Anonymous
Post 03/27/2024 12:10     Subject: Re:Donut hole reality
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Having been through this process, and saved quite a bit towards college, we still chose public school as do many people in our financial situation. The biggest problem with the belief that "donut reality" means being shut out, is letting rich people convince you that expensive is better. Despite what US news claims, in reality, a kid can have the fabulous life and a quality education and not deplete their parents of every cent they saved, plus take on debt and undue stress, for an undergrad degree.


And they should stop reading this forum and the private school forum immediately .

So many prestige strivers. We had kids get into top 10 schools, but with no aid and enough in 529 to fully cover in-state tuition. They chose the in-state option.

Frankly, the tables are turning. More and more high stat UMC families are no longer paying for private/ivies. The top in-state schools are getting stronger and stronger as a result. Add in the fact that many top employers have stated that they would rather have a top state college kid than many of the Ivies and you really are going to see a shift.

The high cost of tuition has reached a tipping point. It seems $85-90k is it. It will be six-figures a year for privates by the time a Freshmen makes it to Senior year.

Now you only have the poor and the uber rich at Ivies which is an awful dynamic, but mirrors the US.


Plenty of people keep making this statement...please, list the "top" employers.

Even the alums of Ivy schools such as Bill Ackman (Harvard), Marc Rowan (Penn) et al that are upset with their alma maters, have not stopped hiring the grads (that are not part of any "extreme" student organizations).


+1

And here's the thing: Whether we acknowledge it or not, there are leadership positions including e.g. as a SCOTUS Justice which basically require an Ivy League degree, or a degree from a same-caliber school. Those positions are a minority of the job market, but they exist.

As a PP pointed out, several decades ago anyone could pay for a degree from an elite school by working summers, taking out some modest loans, budgeting carefully. Had higher education costs kept pace with inflation, HYP and similar schools would cost about $30K/year today - expensive for sure, but doable for middle and upper-middle class families with some belt-tightening. This isn't the case however: These schools now cost $85K+ and are inaccessible to most families no matter how much beans and rice they eat.

What changed? Reagonomics. In the 80s, legislatures decreased funding for state schools and they began to cost more out of pocket for the students. Private schools followed suit. The bar is set by public colleges and universities, so when they increase tuition due to decreased government funding, so too do private schools.

https://www.salon.com/2014/07/05/ronald_reaga...lesson_no_one_tells/

https://truthout.org/articles/the-cancer-stage-of-reaganomics/

https://www.savingforcollege.com/article/hist...e-bennett-hypothesis

It's true that other options exist. It's also true that even these other options put financial stress on families, and that realistically, other options probably won't take a student to where they want to go if the goal includes certain jobs, because of the class system that exists in the US - the one we pretend doesn't exist.

People are angry because it didn't used to be this way, and doesn't have to be this way.


No an undergrad IVY degree is not required---it's the Law degree. And you can still get into top law schools from any other school. However given that there are only 9 SCOTUS justices and they are appointed for life, the odds of your kid getting this job are slim to none.
But if you want to be an elite judge, yes you need to aim for a T10 law school. And there are plenty of kids who get there from non-ivy undergrads.
Anonymous
Post 03/27/2024 12:07     Subject: Donut hole reality
Anonymous wrote:
Anonymous wrote:People who claim donut hole and are angry that they only have 130k in an account —are you also stomping your feet that you can’t afford the 2M mansions in the other town? Do you ping away at what you cannot have? Or are you happy that you have a good home in a solid town. Because you are indeed able to afford a good education via state universities. I swear college admissions is the only area where this nonsense comes into play. For everything else in life you buy what you can afford in your budget and move one. Why do you think you are entitled to a high priced private college. You have 100s even 1000s of colleges available to you via public universities.


It’s because so many selective colleges have policies where incomes under $150k students can attend free. Or under $200k, students qualify for need-based aid, and so on.

“Donut hole” (terrible name) is this window of income that puts you above need-based aid, but not enough to save as much as you’d had hoped.

