Do you make $400,000 a year but feel broke?

[Anonymous]

Anonymous wrote:

Anonymous wrote:So that family won't send their kids to private. See how easy that is? You act as though private school is a right and the school needs to accommodate everyone. It is really bizarre.

Actually, I think we see eye to eye then. We agree that this family could not afford private without some modest amount of aid. My stance is that privates should endeavor so that every applicant has the ability to attend if they are willing to make an appropriate economic sacrifice.

And that family could. If they made different choices. They did not. So their kids go to public.

[Anonymous]

Anonymous wrote:Your financial logic doesn't make sense. If a family with $400k should save $100k first and then allocate the remainder to private school and every other living expense, and a family making only $300k should save $75k first before paying for private school, who is making an appropriate economic sacrifice? The one with a cheaper house? The one with more or less savings? What about the family down the street subsisting on $250k? Should they get large scholarships or tuition discounts? Or smaller ones?

I've never suggested that the family on $400k should get to save $100k and only pay the remainder towards private school. I've said that there might be circumstances where a small grant is appropriate in this circumstance - such that, for example, they are asked to pay the majority of that $100k towards tuition, but not every last penny. Again, this would only be plausible if we were talking about multiple kids, as any family on $400k can afford one private school tuition full stop.

So for example, let's assume for the sake of argument a family on this income can save $120k living pretty frugally in this market - i.e., a modest townhouse, late model cars, limited disposable spending.

Now let's assume that the headline tuition for their kids to attend private is $120k per year. You really think they shouldn't receive one penny of aid?

I will note that when I received aid growing up (on about $65k HHI - probably a bit more adjusted for inflation), my parents and I were both asked to contribute (I worked part time jobs and used them to pay some of my own tuition). However, the schools never took it so far that my parents were asked to pay every last dollar, down to having no retirement savings. Nor should anyone be asked to do that today.

The circumstances where a family at the $400k HHI level would need any aid are probably rare, but they do exist.

[Anonymous]

So what you're saying is that the more children you have, the more freebies you should get?

If you were making $15K, wouldn't everyone on this board be telling you you shouldn't have had so many kids?

[Anonymous]

Anonymous wrote:

Anonymous wrote:You should have planned better and not had 4 kids. Or, if saving is your first priority and private school is your second priority, then you should have bought a tiny older house in PWC or somewhere for cheap, in order to afford your first two priorities.

That's irrational. Financial aid offices don't punitively reject applicants to penalize their parents for bad choices.

Think about it, if a family with $65k HHI and 4 kids applies for aid, they will likely get a full grant, even though you can make the same moral arguments to their parents. By the same token, a family on $400k HHI with 4 kids could easily get a small grant where they are asked to pay $110k instead of $130k. This really isn't that controversial.

But it is. I tell you what, hearing about people making $400k who think they deserve financial aid makes me want to take to the streets and start burning things down. And I have nothing against people having wealth, making the choices that get them money, etc etc. But your sense of entitlement is really - well, I would say it's positively trollish, but I think you might actually mean it.

[Anonymous]

Anonymous wrote:So what you're saying is that the more children you have, the more freebies you should get?

If you were making $15K, wouldn't everyone on this board be telling you you shouldn't have had so many kids?

That's a very punitive and elitist mindset. While I wouldn't advise a family making $15k to have 4 kids, I wouldn't describe their kids getting need-based financial aid (or other social programs they may qualify for) as "freebies". Their kids are deserving of having educational opportunities too and shouldn't be stigmatized the way you are doing.

[Anonymous]

So, let me understand this. The $400k HHI family with four kids (tuition bill of $120k/year) should get some financial aid to help. Meanwhile, my family ($150 HHI, 1 kid) gets no financial aid and we are just fine. That $400 HHI family can pay full freight for four tuitions and STILL have more money coming in than my family, and yet you think they need FA? That's just wacky. Pay for what you want most passionately first (school, saving, or house) and then allocate what you have left. For my family, we allocate in that order, and so have a fantastic school, reasonable savings, and a little home in a cheap 'burb. Priorities.

