<p>No flat-screens in our house … and I do not have a smartphone. Somehow, I do survive. Even so, it’s not that I don’t think people should have nice tv’s, newer phones, etc. It’s that I think every financial choice impacts the bottom line, whether it’s a cell phone plan, a car, a house, meals out, an island vacation, brand vs. generic, dance lesson vs. dance team, horseback riding, travel sports … none of these is necessarily a poor choice and none will bankrupt a family. But let’s think about it: If a family, beginning when their child is 10, spends $5,000 a year on things they don’t “have” to spend it on, they will have spent $40,000 by the time the kid is 18. Now let’s say they put that $5,000 in the bank, instead. Interest rates are low, but just the same - they have $10,000/year saved for college. Because they are used to saving the $5,000/year, they really have $15,000/year for college. That will go a long way toward paying for college. </p>
<p>That’s exactly it. Which is why it was so silly upthread to focus on the one example that got hyper-focus, because it was ILLUSTRATIVE of a bigger picture. It’s not the cell phone or the cable TV in and of itself - it’s about not just automatically “living up to your means.” I am picking up the pieces right now for a family member who lived up to and beyond her means, and it is super frustrating that she “has no money” when I can point to a dozen choices she made. </p>
<p>I think the article missed an opportunity to examine options for families who haven’t saved. Military, Community colleges, programs such as Garyjobcorp that provide free room/board/training including some community college, colleges that have school one semster/ paid coop the next, small directional universities, nonprofit online universities… there are many low cost options if you hunt them out. </p>
<p>@kgos16 - My FIL was a college professor and because he received free tuition for his kids all three of them went to the college he taught at. My BIL is currently a college professor with free tuition for kids. So all three of my nieces are/will be attending college that he teaches at. They decided long ago that they weren’t going to pay for tuition at a different college when the kids could go free. Are the colleges good? Yes however it’s kind of a bummer that they didn’t get a choice. Also depending on how big of a college you are talking about you could end up running into your mom/dad on a regular basis or they may know your professors and how you are doing in your classes. For some kids that’s fine. However for others college is a chance to go off on their own. I’d save for college and allow your kids to decide where they want to go.</p>
<p>^^
And your nieces still have that option (to go elsewhere) they just don’t have parents willing to pay for it. They could still get scholarships, join the military, play a sport, see if there is tuition exchange. Most kids don’t have the entire college world to choose from, and these kids had a much smaller selection. However, they had a better deal than a kid whose family saved nothing and could not offer full tuition.</p>
<p>The issue will be convincing H to let the kids go elsewhere…the population is about 6,000, so large enough that they won’t be running in to me. I work in financial aid, so I don’t typically interact with professors - other than the engineering profs who go to the school’s cycle class. I think I will go the route of what twoinanddone suggests - sure, they can go elsewhere, but they will figure out who to pay for it! </p>
<p>@kgos16 --It sounds like you work in higher education. If it is at a private college, have you checked whether there is a reciprocal tuition exchange with other colleges? There are lots of rules about these, but they do exist.</p>
<p>Flat screen TV is a necessity for me. I can barely watch movies on the old TV because of my weak eyes. Flat screen TVs are not expensive these days. They also save electricity bill. People can save a lot of money from not buying these things: Starbucks coffee, fancy dinners, fancy hotels, high class cars,… </p>
<p>@Picapole I work in financial aid at a private, and we do have tuition exchange - however it is not a guarantee. There has to be an certain number of qualifying students participating in the program coming to our university for a staff member’s child to head to another school. </p>
<p>This seems like a really limited discussion. I wonder for how many households in this country it’s the little luxuries like smartphones and flat-screen TVs that make the difference between being able to afford college or not. Aren’t there many more families for whom smartphones and the latest in entertainment technology are already out of reach? And many more who did save on those things, but their savings went to things like unexpected medical bills, helping a dependent relative, etc.? And others who did eliminate some luxuries – but they, like the rest of us, had no idea that college costs would skyrocket to the price they’re at today, so they just didn’t save quite enough to pay for their EFC?</p>
<p>And of course, on the other side, there are also plenty of families who not only didn’t scrimp on smartphones, they blew tens of thousands every year on European vacations or luxury cars or extensive remodels of their home or backyard. Those are the people it’s really easy to judge - and yet, who’s to say that their kids will benefit more from being able to attend a pricey college than they did from seeing Paris or Brazil?</p>
<p>The real question is whether college costs should be so high that less-than-wealthy families have to scrimp and save all their kids’ lives in order to be able to send them. Or, alternatively, whether a college degree should be something that is necessary to get a job that can support a middle-class lifestyle. I do not think that it’s good for our society to have so many families pouring so much of their take-home income, over a period of decades (whether through saving ahead of time or paying off loans afterwards) into this one economic sector.</p>
