Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If my income was $300k I would have zero problems being able to pay for my kid to go to an expensive, private college. You need a dose of reality

No necessarily true! 300k sounds a lot. But after tax, medical and retirement deduction, it is lucky if could take home half of it. With other kids to support, who can afford to use 50% of take home money paying for one kid’s college expenses?

Still not middle class - you live in the DC bubble, so you think anything under $1m per year is "middle class". GMAFB.

OP, many private sector people make less than you, stop trying to play martyr.

DP. Not sure if you live in the DC area but $300K income is not wealthy here. Yes, we live comfortably but with 2 kids, we're not going on European vacations every year and we certainly can't afford paying for Princeton tuition. Hoping my kids get into UMD.

Anonymous wrote:My wife and I are both gs14 fed employee with combined income around $300k pretax. This is quite common for middle class in dc area. We’re told not to bother filling up FAFSA or any financial aid since we won’t be qualified for anything so we won’t apply. Is it true for anyone in our situation?

Now, if kid gets into a private college with annual expenses 70k+, how middle class manages to pay for it without any aids or scholarships?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If my income was $300k I would have zero problems being able to pay for my kid to go to an expensive, private college. You need a dose of reality

$300k puts you in a 30% combined tax bracket if you live in MD, about 27% in VA. Don't forget, SALT deductions are limited, so you will probably take the standard deduction.

If you are 50+, you want to max out your 401k contribution and add the catch up extra $7500, which brings it to like $30K per person.

So, your income will look something like this:

1. 60K 401k (assuming both are 50+ and contributing the max, which you should at that income level)
2. taxes around $60K to $65K

That leaves you with 300K - 120k = $180k.

Let's say your annual expenses is something like $100K/yr in just expenses. You would have $80k left. But that just pays for room and board. Travel and other costs will rack up more. That's just one kid. Many of us have more than one kid who will be in college at the same time.

You will also not have any wiggle room for large emergency expenses or even vacation. If your car breaks down (like ours just did), you'd have to get a loan at 6% to 7%.

My DC is at the state flagship with some merit aid. We told this DC, who had super high stats, to not do ED at the expensive colleges. We cannot afford it, yes, even with $300K per year. It would leave us with so little wiggle room, that we'd be eating hand to mouth for the next 7 years -- we have two kids, and DH is 60. We have enough in the 529s for in state. That would barely cover 2 years of private.

I think you are the one who needs a dose of reality.

+1000

This is so true!

After completely maxing out my retirement accounts and paying for my very expensive housing in a fantastic school district I just don’t have anything left over!!!!!

Well I have 80k left over*, might as well be zero though.

* More net cash than the average American gross household income

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would like to hear more from UMC people about how College is a special consumer good where family income shouldn’t matter and the net price should be essentially zero when literally everything else in the world is allocated by family wealth, including “free” public school (you have to be able to afford to live in the district).

You thought it was fair when you bought your way into everything else in your lifestyle, well now welcome to the big leagues.

I don't think UMC families are saying that they should be given aid. Just lamenting that they cannot afford it, even if some insist that they can. Many of us have 529 accounts, but those funds didn't grow that much, even putting in more than $2500 per year per account, and we have multiple kids. It's enough for in state, but not 80k per year. When we started saving college was a bit cheaper. Several years ago, when my DC was in MS, we looked at an expensive private. It was $60K/year. Now it's closer to $85k per year. Saving $240k is doable. Saving closer to $350K is much harder.

If you still have 20 working years, I could see how you think you can afford to pull back on funding retirement, and save later, but if you are 55+, you don't have that luxury.

But, those if us at half your salary just don't get the lament. We saved $2500 a year per kid too. (Less when we were at a quarter of your salary). It sounds like we have similar savings, but with a lot less income. I hope people with younger kids read this and decide to set more aside.