[Anonymous]

Anonymous wrote:

Anonymous wrote:So what you're saying is that the more children you have, the more freebies you should get?

If you were making $15K, wouldn't everyone on this board be telling you you shouldn't have had so many kids?

That's a very punitive and elitist mindset. While I wouldn't advise a family making $15k to have 4 kids, I wouldn't describe their kids getting need-based financial aid (or other social programs they may qualify for) as "freebies". Their kids are deserving of having educational opportunities too and shouldn't be stigmatized the way you are doing.

Ha! We are the elitists. Not the guy who thinks he should get financial aid on a $400k salary. That's cute.

[Anonymous]

Anonymous wrote:

Anonymous wrote:But it is. I tell you what, hearing about people making $400k who think they deserve financial aid makes me want to take to the streets and start burning things down. And I have nothing against people having wealth, making the choices that get them money, etc etc. But your sense of entitlement is really - well, I would say it's positively trollish, but I think you might actually mean it.

Take to the streets - I'll throw the first bottle. I think the problem you're having is that you're stuck thinking about this from your own experience, so you're perceiving a fantasy world that doesn't really exist at the higher income level. I've lived at both extremes (and would have probably had the same views as you 10 years ago), so I think I have some perspective on the realities of life at both HHI levels.

Again, I'm not complaining that life is tough at $400k. It's not. But it's not like money is growing on trees at that level such that you can spend with no consequence.

Another example on the extreme... my grandparents had 10 kids. They were not wealthy, but in a hypothetical world where that same family exists today at a high HHI like $400k, would you really expect every school-age child to pay full freight at a DC private? I think you'd have to agree that would be crazy - and likely impossible even they were willing to make every financial sacrifice possible. My position is simply that financial aid policies should endeavor to permit every family to have a rational basis to send their kids to private. And in very rare circumstances, even a $400k HHI could qualify some small level of aid if there were enough tuition bills (and the income was recent with no nest egg supporting it).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So what you're saying is that the more children you have, the more freebies you should get?

If you were making $15K, wouldn't everyone on this board be telling you you shouldn't have had so many kids?

That's a very punitive and elitist mindset. While I wouldn't advise a family making $15k to have 4 kids, I wouldn't describe their kids getting need-based financial aid (or other social programs they may qualify for) as "freebies". Their kids are deserving of having educational opportunities too and shouldn't be stigmatized the way you are doing.

Ha! We are the elitists. Not the guy who thinks he should get financial aid on a $400k salary. That's cute.

Yes, if you think financial aid to needy families and other social programs are "freebies," you are definitely an elitist. I would never even think to use that term when describing aid to kids of a mom making $15k.

[Anonymous]

Anonymous wrote:So, let me understand this. The $400k HHI family with four kids (tuition bill of $120k/year) should get some financial aid to help. Meanwhile, my family ($150 HHI, 1 kid) gets no financial aid and we are just fine. That $400 HHI family can pay full freight for four tuitions and STILL have more money coming in than my family, and yet you think they need FA? That's just wacky. Pay for what you want most passionately first (school, saving, or house) and then allocate what you have left. For my family, we allocate in that order, and so have a fantastic school, reasonable savings, and a little home in a cheap 'burb. Priorities.

Without running it through any calculators, I'm going to estimate that in those two examples, the first family has $250k of after tax income, and you'd probably have about $120k? In addition to tuition, the first family also has the expenses associated with three additional kids (including housing costs, as the small townhome you can make work doesn't work for them).

If both you and they were attending public, they'd surely be better off financially, and be saving more than you. But if we deduct $30k from your budget and $120k from theirs, you'd definitely be living more comfortably and saving more. So yes they'd absolutely be more deserving of some small aid grant than you IMO.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You are out of your mind. Feel free to drop to $100k and apply for financial aid. Private school isn't a right and no one owes you the ability to send your kids there. Either pay for it (which you can easily do on $400k if it is a priority) or go public.

