Reply to 2025 & 2026 donut hole families

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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 is a donut hole family?  High income nut no savings?[/quote]

Too rich to get aid. But not rich enough to easily pay $90k a year, especially with multiple kids. Usually live in high cost of living areas.[/quote]

And also made the choice not to save but instead increase their lifestyle as their income increased.  Because even in a "hCOLA" if you have been making $250K for the last 5 years, you could have chosen to save $20-30K/year, and likely for more than 5 years
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This doesn’t get you anywhere close to affording private colleges at full cost for one kid, let alone two or more.

And of course you’ll say, “just go in-state public!!” Which, sure, but that’s kind of the point of the donut hole. It’s not that you can’t afford *any* college, just that you are priced out of some of them while others above and below are not.[/quote]

Actually it does.  We could "afford it" now as we paid off our house and we live way under our means as we haven't changed our lifestyle as our income goes up.  Would it be smart, no.  Does my child want to go to a school thats $90K, no, but some are $60K.  If you made lifestyle choices that are different, then don't complain of what you cannot afford when you choose a differnet path.  While you vacationed, we saved.  While you go out to $100-300 meals, we go to $60-80 meals.[/quote]

No, it doesn’t. A kid starting school at good private colleges next year is looking at a total COA of close to $400k over the next four years. Five years of saving $25-30k does not get you there at all. You would need at least 10 years at that amount and with a real return of 7%. And that would just cover one kid.
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Yes, it does.  We started saving since birth.  Those vacations you took, well we didn't and that money got put away.  When you bought your expensive house in the "good" school district, we stayed in our small little house and paid it off... We saved about half that but stopped as we can pull from retirement.[/quote]

Someone being fiscally responsible and showing restraint. Amen. I wish there were more people like you.[/quote]

Spending 400k on an undergraduate degree after living super frugal ist not fiscally responsible. Going to a good state school is or lower ranked private with merit aid. [/quote]

Yes, it is fiscally responsible.  They saw something they valued and want for their kids/family.  They chose to make choices so they could save and afford it.  Now is it for everyone---probably not, but it's not like their kids were forced to beg on the street corners so they could save.  They simply lived in a smaller house that wasn't in the tippy top neighborhood.  So they lived in a 2K sq ft 25 yo home with decent schools and take vacations of only $3-4K once per year, drove affordable cars for 10-12 year and replaced when necessary.  While you chose to buy a $1.4M, 5K sq ft newer home in a top school district, drive a $75K car for both spouses that you replace very 4-5 years and get the kids a nice car at 16, and travel to Europe every summer and a Caribbean/hawaii beach vacation at least once per year.  
They chose to live a good lifestyle they can afford.  You chose to blow thru your money for a luxury lifestyle and now are complaining you don't have enough for the colleges you want.

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