Even that might be barely enough. 2.5K/year/kid for 2 kids over a period of 16 years gets you to ~160K in 529s and that is in a decently performing all equity portfolio. That is not nearly enough for 4 years at an expensive school for multiple kids. Tripling that level of saving and paying out of cash flow during the actual college years might get you there, but barely. And with college costs far outpacing inflation, even this won't be enough in the future.

Anonymous wrote:

Anonymous wrote:"300K in this area is middle class."

https://censusreporter.org/profiles/31000US47900-washington-arlington-alexandria-dc-va-md-wv-metro-area/

Though overstated, I think the point is that 25% of households earning $200k or more is a high percentage compared to most areas in the US.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would like to hear more from UMC people about how College is a special consumer good where family income shouldn’t matter and the net price should be essentially zero when literally everything else in the world is allocated by family wealth, including “free” public school (you have to be able to afford to live in the district).

You thought it was fair when you bought your way into everything else in your lifestyle, well now welcome to the big leagues.

I don't think UMC families are saying that they should be given aid. Just lamenting that they cannot afford it, even if some insist that they can. Many of us have 529 accounts, but those funds didn't grow that much, even putting in more than $2500 per year per account, and we have multiple kids. It's enough for in state, but not 80k per year. When we started saving college was a bit cheaper. Several years ago, when my DC was in MS, we looked at an expensive private. It was $60K/year. Now it's closer to $85k per year. Saving $240k is doable. Saving closer to $350K is much harder.

If you still have 20 working years, I could see how you think you can afford to pull back on funding retirement, and save later, but if you are 55+, you don't have that luxury.

But, those if us at half your salary just don't get the lament. We saved $2500 a year per kid too. (Less when we were at a quarter of your salary). It sounds like we have similar savings, but with a lot less income. I hope people with younger kids read this and decide to set more aside.

Anonymous wrote:"300K in this area is middle class."

https://censusreporter.org/profiles/31000US47900-washington-arlington-alexandria-dc-va-md-wv-metro-area/

Anonymous wrote:I am not fluent enough with the revamp to say yes or no - but I think it is worth for you to fill it out especially since it is supposed to be simplified.

If you go onto any school website, they should have a tool to forecast your net price. DO this to get a sense of what to expect from all schools your child is applying to

Anonymous wrote:

Anonymous wrote:I would like to hear more from UMC people about how College is a special consumer good where family income shouldn’t matter and the net price should be essentially zero when literally everything else in the world is allocated by family wealth, including “free” public school (you have to be able to afford to live in the district).

You thought it was fair when you bought your way into everything else in your lifestyle, well now welcome to the big leagues.

I don't think UMC families are saying that they should be given aid. Just lamenting that they cannot afford it, even if some insist that they can. Many of us have 529 accounts, but those funds didn't grow that much, even putting in more than $2500 per year per account, and we have multiple kids. It's enough for in state, but not 80k per year. When we started saving college was a bit cheaper. Several years ago, when my DC was in MS, we looked at an expensive private. It was $60K/year. Now it's closer to $85k per year. Saving $240k is doable. Saving closer to $350K is much harder.

If you still have 20 working years, I could see how you think you can afford to pull back on funding retirement, and save later, but if you are 55+, you don't have that luxury.

Anonymous wrote:

Anonymous wrote:I would like to hear more from UMC people about how College is a special consumer good where family income shouldn’t matter and the net price should be essentially zero when literally everything else in the world is allocated by family wealth, including “free” public school (you have to be able to afford to live in the district).

You thought it was fair when you bought your way into everything else in your lifestyle, well now welcome to the big leagues.

I don't think UMC families are saying that they should be given aid. Just lamenting that they cannot afford it, even if some insist that they can. Many of us have 529 accounts, but those funds didn't grow that much, even putting in more than $2500 per year per account, and we have multiple kids. It's enough for in state, but not 80k per year. When we started saving college was a bit cheaper. Several years ago, when my DC was in MS, we looked at an expensive private. It was $60K/year. Now it's closer to $85k per year. Saving $240k is doable. Saving closer to $350K is much harder.

