Why do donut hole families

[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.

But that's the problem, college expenses have become exploitative for most family budgets. As PP suggests, your entire adult life you're now supposed to be either saving for college or paying off your loans. It's basically become a third layer of taxation in addition to state and federal.

College costs are INDEFENSIBLE here in the US. No other country in the world has such expensive university education, and yet many have excellent institutions. It IS exploitative.

It's like the cost of healthcare in this country. It does not need to be that high! Other wealthy nations do it for much less.

But here capitalism rules, the federal government has very little regulatory control compared to other countries... and we are left with this. Very little upward mobility in an erstwhile upwardly mobile country.

So you're all right where universities want you, suckers: bickering amongst yourselves, and forgetting that you are all being exploited BY THEM.

It is a choice. No one has to send their child to one of the expensive schools; there are other options.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I agree. Especially because most donut hole families can easily afford instate schools. I turned down W&M back in the day (instate) and went to CNU instead for financial reasons.

There are a wide range, and some can not easily afford 40k a year for instate

Then you find what you can afford. Search merit at "lower state schools" or private schools. There are plenty of ways to attend college and have it be affordable. Take duel enrollment courses in HS and earn your AA while in HS, got to CC for 2 years then transfer to 4 year college, find a school that will give you great merit (hint: acceptance rates over 50-60% and your kid's stats at 90%+ might be needed)

My own 1200/ 3.5UW student recently graduated from a T80 and with merit we only paid ~$40-42K/year. They could have attended a T120 for only $25K/year. We got that and were NOT searching for merit. Now imagine if we had actually searched for merit or if my kid had a 1400+/3.9+UW---there would be many more options and much more merit awarded. I know because my 1500+/3.99UW got $40K+ per year at a T40 School. Had they been searching merit/could not afford $40K/year, they could have found many colleges to attend for $20K.

There are options and it would be smart for everyone to pick what is affordable/works best for their family. Going into debt for college is not smart.

[Anonymous]

Our earnings would be lower elsewhere. It is also not realistic to think we could just move somewhere else and find employment. You seem to think this income implies a luxury lifestyle in NYC - we live in an outer borough, commute an hour to work in public transport, and send our kids to NYC public schools. Some people live in NY because they come from NY. I think you are very invested in the narrative that all donut hole families are whiners or have done something wrong. This makes you seem very self-righteous.

Anonymous wrote:

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:

Anonymous wrote:It’s really irritating that you have to pay $80k a year and there is no way it actually costs $80k a year. You are subsidizing all the kids who pay less than $80k a year. There is no way I can afford to pay $80k a year.

Luckily, you don’t have to pay $80k a year. No one has to pay $80k a year, there are tons of lower cost options available.

Then why won't financial aid families send their kids to those colleges?

Because top colleges value having economically diverse student bodies.

[Anonymous]

Anonymous wrote:

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.

But that's the problem, college expenses have become exploitative for most family budgets. As PP suggests, your entire adult life you're now supposed to be either saving for college or paying off your loans. It's basically become a third layer of taxation in addition to state and federal.

Not all colleges. There are plenty of excellent colleges that are much cheaper.

Name an excellent college for a Virginia resident that's comparable to what a Florida resident would pay for UF

What is your point? Other states have lower instate tuition? Then, lobby your state government to cover more of the tuition in your state.

[Anonymous]

Anonymous wrote:I think it’s insane that our $250K family did not get 1 penny FA for a $60K/year school.

We were also not always $250K family, we were closer to $160/year, then $180K for a few years. Plus the $250 includes one of us having 2 jobs.

My H is a cop and I was a GS-13 most our lives so we could not really save that much.

Well if you still lived as if you earned $160K/year, you could cash flow the $80K/year with the extra. You could have chosen to save the increases in income for college (or at least part of 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.

But that's the problem, college expenses have become exploitative for most family budgets. As PP suggests, your entire adult life you're now supposed to be either saving for college or paying off your loans. It's basically become a third layer of taxation in addition to state and federal.

College costs are INDEFENSIBLE here in the US. No other country in the world has such expensive university education, and yet many have excellent institutions. It IS exploitative.

It's like the cost of healthcare in this country. It does not need to be that high! Other wealthy nations do it for much less.

But here capitalism rules, the federal government has very little regulatory control compared to other countries... and we are left with this. Very little upward mobility in an erstwhile upwardly mobile country.

