<p>As an addendum to Snowmn's post, I had this article from the Harvard Magazine talking about how tough it is on the middle class and how the middle class of today is actually worse off than their counterparts 30 years ago, even with two incomes.</p>
<p>With (Harvard) college tuition ten times what it was 30 years ago ($3590 vs $30,275) and the middle class with less disposable income today than 30 years ago, where does that leave the average American family?</p>
<p>"Our EFC is approximately $17,000 "</p>
<p>With that EFC most IVY's would have filled the void. A state school would cost about that much.</p>
<p>D accepted by Duke - financial aid offer left a gap of $25,000. This would all be borrowed money except for work-study and what D could earn. Duke stated that it met 100% of need, but counts subsidized Perkins and Stafford loans as aid, as did many of the other privates she applied to. Also, outside scholarships were subtracted from these awards. She didn't bother to apply to an Ivy as we knew we couldn't afford even the EFC (plus she wanted warmer weather!), and I've seen nothing that indicates that ANY Ivy goes beyond the EFC on merit aid unless there are special circumstances. Since the Profile counts equity in house and looks at retirement savings, we are no better off than with the FAFSA.</p>
<p>Applied to Duke because of possible merit scholarship, which she didn't get. </p>
<p>And no, a state school doesn't "cost about that much" for a student who has merit aid. Especially if that student can live at home or qualifies for National Merit. Both my kids got full rides on National Merit. Let's see - $0 versus $100,000 each. Plus outside scholarships are not subtracted from the award, allowing for study abroad. No-brainer.</p>
<p>Now if you're talking about a kid who gets nothing in merit aid - sure, an Ivy would be much closer in cost to a public school if the kid's not living at home, didn't get a penny from the school and if the cost of attending an Ivy was only the EFC (a lot of ifs). </p>
<p>I'm not against Ivies or the "top tier" privates - just don't think for us (and a lot of families) that the cachet is worth huge loans. A lot of these students will continue to excel and get into the same top graduate schools, but the bonus is that they aren't going to be saddled with a large undergraduate debt. I think the key is to find a public school that has a proven track record in the particular program in which the student is interested and has a vibrant Honors program.</p>
<p>Snowmn, I agree that things have gotten tougher for the middle class, and every one of your examples is on target. A census analysis released last week concluded that - for the first time - the inflation adjusted average income of a man aged 30 has actually declined over the past three decades. And the expenses and lost safety net you referred to - pensions, cost of college and health care, etc., - have all gotten steadily worse.</p>
<p>Still ---- it was predictable that the cost of attending college on campus (i.e. not as a commuter living at home) was going to be in the $15-$20K per year range when our kids were growing up. I recognize that conventional wisdom (pushed in popular money management columns) is to save for retirement and have your kids borrow for college, but I just wasn't up for that. Hey - look on the bright side - I stayed in California and I'm paying interest on mortgages that are twice what your house is worth, and I can't afford to move - or retire - either. And my kids didn't get full ride offers anywhere. :(</p>
<p>THIS IS THE FUNNIEST THING I'VE HEARD TODAY: QUOTING A STATEMENT FROM ABOVE...TOKENADULT: "Middle class persons of all incomes can definitely afford to go to Harvard, Yale, or Princeton IF they are admitted. "</p>
<p>this makes absolutely no sense.</p>
<p>There is nothing funny about what tokenadult has said. legendofmax and countless others said the same thing. You just were not listening.</p>
<p>Hey - I'm not complaining. We knew full well what it would cost to finance an education for the kids, but we had a backup in that hubby works for a state college that offers free tuition for children. So worst case scenario was that they'd live at home and get free tuition. Knowing that, we chose to fund retirement. We're thankful beyond measure that the National Merit program gave our kids choices, although I have to say that we worked long and hard on practice PSAT's to make it happen.</p>
<p>I'm just saying that I think there are a lot of people out there who have been living within their means without a lot of luxuries who just have not been able to save the amount that it would cost their kid to go to an Ivy, and that I don't think people on this forum should be making assumptions about why they lack substantial college savings. They had a plan and followed sound advice and now can't afford to send their kids to the college of their choice. </p>
<p>I'm also not (like some) whining that my kids "deserve" a free Ivy education just because they could get into an Ivy school. Reality is what it is. We all just have to go with what we've got and make the best of it, and it really helps if your student doesn't have unrealistic expectations.</p>
<p>So, Kluge - are you saying you missed the big uphill run on home appreciation in California? And if you're paying mortgages on twice what my house is worth you're paying 4 times what my mortgage is (since we're only paying on the purchase price, not the current value). Considering my mortgage is approximately $1000 a month, that means you're paying $4000 a month, which is our total takehome pay. Did you misspeak, or is my math off? If so, I apologize. If not, and you can afford that, how can you define yourself as middle class? Or were you not speaking from middle class experience when you were talking about how we all should have been saving for college all along?</p>