<p>my two cents…</p>
<p>The old social contract where federal and state support covered a larger portion of the costs of public college access
has been changing for some time. Historically, this proportion has been significantly re-balanced a number of times (e.g., the Morrill Act, GI Bill). We have moved into an era where individual families and students will likely, for at least the near term, have to pay a higher proportion of costs of public college access. This interacts with current economic conditions where many families and communities have not fully recovered from the last recession. </p>
<p>The rise in tuition and college costs has certainly exceeded general rate of inflation in rest of society. Although, it is not as extreme or illogical as we often think because of several factors: (i) the dominant tuition discount model, where there are large gaps between posted sticker prices and price any individual student pays, that has emerged muddies the picture; (ii) we would expect costs of high skill human capital accumulation to have a higher rate of cost increase than prices in the economy as a whole; and (iii) as noted above, the federal and (perhaps especially) state gov’t sectors are picking up a smaller proportion of the costs, and moving a greater proportion of the costs onto the buyer (individual families and students). It is not so easy to just blame schools then, as this has been greatly impacted by the social and political choices prevalent over a long period of time (and which may always re-balance again).</p>
<p>Yet, the rate of return on education remains very high, but also highly variable by both the choice of major and the type of school a student earns their degree at.</p>
<p>Higher education options and pathways have continued to grow and we have expanded access, but they are highly variable in their quality and their returns, which will likely be difficult to judge for many families</p>
<p>The implications are that many families will find themselves without having the needed savings for many of the options possible. A large proportion of those will take on much higher debt burdens than they expected, some will have to explore options and paths they didn’t expect to in order to access higher education, and there will be lots of combinations in between. In the past, when the gov’t sector covered a higher proportion of costs, much of risks of higher education choices were being subsidized (and whether or not, and at what level that is justified will always be one of the difficult choices a modern society confronts). </p>
<p>But for families that haven’t saved, or saved enough, to cover college costs, I think the mindset has to move more and more towards avoiding family discussions of dream schools, and towards discussions of the full range of options available, the expected risks and returns of different options or paths, and having young adults understand what part of the equation becomes their responsibility. The expected debt burden means that these will be more difficult discussion then many families will have anticipated. And finally, even if we as a society have chosen to support a lower proportion of costs of public college access, I would venture that we might increasingly have a social responsibility to make sure families can access the help they need in making difficult risk-and-return decisions for themselves and their children. To end on a pragmatic recommendation, I think there are some books out there, like “Right College, Right Price”, and a variety of others, that do a pretty good job with this.</p>
<p>^^^^Very solid post.</p>
<p>I will add a couple comments.</p>
<p>Growing up, my Dad drilled into me the following: Learn to live on 80% of your income, and save the rest. It takes discipline, but just consider that other 20% as if it doesn’t even exist.</p>
<p>Smart advice.</p>
<p>Second comment, and this is observational/anecdotal: I have been in plenty of poor areas in this country, and it never ceases to astonish me that you can literally have people living in dilapidated shacks, but they have Direct TV antennas on the outside, and huge TV’s and Playstations on the inside. </p>
<p>Fortunately, we live in a free country where people can spend their money how they want, but I must admit I am shaking my head when I see that.</p>
<p>This reminds me of the discussion about poverty in the late 19th century. A new branch of applied math had been “discovered”, statistics for social science, and researchers went out to figure out why people were poor and stayed poor. The assumptions, at the time, was that they blew their money on non-essentials or downright silly or sinful products (drink, shiny baubles) and had a sort of natural inability to save. They found that people were poor even though mos worked; when they didn’t, it was for a reason; poverty was due, in priority, to illness (medical fees, pay loss) and unemployment; that the wages weren’t living wages, let alone allowing to save anything; that some of the “un-necessary” expenses, such as buying street food rather than cooking at home, were not choices per se (cheap rooms didn’t have a kitchen or cooking ustensils, so it was impossible to cook), and finally education meant postponing earnings that were needed to save some children from starving (examples were given of a family where toddlers and babies only had one set of clothes, which rotated between them while the others went naked, for instance); added research showed an inability to conceive the future because the present itself was too curtailed.