The people who use the term tend to be jerks so it’s understandable why they’re disliked so much, but so many regular people fall into this category. They are stretched with housing, retirement, elder care, college savings, inflation and on and on. And yes, our kids end up going to public colleges or community schools, and doing ok. But, as a policy matter, it does sting that someone earning just a bit less than you qualifies for aid. I know there’ll be someone who says “well then earn less!” 🙄 there’s always a rebuttal to everything, but that’s the honest answer.


So instead of focusing on all the advantages you and your kids have had in 18+ years because of you"earning more" you focus on--"it's not fair, they are poor and get more help". Fact is it's only 25-30 colleges that provide "nearly full tuition/R&B" for those with need. Outside of that, the majority of the "below donut hole level" are attending CC and then onto local 4 year---by local I mean they live at home to save on R&B. or starting at local 4 year. But the dream of going away to college for 4 years to anywhere that isn't in state is simply not on their radar.

Fact is universities can choose to admit and provide aid as they see fit. Majority offering great FA are Private universities.

Fact is most of these universities are Highly rejective, rejecting 90-95% of those applying. So the odds of your kid getting in were slim to begin with. So stop being entitled and find a great college that is affordable. My "high stats kid" (1480/3.98UW) got into 2 Top 50 with merit that Brought cost down from $80K+ to about $40K. You don't "have to step down much" to get the merit/aid.



Anonymous
Post 03/27/2024 12:00     Subject: Re:Donut hole reality
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Having been through this process, and saved quite a bit towards college, we still chose public school as do many people in our financial situation. The biggest problem with the belief that "donut reality" means being shut out, is letting rich people convince you that expensive is better. Despite what US news claims, in reality, a kid can have the fabulous life and a quality education and not deplete their parents of every cent they saved, plus take on debt and undue stress, for an undergrad degree.


And they should stop reading this forum and the private school forum immediately .

So many prestige strivers. We had kids get into top 10 schools, but with no aid and enough in 529 to fully cover in-state tuition. They chose the in-state option.

Frankly, the tables are turning. More and more high stat UMC families are no longer paying for private/ivies. The top in-state schools are getting stronger and stronger as a result. Add in the fact that many top employers have stated that they would rather have a top state college kid than many of the Ivies and you really are going to see a shift.

The high cost of tuition has reached a tipping point. It seems $85-90k is it. It will be six-figures a year for privates by the time a Freshmen makes it to Senior year.

Now you only have the poor and the uber rich at Ivies which is an awful dynamic, but mirrors the US.


And it's crazy. We drive only Hondas. We have one that is a 2006, in addition to a 2020. We aren't wearing fancy clothes or traveling to Europe. Travel sports are the biggest expense.


Yeah, middle class kids aren't doing "Travel sports". That is typically $5-10K+ per year. So see, you could have easily saved $5-10K/year for college, you chose not to. Most rec sports do not cost more than $500/year.

Anonymous
Post 03/27/2024 11:59     Subject: Donut hole reality
Anonymous wrote:
Anonymous wrote:People who claim donut hole and are angry that they only have 130k in an account —are you also stomping your feet that you can’t afford the 2M mansions in the other town? Do you ping away at what you cannot have? Or are you happy that you have a good home in a solid town. Because you are indeed able to afford a good education via state universities. I swear college admissions is the only area where this nonsense comes into play. For everything else in life you buy what you can afford in your budget and move one. Why do you think you are entitled to a high priced private college. You have 100s even 1000s of colleges available to you via public universities.


It depends.Are the sellers offering the same $2 million mansion to my underemployed screen writer neighbor for $250,000?


So in reality, you are annoyed that some really smart kid who has had a much harsher/difficult life for the last 18 years is getting an opportunity to break out and greatly improve their life. An opportunity that for them will drastically change their life and mean your tax dollars may not have to help support them (and by default some of their family) in the future.
You could choose to live with only $75K income in DC for 18 years and then you and your kid would also have that opportunity.

Or you can take the many advantages you have had in life (if you are "donut hole" you live better than 90% of people in USA) and recognize that. And instead be mad at yourself that you chose not to save for what you want, when you did have the opportunity.