<p>Well, Penn has great finacial aid. In fact, for families that make less than $50000, it's basically free. I think Yale has something similar. I think it's reasonable for them to assume that anyone with anymore inclome should be able to finance it. I mean, they ARE businesses. </p>
<p>It's funny hearing "middle class" students complain about financing a college education, although I understand. It's just weird. I mean, the people who get financial aid probably really need it, and the rich people just don't. There's no reason why colleges have to carry the middle class on their backs. That's the rational way of the free world. "Poorer" people need assistance, rich people haave more than enough, and middle class people are in between. It's not like it's unfair. You're not "poor" enough to really need financial aid, so that means something. I wish a university education were free for everyone. Maybe one day we'll have universal education worldwide and no one will have to pay for their own education. It'll be paid by the global government. Until then, good luck. I hope you figure it all out.</p>
<p>I asked about what schools are giving the offers complained about in this thread, because NOT all colleges assume that your estimated family contribution is the same dollar figure as you get by filling out the FAFSA. Princeton, at least, seems to take a different approach. Check its early estimator </p>
<p><a href="http://www.princeton.edu/main/admission-aid/aid/prospective/estimator/%5B/url%5D">http://www.princeton.edu/main/admission-aid/aid/prospective/estimator/</a> </p>
<p>to see what would be on offer in your own family situation. It doesn't say anything about the "Ivy League" to mention (seemingly) inadequate financial aid offers from non-Ivy-League colleges. </p>
<p>I have seen threads this year in which students who were admitted to Harvard report that they decided to attend a different school (Yale, in one case I particularly remember, and Duke with one of its full-ride "merit" scholarships, in another), but what I haven't seen on College Confidential for at least two years is anyone saying that Harvard or Princeton was just plain unaffordable. I would be curious to know what other college choices were available to anyone who thought Harvard or Princeton simply couldn't be afforded, if indeed anyone recently has thought so.</p>
<p>As a student, xaltruistx, you will have two chances to figure it out...once for yourself and once for your own kids. It doesn't sound like you have any financial worries, but good luck to you too! :) And hopefully nobody will ever have to carry you on their back.</p>
<p>(BTW, it is NOT reasonable that everybody who makes over $50K should be able to finance a college education, either public or private. Check out the article in post 81 to see where some of the money goes.)</p>
<p>
[quote]
it is NOT reasonable that everybody who makes over $50K should be able to finance a college education
[/quote]
</p>
<p>Harvard's current policy is that families making $60,000 or less have a family contribution of ZERO. (There is a small student contribution expected of all students; students admitted to Harvard usually find it easy to make that much money in a summer.) And for families making more than $60,000, but less than $80,000, the family contribution is substantially reduced compared to financial aid formulas used at other schools. </p>
<p>Eligibility for partial financial aid continues to incomes well above $100,000. That's why I claim that Harvard (and Princeton, which has similar policies) are affordable to middle class families. That's two of eight colleges in the Ivy League. (I think Yale is affordable too, according to all that I read here on CC.) </p>
<p>More generally, I doubt that there are very many colleges anywhere that expect a family with an income of $50,000 to pay full list price for college, unless full list price is already heavily subsidized by state taxes, as is the case at some state universities. OF COURSE families with an income of $50,000 can't finance a college education, and they aren't expected to, either by public or by private colleges.</p>
<p>Well, I'm actually in the "lower class", so I'm aware of the pinch. I see an education as priceless, so I don't stress about the cost of supporting it so much. I'm going to be a physician( and the starting a non profit activist organization afterwards) so that'll help pay the loans off. I guess you're right about the $50,000, if you're refering to the high cost of college in general. As an activist, I'll be sure to take action for universal education, because education should be based on ability and merit, not financial situation.</p>
<h1>92 - "I'll be sure to take action for universal education, because education should be based on ability and merit, not financial situation."</h1>
<p>The rest of the world does this way. Only American private colleges charge unreasonable tution. If a child depends on his/her parents' wealth to go to college then he/she is robbed of the right to struggle to find the meaning of life.</p>
<p>Actually, many countries around the world expect college students to pay a substantial portion of their own expense (by savings, work, or borrowing) for college education. And economists of education have noticed that college access is much greater in countries with policies like that (including the United States) than in countries with extremely tax-subsidized, low-list-price-for-all policies. The quality of higher education, as well as its supply, tends to be greater when there is more payment for it from the pockets of the students and the students' families directly rather than from the general, mostly not-college-attending, taxpaying populace. To look up research on this subject, I suggest starting with the writings of economist Mark Blaug, but many authors on the same subject who have studied other countries have reached the same conclusion.</p>