If you still have 20 working years, I could see how you think you can afford to pull back on funding retirement, and save later, but if you are 55+, you don't have that luxury.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If my income was $300k I would have zero problems being able to pay for my kid to go to an expensive, private college. You need a dose of reality

$300k puts you in a 30% combined tax bracket if you live in MD, about 27% in VA. Don't forget, SALT deductions are limited, so you will probably take the standard deduction.

If you are 50+, you want to max out your 401k contribution and add the catch up extra $7500, which brings it to like $30K per person.

So, your income will look something like this:

1. 60K 401k (assuming both are 50+ and contributing the max, which you should at that income level)
2. taxes around $60K to $65K

That leaves you with 300K - 120k = $180k.

Let's say your annual expenses is something like $100K/yr in just expenses. You would have $80k left. But that just pays for room and board. Travel and other costs will rack up more. That's just one kid. Many of us have more than one kid who will be in college at the same time.

You will also not have any wiggle room for large emergency expenses or even vacation. If your car breaks down (like ours just did), you'd have to get a loan at 6% to 7%.

My DC is at the state flagship with some merit aid. We told this DC, who had super high stats, to not do ED at the expensive colleges. We cannot afford it, yes, even with $300K per year. It would leave us with so little wiggle room, that we'd be eating hand to mouth for the next 7 years -- we have two kids, and DH is 60. We have enough in the 529s for in state. That would barely cover 2 years of private.

I think you are the one who needs a dose of reality.

+1000

This is so true!

It's not your current income but what you've been doing for the last 18 years

Just gaming it out. A dual GS-15/10 Fed couple in the DC area, let's say, starting in 2007, after maxing their TSP contributions etc, puts aside 20K/year in 529s for two kids (which is 10-12% of their net take home). Even investing in a reasonably aggressive plan (Fidelity with a 7% growth rate net of expense ratios) only comes out to ~620K, which is just enough for 4 years of two T25 private school (or even U. Mich) costs. This calculation assumes a lot of things -- a reasonable mortgage (~3K/mo PITI), essentially no childcare costs, and common-sense expenses. So bottom line -- even for a family who is ostensibly well off like this one, with a tax-advantaged savings vehicle for college, a lot has to go right to be able to pay for a private college (e.g. Colorado College is $87K/year, U Mich is 80K/year). I am not sure how someone making half or two-thirds as much can save this amount.

Yes it is very challenging when selecting only the very most expensive schools for both kids with no merit aid at either one and also not paying anything out of cash flow and also no loans.

“Paying cash full tuition for twins at NYU no loans and we are a donut hole family” is not the scenario for 99.99% of people out there.

BTW if you are easily saving $20,000 a year every year without a serious lifestyle hit then paying off PLUS loans for your kids is going to be trivial, just apply that 20 large for a couple of more years post graduation, you have now bought a couple of extra years of “savings”.

Also if you live in the DMV and think Michigan Undergrad is really worth 2x(!) the cost of UVA or W&M or UMD I can recommend some really great mental health professionals.

All of the “gaming it out” is “you can’t actually afford it without some real sacrifice and even then it may not work”, there is no secret hack magic bullet other than extensive saving or picking a cheaper school or chasing merit.

I was the "gaming it out" PP. And that is exactly my point. The OP did say that they were a dual Fed (possibly in the DMV) and expressed consternation that affording a private was difficult. I just wanted to say that even in the most ideal of scenarios and with diligent saving, $80k/year is a stretch. Especially if you mess up choice of funds in the 529 (e.g. target date funds, many of the state run ones etc). I was just responding to the PP that blithely assumed that 300K income would mean that they would have zero trouble paying for an expensive private college.

Anonymous wrote:

Anonymous wrote:My wife and I are both gs14 fed employee with combined income around $300k pretax. This is quite common for middle class in dc area. We’re told not to bother filling up FAFSA or any financial aid since we won’t be qualified for anything so we won’t apply. Is it true for anyone in our situation?

