Reply to where do highly academic $ donut hole students go?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]what does donut whole mean?? poor?[/quote]
Too rich for financial aide, but too poor to pay out of pocket.[/quote]

The term "poor" is relative. It's middle to UMC who want the brand name college but don't want to pay $80k / year, but can squeeze out close to $45k / year if it came to it.[/quote]

Real middle class will get financial aid.  The people complaining make $125/150-400/500K who don't want to save or pay or understand they need to go to a state college that is more affordable.[/quote] +1. [/quote]

I think they wish the sliding scale would just slide more. 200k in income and 200k in assets gets you a lot of aid. You'd pay about 25k at a lot of schools.  Totally doable. 200k and 500k in assets means [b]they want you to pay down all that savings[/b]. It's a gut punch bcs it takes a lot of work to save that much on that salary -- also because you're limited to what you can shelter in retirement and there's no foresight into bigger picture ie a second or third kid to consider.  I think if the people making 200k and having 500k in retirement had to pay 65k, they'd be a lot less stress about this. [/quote]

What do you mean by "pay down all that savings"?  No college expects you to contribute all of your assets, including liquid savings, only a certain percentage that's way less than half.  Assets in a 529 plan are obviously in a different class. [/quote]

If you have two kids four years apart, that’s 5.65% for 8 years. That’s 45.2% of your savings. [/quote]

No, because it won't be 5.65% of $300K all 8 years since you will be slowly spending down that amount.  For example, 5.65% of 300K the first year ($16,950), second year will be 5.65% of $283,050 ($300K minus the $16,950 you paid for the first year), etc.  This example assumes, of course, that you're not adding additional assets each year, whch would also impact any financial aid you receive. [/quote]

Not necessarily. Hopefully there are 529s involved. [/quote]

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