You've kind of conceded the point though when you say "pay for it or go to public." It's a huge financial burden on someone making $400k HHI (again, coming from no wealth) to afford private school tuition. There's no reason that the people on $1M HHI shouldn't be subsidizing people in this income range. Hence, a system where a small amount of need-based aid is provided seems like good policy unless you want private school to become a right only of the very rich and poor.

Wow. If I made 400k - I could EASILY pay for private school for my child. Wow. Just wow.

[Anonymous]

Anonymous wrote:

Anonymous wrote:So, let me understand this. The $400k HHI family with four kids (tuition bill of $120k/year) should get some financial aid to help. Meanwhile, my family ($150 HHI, 1 kid) gets no financial aid and we are just fine. That $400 HHI family can pay full freight for four tuitions and STILL have more money coming in than my family, and yet you think they need FA? That's just wacky. Pay for what you want most passionately first (school, saving, or house) and then allocate what you have left. For my family, we allocate in that order, and so have a fantastic school, reasonable savings, and a little home in a cheap 'burb. Priorities.

Without running it through any calculators, I'm going to estimate that in those two examples, the first family has $250k of after tax income, and you'd probably have about $120k? In addition to tuition, the first family also has the expenses associated with three additional kids (including housing costs, as the small townhome you can make work doesn't work for them).

If both you and they were attending public, they'd surely be better off financially, and be saving more than you. But if we deduct $30k from your budget and $120k from theirs, you'd definitely be living more comfortably and saving more. So yes they'd absolutely be more deserving of some small aid grant than you IMO.

We have a HHI of around 1M and two kids at a DC private school. I definitely do not want to subsidize your procreation. You had four kids. That choice was yours. If you can't pay for private school, that is the consequence. In reality, no family making $65K a year is sending four kids to private school even with aid. Heck, most families making $1M aren't sending four kids to private school. Big family=public school. Or, maybe you can just pick your favorite kid and send that one to private!

[Anonymous]

I don't think HHI 400k for a family of 4 should feel broke no matter what high COL area they live in, but I really don't think it's that much money, and can easily be spent if not careful. Our HHI is around 300k and we can max out our retirement and college savings and still go on 2 vacations/year and eat out once in awhile. We drive our 10+ year old Hondas to the ground and are careful with what we buy. With daycare, student loans, mortgage on a modest house, insurances, daily living expenses, it all quickly goes. Our luxuries are we get to spend 10k on traveling, eat out 1-2x a week, max out 401ks, and contribute 24k/yr to 529s, but that's really it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Who's mandating the 100k savings? Look, I paid 36k per year in childcare costs making much less than 400k. We had to cut back savings to do that. Choices. You don't get to save that much and tell the school to work with the remainder. This is bizarre.

I don't think there's any dispute about paying $36k, even on much less than $400k.

Let's take the other extreme - four kids on $400k for a family with no wealth. Do you really think any rational person would pay full freight x 4 at that income level? It would be a choice between ending up with no savings at all (even assuming a frugal lifestyle) - possibly not even 401k funding - or saving $100k+. Financial aid policies are generally set so that every family can make a rational decision to attend, which would not be the case in that example. If a school in that circmstance says "we're going to ask you to pay $80k so you can save $20k," you really find that offensive?

Right. So that family won't send their kids to private. See how easy that is? You act as though private school is a right and the school needs to accommodate everyone. It is really bizarre.

I think people are sometimes backed into a corner in certain districts like DCPS and feel like private is a right.

[Anonymous]

Anonymous wrote:I don't think HHI 400k for a family of 4 should feel broke no matter what high COL area they live in, but I really don't think it's that much money, and can easily be spent if not careful. Our HHI is around 300k and we can max out our retirement and college savings and still go on 2 vacations/year and eat out once in awhile. We drive our 10+ year old Hondas to the ground and are careful with what we buy. With daycare, student loans, mortgage on a modest house, insurances, daily living expenses, it all quickly goes. Our luxuries are we get to spend 10k on traveling, eat out 1-2x a week, max out 401ks, and contribute 24k/yr to 529s, but that's really it.

the bolded part really says it all.