Now, if kid gets into a private college with annual expenses 70k+, how middle class manages to pay for it without any aids or scholarships?

Unless you've large debt or several other kids in college, it's unlikely you'll get any aid. By filing FAFSA, you can get federal and parent-plus loans. As far as expensive colleges with no merit money, you go extremely frugal and you use your savings, bonuses, overtime, borrowings from 401K, home equity loan etc.

Anonymous wrote:I would like to hear more from UMC people about how College is a special consumer good where family income shouldn’t matter and the net price should be essentially zero when literally everything else in the world is allocated by family wealth, including “free” public school (you have to be able to afford to live in the district).

You thought it was fair when you bought your way into everything else in your lifestyle, well now welcome to the big leagues.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If my income was $300k I would have zero problems being able to pay for my kid to go to an expensive, private college. You need a dose of reality

$300k puts you in a 30% combined tax bracket if you live in MD, about 27% in VA. Don't forget, SALT deductions are limited, so you will probably take the standard deduction.

If you are 50+, you want to max out your 401k contribution and add the catch up extra $7500, which brings it to like $30K per person.

So, your income will look something like this:

1. 60K 401k (assuming both are 50+ and contributing the max, which you should at that income level)
2. taxes around $60K to $65K

That leaves you with 300K - 120k = $180k.

Let's say your annual expenses is something like $100K/yr in just expenses. You would have $80k left. But that just pays for room and board. Travel and other costs will rack up more. That's just one kid. Many of us have more than one kid who will be in college at the same time.

You will also not have any wiggle room for large emergency expenses or even vacation. If your car breaks down (like ours just did), you'd have to get a loan at 6% to 7%.

My DC is at the state flagship with some merit aid. We told this DC, who had super high stats, to not do ED at the expensive colleges. We cannot afford it, yes, even with $300K per year. It would leave us with so little wiggle room, that we'd be eating hand to mouth for the next 7 years -- we have two kids, and DH is 60. We have enough in the 529s for in state. That would barely cover 2 years of private.

I think you are the one who needs a dose of reality.

+1000

This is so true!

It's not your current income but what you've been doing for the last 18 years

Just gaming it out. A dual GS-15/10 Fed couple in the DC area, let's say, starting in 2007, after maxing their TSP contributions etc, puts aside 20K/year in 529s for two kids (which is 10-12% of their net take home). Even investing in a reasonably aggressive plan (Fidelity with a 7% growth rate net of expense ratios) only comes out to ~620K, which is just enough for 4 years of two T25 private school (or even U. Mich) costs. This calculation assumes a lot of things -- a reasonable mortgage (~3K/mo PITI), essentially no childcare costs, and common-sense expenses. So bottom line -- even for a family who is ostensibly well off like this one, with a tax-advantaged savings vehicle for college, a lot has to go right to be able to pay for a private college (e.g. Colorado College is $87K/year, U Mich is 80K/year). I am not sure how someone making half or two-thirds as much can save this amount.

Yes it is very challenging when selecting only the very most expensive schools for both kids with no merit aid at either one and also not paying anything out of cash flow and also no loans.

“Paying cash full tuition for twins at NYU no loans and we are a donut hole family” is not the scenario for 99.99% of people out there.

BTW if you are easily saving $20,000 a year every year without a serious lifestyle hit then paying off PLUS loans for your kids is going to be trivial, just apply that 20 large for a couple of more years post graduation, you have now bought a couple of extra years of “savings”.

Also if you live in the DMV and think Michigan Undergrad is really worth 2x(!) the cost of UVA or W&M or UMD I can recommend some really great mental health professionals.

All of the “gaming it out” is “you can’t actually afford it without some real sacrifice and even then it may not work”, there is no secret hack magic bullet other than extensive saving or picking a cheaper school or chasing merit.