So you're all right where universities want you, suckers: bickering amongst yourselves, and forgetting that you are all being exploited BY THEM.

+1

Only in the US would people compare a university education with a luxury car.

[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.

“You have nearly two decades to save” - what?? Two decades ago, no one thought colleges would cost $90K/year. No one saved at that rate PER KID back then, if they were also paying off student loans, buying a house, etc.

Exactly!! I put in my college cost per year in the mid-90s and what it should be now based on an inflation calculator. The actual cost is WAAAAAY higher. I don't know why some people think anyone can save 400K per kid while paying for all the other expenses (even without being frivolous).

[Anonymous]

Anonymous wrote:One reason we complain is that we are also sandwich generation families, not just donut holes. Our families made less money when we were kids, so we received financial aid in college, took out student loans, then excelled in life, got good jobs, but spent so much $$$ paying off student loans that we didn't have enough cash to save for our own kids' colleges. However, we earn enough now to receive no financial aid, and can probably only afford in-state tuition and not full-pay private tuition, so that's why we're upset. And now some of us sandwich generation have to give money to provide for our aging parents (who were not earning much $$ to begin with) all while figuring out how to pay for our kids' educations. When I went to undergrad, tuition was $17k at a top 10/15 private university. Now that tuition is $60k. It's just sad.

This is my personal story, so not everyone is in the same boat. We have saved enough in 529s for all 3 kids to go to in-state schools. We could use cash flow + 529 for one child if they get into a private worth paying full price for. This is where it's sad because we can't afford to do that for all 3, but oh well, what are the odds they'll all 3 be smart enough to get into a top 10/15 school anyway? There is no guarantee that they will have the same experiences that I had and I accept that.

Nobody forced you to take out excessive loans and get degrees that had a low ROI. I financed my entire education at GMU and graduated with very little debt.

Nobody forced you to wait until you were geriatric to have kids either.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s really irritating that you have to pay $80k a year and there is no way it actually costs $80k a year. You are subsidizing all the kids who pay less than $80k a year. There is no way I can afford to pay $80k a year.

Luckily, you don’t have to pay $80k a year. No one has to pay $80k a year, there are tons of lower cost options available.

Then why won't financial aid families send their kids to those colleges?

Wait, do you think "financial aid families" don't send their kids to schools that don't cost $80k a year? That is where the vast majority of middle class kids go. To affordable colleges. I suggest you look at the demographics of schools like UMD-CP, UMBC, Towson, Salisbury, Frostberg...lots of "financial aid families", lots of kids who could have gone to a private college ranked higher in some magazine but chose the affordable option instead.

[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.

Yes, and I would only add that the average cost of tuition has increased more than 144% since 2001 on average, even after accounting for inflation. Even investing wisely, it's difficult if not impossible to save enough.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s really irritating that you have to pay $80k a year and there is no way it actually costs $80k a year. You are subsidizing all the kids who pay less than $80k a year. There is no way I can afford to pay $80k a year.

Luckily, you don’t have to pay $80k a year. No one has to pay $80k a year, there are tons of lower cost options available.

Then why won't financial aid families send their kids to those colleges?

Because top colleges value having economically diverse student bodies.

They value barbell student bodies. The ones in the middle are the ones with parents stupid enough to take out 100k in parent plus loans

[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.

“You have nearly two decades to save” - what?? Two decades ago, no one thought colleges would cost $90K/year. No one saved at that rate PER KID back then, if they were also paying off student loans, buying a house, etc.

Yes, 2 decades ago people did anticipate colleges would cost nearly this much. Simple college cost calculators would tell you that. Not to mention, along the way you could tweak your estimates upward. 20 years ago our Financial advisor estimated that "mid level"/OOS at UVA would be $50-55K/year and high end would be $75K/year, with In-state /low cost being $25-30K. That's fairly close estimate. college cost estimators gave similar results.

Don't buy a house until you can pay off your student loans, don't have more kids than you can save for college for, make your choices and then you get to live with your choices.

[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.

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

You are not the sharpest tool if you send your kid to a school that costs 100k/yr. This is like buying a Birkin bag and complaining how expensive handbags are these days.

[Anonymous]

Anonymous wrote:

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

there are many options besides SEC schools. But yes, choose whatever you like best that you can afford. There are many options out there for good students. You may need to step down just "1 tier" but your smart kid will still get an amazing education. It's what they do while at college that matters.