<p>In Japan, it's all paid for and it's merit based (but it also limits the opportunities of students who might not have done all that well in their version of high-school).</p>
<p>No, actually in Japan (I have been there) many college students attend privately operated universities that charge tuition. </p>
<p>After edit: "The average costs (tuition, fees, and living expenses) for a year of higher education in 1986 were 1.4 million Yen, of which parents paid a little less than 80 %, or about 20 % of the average family's income in 1986. To help defray expenses, students frequently work part-time or borrow money through the government-supported Japan Scholarship Association." </p>
<p><a href="http://en.wikipedia.org/wiki/Higher_education_in_Japan%5B/url%5D">http://en.wikipedia.org/wiki/Higher_education_in_Japan</a> </p>
<p>Wikipedia isn't a scholarly source like those I have consulted on this issue before, but it is viewable over the Web. </p>
<p>P.S. Are there a lot of Americans spending 20 percent of their family income on their children's college education?</p>
<p>I think there are a lot of interesting points brought up in this thread, and I think that there are a lot of parents who are considering how to pay for their kids' college educations without a large basis of savings, and that there are a lot of kids who are considering how to pay for their own educations...</p>
<p>But there don't seem to be a lot of kids concerned about eventually paying for <em>their</em> kids' college educations.</p>
<p>I'm 25. I'm just about to complete my first year at an engineering firm, after four years in college and two in grad school. I'm chipping away at my college debt and I'm planning my wedding and I'm contributing the maximum to my 401K every month... I'm also planning on having kids, so in about 20 or so years, I'm going to be in the same boat as the parents in this thread.</p>
<p>The difference between me and the parents in this thread is that I've got a ton of time.</p>
<p>I decided to use that to my advantage. When I graduated from grad school and landed my fairly nice, albeit entry-level, job out in Los Angeles, I enlisted the aid of a financial planner (an independent consultant who I found through the Palladin Registry... he's fantastic, and his personal passion is helping young people plan for their futures) and for about $350, he put together a financial plan for me. </p>
<p>I'm socking away large (by my standards) chunks of money every month to accounts for my eventual children and my eventual downpayment on a house and am taking larger risks with my portfolio now, when I can afford to gamble a bit more. Retirement will be taken care of, provided I continue to contribute to my 401K as I'm currently doing. My cost of living (despite my being in California) is fairly low, so I'm able to do this right now. Things will change in the future, but at least for right now, I have a head start on the problem, and I'm working towards a well-defined goal.</p>
<p>For the parents whose kids are in high school and entering college, it's probably too late to <em>start</em> saving, and I'm no expert in creative financing, so I obviously can't offer any advice from personal experience there. What you <em>can</em> do, though, is encourage your kids to develop good habits once they get out into the work force. Help them start thinking about their retirement plans when they're in their twenties. If their first job offers a 401K, encourage them to contribute the maximum that they can to that... Particularly if the company matches contributions. (I contribute 6%, which is the most that my company will match to, because that is <em>free money</em>!) Encourage them to seek out a financial planner who specializes in helping young people chart a road map (again, the Palladin registry helps people find independent financial planners, who don't have any stakes in particular funds, and who are more likely to give impartial advice and opinions). Have them get a head start on things.</p>
<p>It just seems to me that so few people my age are keyed in to the problems that they're going to face in the future... It's so much easier to start out saving aggressively now, when we have so few actual expenses, than it is to try to "tighten the belt" in the future, and honestly, when we're starting to face the big bad world out there, we really do start to listen to our parents.</p>
<p>So, parents, even if you can't find the funds to send your kids to college and they have to deal with loans and debt, you can at least give them a push in the right direction... When you're at Target, buying silverware and cheap towels for their first apartment when they start their first job, don't forget to help them find a financial planner.</p>
<p>That is interesting. There was a survey done and young people today have much higher saving rate than the dismal saving rate of baby boomers (their parents). That dismal saving rate seems to hound the boomers who just woke up.</p>
<p>CasualObserver--</p>
<p>Good for you! You are taking some very reasonable and responsible financial steps right now, which is excellent. Sounds like you will find yourself in a very nice financial position when your kids are ready for college and you are ready for retirement.</p>
<p>Thanks. I figure that it's probably better if <em>I</em> live in squallor now, and get used to aggressively saving throughout my career, than try to convince three or four other people to live in squallor with me later, and try to catch up for lost time... Particularly if two or three of them are teenagers! ;)</p>