Reply to How do most middle to UMC families pay for college?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I for the life of me do not understand how this country let college cost be determined by parent income.  Middle class and [b]UMC are in no more financial position to pay for college than those making 50-60k a year[/b], 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.[/quote]

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.

[/quote]

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.[/quote]

If we are the exception, it's because other people choose not to prioritize college savings.

Also, you have dramatically shifted the goalposts - from "UMC are in no more financial position to pay for college than those making 50-60k a year" (which is obviously nonsense) to "well, you can't pay for a private college 'without an impact on you.'"  Sure.  If the measuring stick you are using is that "college is unaffordable if you can't pay for it out of pocket change," then of course virtually no one will satisfy it.

Rather than nit picking my personal situation, please address the larger point - that if UMC families start saving early and stick to it (as another PP said, slow and steady) they will have substantial college savings by the time their kid(s) are college age.  How much for any given college depends on a variety of factors, such as market performance, number of children, etc.  And as you say, their incomes likely will have risen by then, which means they can pay for some costs out of earnings.  Unless, of course, they have increased their lifestyle in conjunction with their larger paychecks - which, again, doesn't make college unaffordable.  It just means that they didn't prioritize it.

[b]Still waiting for some principled reason as to why home equity shouldn't be considered in financial aid calculations. [/b] [/quote]

Home equity comprises part of people's financial plans in that it is generally considered the best practice to pay off the mortgage on the primary home before retirement.  This enables retirees to live on a fixed income more easily.

For older parents especially, this is very important.  If a parent will retire within a few or several years of having children in college, the parents have no time to recoup the loss of home equity that was tapped for college expenses.[/quote]

This translates to either "it is not financially optimal to use this asset for college" or "if I use this asset to pay for college, I may not be able to retire as easily as I otherwise might."

Neither of those is compelling.  In fact, they're both ridiculous.  At the end of the day, you are still asking for financial aid so that you don't have to tap one of your assets.  [/quote]

Also, please tell us why why retirement accounts shouldn't be included in financial aid calculations.[/quote]

Because you cannot access those unless you are old enough.  [/quote]

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