Anonymous
Post 03/27/2024 11:54     Subject: Donut hole reality
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:People who claim donut hole and are angry that they only have 130k in an account —are you also stomping your feet that you can’t afford the 2M mansions in the other town? Do you ping away at what you cannot have? Or are you happy that you have a good home in a solid town. Because you are indeed able to afford a good education via state universities. I swear college admissions is the only area where this nonsense comes into play. For everything else in life you buy what you can afford in your budget and move one. Why do you think you are entitled to a high priced private college. You have 100s even 1000s of colleges available to you via public universities.


It depends.Are the sellers offering the same $2 million mansion to my underemployed screen writer neighbor for $250,000?


Excellent point.


It is an excellent point. Let’s assume that it’s true and your underemployed screen writer friend is indeed able to live a $50K lifestyle in a $2M mansion.

Guess what? If you limit all your non-mortgage spending to $50K out of your $250K income, you too could buy that mansion. And live like a king on your $50K, exactly as your neighbor would.
Anonymous
Post 03/27/2024 11:53     Subject: Donut hole reality
Anonymous wrote:We have three kids who will be in college at the same time. With the new FAFSA rules on siblings, we are now a donut hole family. When they were younger and we had three in daycare, we made much smaller salaries, but now we make enough that if they don't consider siblings we don't get any financial aid.

We have been saving at least something every month since they were born towards college....some months it was $20 a kid, some months it was $1,000 a kid. We'll have saved about $130K per kid for college. Which is a huge amount, but not enough for most non-state schools. Which is ridiculous.


Go with CSS schools. Most still consider siblings
Anonymous
Post 03/27/2024 11:51     Subject: Donut hole reality
Anonymous wrote:People who claim donut hole and are angry that they only have 130k in an account —are you also stomping your feet that you can’t afford the 2M mansions in the other town? Do you ping away at what you cannot have? Or are you happy that you have a good home in a solid town. Because you are indeed able to afford a good education via state universities. I swear college admissions is the only area where this nonsense comes into play. For everything else in life you buy what you can afford in your budget and move one. Why do you think you are entitled to a high priced private college. You have 100s even 1000s of colleges available to you via public universities.


The level of entitlement is astounding. Also kind of funny when in reality they are complaining about schools where their kid is most likely not getting admission, as the rates are sub 10% acceptance rates.

Nobody is entitled to an elite education. We do have many many affordable ways to get a college education. CC to 4 year state school, in-state 4 year from start, private schools (with good merit many times), OOS schools with merit, and very expensive private schools.
You go where you can afford. Your kid will get a great education most places. Pick one within your budget and move on.
Anonymous
Post 03/27/2024 11:48     Subject: Donut hole reality
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:We hired a financial planner when DC was born 13 years ago. We were told that when DC is 18 that a 4-year private college would be about $500k. Could not believe it then, but looks like that is accurate. Crazy.


Yep. We are financial planners and opened up 529 accounts before our kids left the hospital. $500 a month until daycare / preschool costs were done and then $1200 w month per kid thereafter. We drive 10 year old cars. Also max out retirement contributions. We spend on vacations but not material goods ( I do not have any expensive purses or shoes and shop at Marshall’s and Kohls).

We have $400k for each kiddo saved.


As financial planners you should understand the concept of risk. At birth you were confident both of your children would attend private 4-year universities? Your plan actually seems like overkill.


Financial planners???! Your opportunity costs were insane! You missed out on an incredible market run. You could have a millions in stocks now if you hadn’t overfunded the 529s!!


Our 529s are in the market, and were in high risk/full stock funds until kids were 1-2 years before college. We got that growth (DP).
Anonymous
Post 03/27/2024 11:47     Subject: Donut hole reality
Anonymous wrote:Must be nice to have $2400/month to put into accounts for college.