I think this applies for many “Pell” families. I also recommend reading both <em>Hold Fast to Dreams</em> and <em>A Hope in the Unseen</em>.
Additionally, the issues above appear to apply to many middle class families: they saved for college, but someone got sick or lost their job, and everything spiraled down.
Same as above: The dilapidated shack may bea landlord’s, who doesn’t see fit to spruce it up, and when the flat screen TV went on sale, why not buy it and at least make the inside hospitable? (Not saying it was a smart choice, just that for the person buying, it may have made sense, even if for the person outside, it doesn’t.)
Re: smartphone - where I live, you can’t really buy non-smart phones (except the “senior citizen” model with large keys).</p>
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<p>So what, exactly, are the poor allowed to have? People complain if poor people have nice cars, name brand clothes, more than the basic staples in their grocery carts, video game systems, or cell phones. The poor don’t exist in a vacuum, you know. Relatives who are doing well have been known to pass down cars to less fortunate family members. Brand name clothes can be purchased fairly inexpensively at Goodwill, and if you clip enough coupons it’s generally possible to squeeze out enough savings for a treat or two at the grocery store. Video game systems and other electronics can be purchased on ebay or at yard sales, and cell phones are passed down from well-to-do family members to those who are struggling financially. The poor are no less deserving of those things than the self-described middle class is to whatever it is they’re spending their money on. I wonder if the way some of the middle class feels about the poor is how the well-to-do feel about the middle class and their attempts to acquire a $60k/year education. You’re far too poor to have anything so nice isn’t a very pleasant sentiment.</p>
<p>I don’t care to have this devolve into a political discussion. As I clearly indicated, we live in a free country, and people can spend their money as they want…but I personally am astonished at some people’s priorities, and that was what my observation was intended to convey.</p>
<p>The living on 80% is, IMO, very sound advice for anyone, regardless of income class.</p>
<p>^ I got the 80% advice from my father also, but he wasn’t paying 50% of his income to the taxman and gas was $0.69 per gallon. He never paid an internet bill - tell me can you even apply to college these days without an internet connection/computer. Oh yeah, go down to the library and use the free one there - oh wait, they shut down the library due to budget cuts. We’ll just take the bus to the next library over - oh wait, they shut down the bus service due to budget cuts. =)) </p>
<p>Wow, now we’re judging people who live in shacks for daring to own Playstations and flat screen TVs? </p>
<p>Never mind the expensive toys. Lets judge them for the $7 a pack cigarettes that make them and their babies sick and drive up their health care costs (and ours if it’s paid by Medicaid.) That’s an ongoing cost. Gotta focus on the right stuff.</p>
<p>Now it’s too late to edit, but wanted to add, hope it’s clear my post is tongue in cheek. Don’t excoriate me, please.</p>
<p>I’m a single parent, I make less than $40,000 a year and I live in a high cost of living state (CT). I have had years where I could not save for college because there just wasn’t any money left over after paying rent, electricity, water, heat, phone bills, and also grocery shopping, medical expenses, gas for the car. I have saved a little in a 529. My EFC is not zero, and it doesn’t matter even if wasn’t, because I know some of her schools will offer financial aid that includes a big fat PLUS loan from me, which I really can’t afford to take on. I would much rather be in the shoes of full-pay parents. </p>