Anonymous wrote:

Anonymous wrote:they're not in a different class.

I've seen you post before about income vs assets and it's apparent you know .. a little. But it's easy to know more so let's do this!

Income varies quite widely btw schools but it can be somewhere between 22-47% of after tax income. Be sure to add back any retirement contributions into that income (eg income /= AGI).

Let's say you make 240: you'll pay 40-72k for college.

Then, parents are expected to pay 5.64% of their unsheltered assets annually. 529s are parent assets, if they're in the parents name (normal). Counted just the same.

so if you have 500k in assets: That's 28,200 a year to add to total.


if you have that 500k in retirement, you pay nothing. But what you can shift into retirement is limited by income so you're probably stuck here.

if you have another 100k in the kids 529: add $5640

Kids assets are hit at 20% so dont have that 529 in the kids name. Kids income is hit at 50% (After a set aside).

So you can see, this family is well into full price range.

You obviously know a lot and your analysis is spot on. Yes, having $500K versus $200K in assets may very well push you into full pay status, and I didn't mean to imply otherwise. What I was trying to push back on was the idea that if you were diligent in saving that additional $300K, a college will get most of that money so what's the point of saving it. As you correctly pointed out, 5.64% is a heck of a lot less than the 22+% for income. So even if that $300K pushes you into full pay status, the financial/need-based aid you would have otherwise received (given the same income) is not going to come close to $300K, meaning you're better off having saved that money than not.

only sorta. had you spent that on boats and vacations for the last 15 years, you would be paying let's say 35k on tuition. as opposed to 85k to the person who really gave up and saved. over 4 years, that's 200k. so you're 100k ahead but without that 300k worth of experiences taking your kids to Europe when they were growing up or sending them to pricey summer enrichment or potentially (we see this a lot) having a stay at home parent to handle the sandwich duties of kids and parents - which would have relieved a lot of stress over the last 18 years.. and that's for one kid. for two kids, I'm not sure you're ahead at all.

1. What everyone else said.
2. Take out loans, knowing that will start to dictate future plans--hard to pay back as a curator, English or history prof, social worker, or teacher, though there are public service loan forgiveness programs.
3. Really strategize the APs to take time off in the middle or graduate early--the range is extraordinary (from pretty much only giving nothing but advanced placement in a couple of classes to getting a year+ of credits). If graduating early, not only savings in tuition but getting into workplace early--whole recent thread on that.
4. If National Merit semifinalist, offers will come with full/substantial aid and even offers to complete the application for you, though larger awards from schools that are less familiar. That's without looking at the formal list of national merit schools--but if looking at that list, you might maximize chances by parsing numbers of just how many national merit scholarships they give out.
5. There are SO MANY schools that are never mentioned here, esp Midwest SLACs, that people in the region know are good schools by word-of-mouth reputation but may not look "selective" based on stats--top students find their cohort because the student body self-selects those schools (i.e., in that the mid-range kids are going to commuter state schools and top kids are going to those schools). So even if they are not 10% acceptance, the students who are picking that school are the solid students/honors/AP kids/valedictorians.

Anonymous wrote:they're not in a different class.

I've seen you post before about income vs assets and it's apparent you know .. a little. But it's easy to know more so let's do this!

Income varies quite widely btw schools but it can be somewhere between 22-47% of after tax income. Be sure to add back any retirement contributions into that income (eg income /= AGI).

Let's say you make 240: you'll pay 40-72k for college.

Then, parents are expected to pay 5.64% of their unsheltered assets annually. 529s are parent assets, if they're in the parents name (normal). Counted just the same.

so if you have 500k in assets: That's 28,200 a year to add to total.


if you have that 500k in retirement, you pay nothing. But what you can shift into retirement is limited by income so you're probably stuck here.

if you have another 100k in the kids 529: add $5640

Kids assets are hit at 20% so dont have that 529 in the kids name. Kids income is hit at 50% (After a set aside).

So you can see, this family is well into full price range.