Not everyone has that kind of income


But if you paid for daycare, you likely could continue to funnel it all (or 75%+) into 529s. If you wanted. It's a choice
Anonymous
Post 03/27/2024 11:47     Subject: Donut hole reality
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:We hired a financial planner when DC was born 13 years ago. We were told that when DC is 18 that a 4-year private college would be about $500k. Could not believe it then, but looks like that is accurate. Crazy.


Yep. We are financial planners and opened up 529 accounts before our kids left the hospital. $500 a month until daycare / preschool costs were done and then $1200 w month per kid thereafter. We drive 10 year old cars. Also max out retirement contributions. We spend on vacations but not material goods ( I do not have any expensive purses or shoes and shop at Marshall’s and Kohls).

We have $400k for each kiddo saved.


As financial planners you should understand the concept of risk. At birth you were confident both of your children would attend private 4-year universities? Your plan actually seems like overkill.


DP: not at birth. But certainly by age 5 and age 10 you have a really good idea. By age 5 you know if there are major health/educational issues. By 10 you have a clue if you have a "striver aiming for T50 schools" or a mostly A/Bs but aiming for 50-150+ schools or even lower. Sure that could change a bit, but you likely have a clue.
We knew our first was not attending a T50 school---kid hated school, struggled with learning issues, smart but ADHD boy with anxiety and learning/reading issues. So we planned for UVA OOS/mid level pricing for privates or OOS---our FA plan was spot on. We cut back savings and if they hadn't gotten merit the 529 would have been exactly enough for college. Attended a T80 with merit and now has $50K for grad school. Had we wanted to, we could have withdrawn it for the merit and just paid taxes on growth (no penalty) and the 529 would be $0 now.
next kid it was obvious they were next level smart (book smart) and striver and would have a shot at T25 school if they wanted. So we saved for $80-85K/year (they are junior now). Full pay at T30, we will need to cash flow ~$15K for the last semester.

Had kids cost less at college, we would leave the $$$ in for their grad school or future grandkids---and let the tax free growth continue for the next 20-25 years.
Anonymous
Post 03/27/2024 11:45     Subject: Re:Donut hole reality
... including e.g. as a SCOTUS Justice (Amy Coney Barrett notwithstanding)
Anonymous
Post 03/27/2024 11:44     Subject: Re:Donut hole reality
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Having been through this process, and saved quite a bit towards college, we still chose public school as do many people in our financial situation. The biggest problem with the belief that "donut reality" means being shut out, is letting rich people convince you that expensive is better. Despite what US news claims, in reality, a kid can have the fabulous life and a quality education and not deplete their parents of every cent they saved, plus take on debt and undue stress, for an undergrad degree.


And they should stop reading this forum and the private school forum immediately .

So many prestige strivers. We had kids get into top 10 schools, but with no aid and enough in 529 to fully cover in-state tuition. They chose the in-state option.

Frankly, the tables are turning. More and more high stat UMC families are no longer paying for private/ivies. The top in-state schools are getting stronger and stronger as a result. Add in the fact that many top employers have stated that they would rather have a top state college kid than many of the Ivies and you really are going to see a shift.

The high cost of tuition has reached a tipping point. It seems $85-90k is it. It will be six-figures a year for privates by the time a Freshmen makes it to Senior year.

Now you only have the poor and the uber rich at Ivies which is an awful dynamic, but mirrors the US.


Plenty of people keep making this statement...please, list the "top" employers.

Even the alums of Ivy schools such as Bill Ackman (Harvard), Marc Rowan (Penn) et al that are upset with their alma maters, have not stopped hiring the grads (that are not part of any "extreme" student organizations).


+1

And here's the thing: Whether we acknowledge it or not, there are leadership positions including e.g. as a SCOTUS Justice which basically require an Ivy League degree, or a degree from a same-caliber school. Those positions are a minority of the job market, but they exist.

As a PP pointed out, several decades ago anyone could pay for a degree from an elite school by working summers, taking out some modest loans, budgeting carefully. Had higher education costs kept pace with inflation, HYP and similar schools would cost about $30K/year today - expensive for sure, but doable for middle and upper-middle class families with some belt-tightening. This isn't the case however: These schools now cost $85K+ and are inaccessible to most families no matter how much beans and rice they eat.

