Reply to What is a "donut hole family"?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]new poster here

Wow.  I thought we were a "donut hole" family but I guess not.

What is a step below "donut hole" called?   We make too much to qualify for aid, but paying for an expensive school would involve far more than "liquidating assets."  It would be more like taking on a second full time job, skipping at least one meal a day,  absolutely zero entertainment budget (not even cable tv or netflix) etc.[/quote]

Well, there is this thing that you had 18 years to save for college. Which is what most people do.[/quote]
Most people…do not save for college for 18 years. Because they are supporting their families, paying off their own student debt, and trying to save for retirement.[/quote]

+1.  For a large percentage of Americans, prioritizing college savings would come at the expense of other things we consider to be necessities, or retirement savings.  Which is not always wise because you'll be a burden to your kids in retirement too.  I remember being pretty upset at 18 realizing my parents had nothing for me for college.  But in retrospect I don't know where they would have found the money to save- we weren't taking fancy vacations, no travel sports or dance lessons, my mom cut coupons, etc.  They still probably don't have enough for retirement but better off than many.  We did get financial aid but a lot of that "aid" was loans.

Our HHI is up to $200k and I feel extremely fortunate that we can stash away a few hundred per kid per month.  [b]But it's crazy that you have to save 18 years for even an IN STATE university.  This did not used to be the case.[/b]  The only real affordable option for the middle class now is community college.[/quote]

+1[/quote]

+1,000

The trajectory of college tuition does not mirror the trajectory of salaries in the US.

Colleges have become like country clubs. The amenities are ridiculous.  State of the art fitness centers, millions of dining options, free exercise and yoga classes and wellness centers.  All of this to attract more students while driving up the cost of tuition.

BUT MORE IMPORTANTLY: its financial aid that has driven up the cost of college tuition.  They know people will borrow.

Ironically, financial aid, which is supposed to make higher education more accessible, could actually contribute to rising college costs.

President Reagan's Education Secretary, William Bennett, began to speak about the phenomenon in the 1980s. It became known as "the Bennett hypothesis," after he published a New York Times op-ed called "Our Greedy Colleges" in 1987. President Obama also acknowledged the issue during his presidency, but the problem persists.

According to some estimations, for every new dollar of federal student aid, tuition increases by up to 65 cents.

Tuition and fees at private National Universities have jumped 134%. Out-of-state tuition and fees at public National Universities have risen 141%.

https://www.usnews.com/education/best-colleges/paying-for-college/articles/see-20-years-of-tuition-growth-at-national-universities#:~:text=Tuition%20and%20fees%20at%20private,National%20Universities%20have%20risen%20141%25.

Over the last 20 years, the cost of college tuition at nonprofit institutions rose more than any other U.S. consumer good or service besides hospital care. Now, a college education is the second-largest expense a person will likely ever make, right after buying a house. The cost of a college degree in the U.S. supersedes any large country in the developed world.

In 1978-79, it cost $17,680 per year to attend the average private college and $8,250 per year to attend the average public college, after factoring in inflation. Forty years later, those respective costs increased to $48,510 and $21,370. This constitutes a 174% increase in tuition at private colleges and a 159% increase at public colleges. And these rates show no sign of slowing down.

https://www.affordablecollegesonline.org/college-resource-center/news/what-factors-are-driving-rising-college-costs/
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