Reply to What is a "donut hole family"?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Why does this topic generate all of the value judgements. The term donut hole family is just used to describe people who are price-sensitive. If income is low enough, there is no price sensitivity, because aid will mitigate any price change. Above a certain income, price changes are relatively unimportant. In between, there is sensitivity to price changes. Neither good, nor bad, just economics. [/quote]

Outside of the T25 or so universities, "low income" people are still extremely price sensitive, as those schools don't give full FA always.  Also, your choices are limited because if your parent(s) can barely keep the lights on at home or the car functioning, it's highly likely attending a school that is a plane ride away might be a financial deal breaker versus one that is only 1-2 hour car ride away.

So "donut hole" is really only for those aiming for T25-40 schools that chose not to save enough for college. Therefore they are price sensitive and need to compare offers and hope for merit.

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I am surprised by posters who think families at 180k can very easily save 800k+ earmarked for college. Are posters with that opinion much wealthier?[/quote]

For the top schools, 180k would get full tuition coverage and some cover full tuition up to 200k with typical assets(Harvard, Princeton, Penn). So the cost would be about 30-35k. That is less than UVA in state. 180k reasonably should be able to have 32k per year to go toward college. 32k per year x saving since the kid was 5yo is 416k, with typical interest over 440 total.  For 2 kids that means 220kfor ea kid 4 yrs plus the 32k that you have been saving put directly into college costs each year. Thats 348k without accounting for the kid to earn some themselves or have a campus job(many of these high level schools pay 8-10k per year for 10hrs a week undergrad TA). None of that counts the $ you save on food and sports/activities when your kid is not living at home. 
It is doable to have saved enough on 180k if you planned. But even if it is not, the ivy/most elite schools have a net cost of under 40k per year to attend these schools, some are under 30 at 180k income. [/quote]

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