What changed? Reagonomics. In the 80s, legislatures decreased funding for state schools and they began to cost more out of pocket for the students. Private schools followed suit. The bar is set by public colleges and universities, so when they increase tuition due to decreased government funding, so too do private schools.

https://www.salon.com/2014/07/05/ronald_reaga...lesson_no_one_tells/

https://truthout.org/articles/the-cancer-stage-of-reaganomics/

https://www.savingforcollege.com/article/hist...e-bennett-hypothesis

It's true that other options exist. It's also true that even these other options put financial stress on families, and that realistically, other options probably won't take a student to where they want to go if the goal includes certain jobs, because of the class system that exists in the US - the one we pretend doesn't exist.

People are angry because it didn't used to be this way, and doesn't have to be this way.
Anonymous
Post 03/27/2024 11:43     Subject: Donut hole reality
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:The way siblings are calculated for financial aid completely changed. We have kids one grade level apart. We always thought our oldest might be interested in a gap year so we really thought we would have two kids in college during the same 4 year period.

That is what we planned for and unfortunately for us the way financial aid is calculated has completely changed and we are now expected to pay double what we thought, which we are unable to do. So sometimes you plan but the parameters fundamentally change. So if you have multiple kids in college and are expecting some aid, start calculating again.


This. I think it's disgusting that FAFSA changed this.


No, it’s fair. You should not get rewarded for multiple kids.


Ah the elitist who believes only the very wealthy should have children.
Glad my parents who had 7 didn’t listen to you. My dad was a lot better father than Bill Gates.


You can choose to have how ever many kids you want. But it is your responsibility to take care of them, not the government. If you cannot afford 7 then have less. And I include the cost of college as part of "affording kids". It's not my job to pay taxes so you can have more kids than you can afford


A poor kid from a family of 7 is going to college for free. Your post makes no sense.
Anonymous
Post 03/27/2024 11:41     Subject: Donut hole reality
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:The way siblings are calculated for financial aid completely changed. We have kids one grade level apart. We always thought our oldest might be interested in a gap year so we really thought we would have two kids in college during the same 4 year period.

That is what we planned for and unfortunately for us the way financial aid is calculated has completely changed and we are now expected to pay double what we thought, which we are unable to do. So sometimes you plan but the parameters fundamentally change. So if you have multiple kids in college and are expecting some aid, start calculating again.


This. I think it's disgusting that FAFSA changed this.


No, it’s fair. You should not get rewarded for multiple kids.


Ah the elitist who believes only the very wealthy should have children.
Glad my parents who had 7 didn’t listen to you. My dad was a lot better father than Bill Gates.


You can choose to have how ever many kids you want. But it is your responsibility to take care of them, not the government. If you cannot afford 7 then have less. And I include the cost of college as part of "affording kids". It's not my job to pay taxes so you can have more kids than you can afford
Anonymous
Post 03/27/2024 11:38     Subject: Donut hole reality
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:The way siblings are calculated for financial aid completely changed. We have kids one grade level apart. We always thought our oldest might be interested in a gap year so we really thought we would have two kids in college during the same 4 year period.

That is what we planned for and unfortunately for us the way financial aid is calculated has completely changed and we are now expected to pay double what we thought, which we are unable to do. So sometimes you plan but the parameters fundamentally change. So if you have multiple kids in college and are expecting some aid, start calculating again.


This. I think it's disgusting that FAFSA changed this.


No, it’s fair. You should not get rewarded for multiple kids.


But if people are supposed to be saving from birth, then people with already-born kids are in trouble with this change, and may not have time to catch up.

My kids are 5 years apart (we literally couldn't afford 2 in day care at the same time, much less college), so I have no dog in this fight, but it's very obvious to anyone how huge a change this is.


My kids are 4+ years apart, partly so that only 1 would be in college at the same time. Some of us do plan for these things. Others have 3 kids under 4 and that means mostly having 2+ in college at same time (and at least 1-2 years with 3). If you choose that, you need to plan and save.