isn't, how abuses can be curtailed.

You are the exception. You still are not in a position to pay full freight at Gettysburg College or Washington and Lee without an impact on you. But in the latter, a kid’s whose parents make $80k or below goes for free.

The system also does not account for the fact that people make more money as their kids grow up, so capturing the income made the year prior to college is just a snapshot.

Nobody pays full freight for Gettysburg. Literally everyone gets some merit aid.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How the hell are people going to afford med school?

Most med school students have doctor parents, it's sort of a family trade. It is very hard to become an MD from a LMC family. The truly exceptional ones get full ride at Cleveland or NYU, but still need around 40k-60k for postdoc or highly competitive residency matching. I guess they don't think we need a lot of MDs now, if people will die from Medicare and Medicaid cuts.

My niece has doctors as parents and her medical school loans total $500k.

That makes no sense.

Of course it makes sense. Medical school is extremely expensive. And not all parents pay for graduate and professional school.