You obviously know a lot and your analysis is spot on. Yes, having $500K versus $200K in assets may very well push you into full pay status, and I didn't mean to imply otherwise. What I was trying to push back on was the idea that if you were diligent in saving that additional $300K, a college will get most of that money so what's the point of saving it. As you correctly pointed out, 5.64% is a heck of a lot less than the 22+% for income. So even if that $300K pushes you into full pay status, the financial/need-based aid you would have otherwise received (given the same income) is not going to come close to $300K, meaning you're better off having saved that money than not.

"In state flagship honors college" sounds great! Except as a DC resident, I don't have one. All I have is DC TAG, which knocks $10k off of OOS costs. Will that get us to parity with in state tuition in MD? (It sure doesn't in VA or CA.) In what states does this actually work?

Anonymous wrote:Those of you shocked by this, did your parents not go through the same thing?

I'm 49 and I clearly remember my super frugal parents (they shopped at thrift stores for everything) having to pay 100% for my university while my roommate who had every latest gadget and outfit was on 75% financial (not merit) aid. I went to her house and it was twice as big as mine and four times as nice.

Colleges have rewarded the non-savers, big spenders for 30+ years!! This is nothing new. You either join in (and start spending) or keep saving and sleep at night.

Not buying this. We own a house and have good 529 savings (for our income) and get good need based aid commensurate with our income. You sound like a political troll.

If they are smart, they search for merit at good schools that are a great fit for them and aim to make college affordable to them. That means In-state/in-state honors programs, private schools that offer merit (outside of the T30 many do---many 30-100 ranked schools offer a lot to top students).

A kid with 1550+/3.9+/8AP+ can definately find several T100-150 school that will be under $20-25K for them.

Anonymous wrote:The worst are expensive OOS publics. They generally reserve grant aid for in-state students and cost close to a private.

We've found only a handful are ridiculously priced for OOS: UM, UVA, WM and the UC schools. The remaining stronger public schools are $50-55 OOS full pay. Many will provide just enough or more merit to compete with in state flagship.

Those of you shocked by this, did your parents not go through the same thing?

I'm 49 and I clearly remember my super frugal parents (they shopped at thrift stores for everything) having to pay 100% for my university while my roommate who had every latest gadget and outfit was on 75% financial (not merit) aid. I went to her house and it was twice as big as mine and four times as nice.

Colleges have rewarded the non-savers, big spenders for 30+ years!! This is nothing new. You either join in (and start spending) or keep saving and sleep at night.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:what does donut whole mean?? poor?

Too rich for financial aide, but too poor to pay out of pocket.

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.

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.

+1.

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 they want you to pay down all that savings. 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.

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.

529 (in parent's name) counts the same as any other parental investment. It would only count more if it were directly in kid's name.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Williams for us - pay $23k with $210k income. Pretty low assets (one govt employee and one assoc prof who rented forever).

Then you aren’t doughnut hole. It’s similar salary but with assets, including primary residence you can’t really sell, that make you ineligible for grants but unable to afford $85K a year.

+1

in DC area--$300k-450k is a donut hole family. 2 or more kids. SFHs run you $750k-2 million. COL is very high here.

A lot of pricey private schools offer merit or aid for $200k-once you get to $300k forget it.

Are you all for real? 300-450k/year should easily be able to save for full tuition.Maybe someone at 200l gets some aid, but at 300k, you get an extra full year of COA of the priciest school for every year worked. How do you still need aid? Honestly, the privileged griping here. We only make about 150k/year and will save enough to pay at least 40k/yr for 2 kids. We own a home that is now worth about a million$ due to crazy real estate escalation, but we still qualify for good need aid at many LACs and CSS universities. Fine if you want to shop merit or take advantage of great MD/VA flagships, but I don't get people moaning about the cost of admission when they have the funds to afford it. Need aid benefits those who actually need it. Not sure why folks who make that much think they need aid. Count your blessings.

they're not in a different class.

I've seen you post before about income vs assets and it's apparent you know .. a little. But it's easy to know more so let's do this!

Income varies quite widely btw schools but it can be somewhere between 22-47% of after tax income. Be sure to add back any retirement contributions into that income (eg income /= AGI).

Let's say you make 240: you'll pay 40-72k for college.

Then, parents are expected to pay 5.64% of their unsheltered assets annually. 529s are parent assets, if they're in the parents name (normal). Counted just the same.

so if you have 500k in assets: That's 28,200 a year to add to total.


if you have that 500k in retirement, you pay nothing. But what you can shift into retirement is limited by income so you're probably stuck here.

if you have another 100k in the kids 529: add $5640

Kids assets are hit at 20% so dont have that 529 in the kids name. Kids income is hit at 50% (After a set aside).

So you can see, this family is well into full price range.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:what does donut whole mean?? poor?

Too rich for financial aide, but too poor to pay out of pocket.

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.

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.

+1.

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 they want you to pay down all that savings. 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.

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.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:in DC area--$300k-450k is a donut hole family. 2 or more kids. SFHs run you $750k-2 million. COL is very high here.

LOL no. SFHs, investments, retirement savings, and OOS college tuitions are luxuries. You have to prioritize and choose, just like all the families who make less or way less.

Agree. A family making between 300-450k is not a donut hole family. We make in that range and we’ve saved money for our kids to go to college. One is in college now and the other will be next year. We won’t have quite enough from our 529 accounts, but we are able to cash flow the rest because we make enough money to do so.

Sure it is. We are in that range now (but were not always). We saved a lot but not enough to pay $65-80K/year. And while we CAN cash flow remaining, that will basically suck up every penny we have--quite literally-- if DC goes private and out of state (and we are also looking in state but acc to most of you on here we cannot and should not consider the Roanokes, Lynchburgs, etc.). And we do not live lavishly. Old cars that were cheap to begin with. No second home. Still in our starter home. Fly to vacation on miles accrued or stay driving distances.

After taxes and other necessities and being sucked dry for every little thing . . . . we are 1 medical emergency away from financial catastrophe. Something we came very near to actually incurring. So, yeah, I know some of you think this is living large at that salary. And maybe elsewhere it is. And it may be better than a lot and afford us a lot of comfort. But it's not rich and most certainly donut hole b/c we will get not once cent in aid. Anywhere.

This makes no sense. Where is all your money going. Why did you not save? You are rich.

Exactly. Unless you have unusual circumstances which you haven’t shared, you make plenty of money to pay for college.

Not the PP but I think it depends a lot on when income hit that range. Our HHI is roughly 350K. But three years ago it was 200K.

That’s true but we were saving a couple of thousand every month when we made a little over 200k.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:in DC area--$300k-450k is a donut hole family. 2 or more kids. SFHs run you $750k-2 million. COL is very high here.

LOL no. SFHs, investments, retirement savings, and OOS college tuitions are luxuries. You have to prioritize and choose, just like all the families who make less or way less.

Agree. A family making between 300-450k is not a donut hole family. We make in that range and we’ve saved money for our kids to go to college. One is in college now and the other will be next year. We won’t have quite enough from our 529 accounts, but we are able to cash flow the rest because we make enough money to do so.

Sure it is. We are in that range now (but were not always). We saved a lot but not enough to pay $65-80K/year. And while we CAN cash flow remaining, that will basically suck up every penny we have--quite literally-- if DC goes private and out of state (and we are also looking in state but acc to most of you on here we cannot and should not consider the Roanokes, Lynchburgs, etc.). And we do not live lavishly. Old cars that were cheap to begin with. No second home. Still in our starter home. Fly to vacation on miles accrued or stay driving distances.

After taxes and other necessities and being sucked dry for every little thing . . . . we are 1 medical emergency away from financial catastrophe. Something we came very near to actually incurring. So, yeah, I know some of you think this is living large at that salary. And maybe elsewhere it is. And it may be better than a lot and afford us a lot of comfort. But it's not rich and most certainly donut hole b/c we will get not once cent in aid. Anywhere.

This makes no sense. Where is all your money going. Why did you not save? You are rich.

Exactly. Unless you have unusual circumstances which you haven’t shared, you make plenty of money to pay for college.

Not the PP but I think it depends a lot on when income hit that range. Our HHI is roughly 350K. But three years ago it was 200K.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:what does donut whole mean?? poor?

Too rich for financial aide, but too poor to pay out of pocket.

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.

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.

+1.

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 they want you to pay down all that savings. 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.