That's a choice which increases your financial stability, so it also increases your borrowing power. You are fortunate -- you have a well funded 401K that is not considered as an asset for purposes of calculating EFC, and knowing that your retirement is secure, then it is more reasonable for you to borrow. </p>
<p>In any case, I find it hard to believe that you can't come up with any part of your $17K EFC. You posted you have a ~$90K income and a $1000 monthly mortgage; I've got a ~$50K income and a $1600 mortgage, and I came up with $12K for my daughter's college last year without borrowing. (Maybe you have a very large family?)</p>
<p>I'm not saying that there is anything wrong with the choices you have made -- but the point is that they are choices. You can save money in FUND A (retirement) -- and then borrow to meet college expenses, with the expectation that the debt will be repaid by the time you reach retirement; or you can save money in FUND B (education), pay for the education but then be worried more about your future financial security. </p>
<p>I do think that the financial aid system is premised on the assumption that a family earning $90K has some discretionary income. I realize that every family has its own set of needs...... but given the fact that $90K is well above median, it seems to me to be a rational assumption.</p>
<p>I'd point out that my son paid his own FULL cost last year at a state college with a COA of about $15K -- my son did that with his savings from working 3 years and living on his own with earnings of ~$25K or less, and working half-time for an Americorps stipend during the school year. He started out with about $12K in savings and spent most of it down, and will qualify for financial aid in the coming year.... but I just want to put that out for some perspective.</p>
<p>Yep, chose to fund retirement. Could borrow, choose not to. Kids in state schools, not Ivies. No one's complaining. Where's the problem?</p>
<p>My point has always been that for a middle class person to attend an Ivy will probably involve some borrowing due to the fact that it is very difficult for a family with modest income and multiple children to save enough to fund Ivies. That's the only point I've been trying to make. Each family needs to determine for itself whether the level of borrowing is worth the cost of a particular school.</p>
<p>I don't find it particularly useful to endlessly nitpick about how much each family "should" be able to eke out each year for college given a particular income. Each family's financial situation is unique, and many factors enter into the equation.</p>
<p>I think what we should all be striving for is to have our kids completely understand our financial situation and choices, confidently embrace the school they're attending, and have the self-esteem and class to not get caught up in the "my school is better than your school" nonsense.</p>
<p>
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My point has always been that for a middle class person to attend an Ivy will probably involve some borrowing due to the fact that it is very difficult for a family with modest income and multiple children to save enough to fund Ivies
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I know everyone's experience is different, but one of my kids attends, and next year both will attend a highly ranked private U. We had NO college savings. We have a household income of around $90,000, 2 kids, no unusual tax situations. We recieved financial aid. We are paying our cost out-of-pocket with no borrowing for kid number 1. It is possible that we will need to borrow some for kid number 2, but for now, we are good through kid 1's graduation and Kid 2's first year of school. I know that each family's situation is unique - but I take issue with the statements that middle-income kids are always priced out of private college/ivy colleges.</p>
<p>It also depends upon the actual financial aid package you get. For example, one private offered us $20K/year, one offered nothing, and some were in the middle (all merit aid, no need based aid- thank you FAFSA/CSS). I know that many here will say what a great deal loans and work-study are, but to me the only real financial aid is the kind that is free. We can take out loans (and do) and our kids can work anytime (and do). Therefore, we compared not the fa packages, but how much we had to pay out-of-pocket. And that is where each family has to decide how much debt they can endure.</p>
<p>PS to anxiousmom: Our situation is similar to yours except that we had savings, but we got nothing. :confused: Go figure.</p>
<p>But the point is, the question/thread title is: " Can a Middle Class Person go to an Ivy League School?" NOT, " Can a Middle Class Person go to an Ivy League School without borrowing? Borrowing money is one way that middle class people fund discretionary expenditures -- whether it is a house, a new car, or a private college for their kids. Is it fair that rich people can afford to buy the same things without borrowing? Maybe not ... but that doesn't mean that middle class people can't have those things -- it's just a matter of figuring out how much debt the family can handle, coupled with figuring out priorities in terms of how much debt the family is willing to take on for a particular purpose. </p>
<p>I mean, maybe some other family on my block is making payments on an SUV while their kid goes to community college, and I'm driving an older model economy car while my kid studies at an elite private. If I have a monthly PLUS loan payment of $500 and the other family is paying the same for their new SUV.... neither one of us is being denied what we want. The fact is, borrowing is the way that each of us has extended our income to buy what could be seen as a luxury good. </p>
<p>I think that there are glitches in the financial aid system, but that in general it works out so that middle class families can afford their cost of attendance if they are willing to borrow <em>part</em> of it -- and I think that the expectation that they will borrow some part of it is built into the system, just like car manufacturers assume that middle class Americans will opt to finance their car purchases when they set the price of new vehicles. </p>
<p>If the attitude is -- I only want X if I can pay for it out-of-pocket -- that might be very savvy financially, but obviously it is going to limit the purchasing power of a middle class family in more ways than one.</p>
<p>I think here are a few tips to save for college and still keep the same standard of living, middle class or not:
1) Save your raise
2) Save your income tax refund
3) The middle class people that have purchase their house( not so recent, ie before 1998 when mortgage interest rates went south, thanks to Greenspan) can refinance and reduce the mortgage term from 30 to 15-year without increasing payment or can reduce their payment in half, which can fund their children college education.</p>
<p>It is possible for a middle class family to handle the expenses of an Ivy or other private school. Each family's experience with college costs is different; however, many will argue that you can also obtain a great education at a lower cost at a state university. Unfortunately, not every parent can save his/her raise or income tax refund because this $ is needed for debts, supporting an older parent, paying medical bills not covered by insurance, etc.
Refinancing the house could help if there are not other outstanding and pressing personal circumstances.</p>
<p>Maybe parents should research more closely those schools where their kids stand a good chance of getting scholarships. Just a thought....</p>
<p>I was in awe when I read the woman that started the Tightwad Gazette, how she could support a big family on a mere $22K per year (this is a few years back, not in today's dollar I don't think).</p>
<p>
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I was in awe when I read the woman that started the Tightwad Gazette, how she could support a big family on a mere $22K per year (this is a few years back, not in today's dollar I don't think).
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We followed a lot of the Tightwadder techniques for several years (and still do, to a limited extent. I had a copy of all her books, and it really did change our lives!) We fed our family of 4 on $50 a week (15 years ago.) Pretty much everything from scratch, bulk buying of sale goods, powdered milk, etc, etc. It wasn't that difficult to do, but it took discipline, some extra time, and group effort ....somehow, as our income has risen we've fallen away from it. But we still order water at restuarants ;), and reuse our plastic bags....</p>
<p>OT, I think the reuse of plastic bags is good for the environment. Here we have to rinse tomato cans, plastic jars, etc here and put in the recycle bin.
I did learn to cook better, follow the idea of doing things from scratch, ie making fresh pizza, fresh bread, fresh pasta. But in CA, if you heat up your house while cooking, you will have to pay a lot to cool it down so it's not as efficient money wise. However, I do more baking in the winter because it also save money heating the house.</p>
<p>Need-based financial aid is available from Harvard, Princeton, or Yale for ALL admitted students, domestic or international. I don't know about the aid policies at the other five Ivy League colleges for international students.</p>
<p>Cornell and Penn have very limited aid for international students. I seem to remember a couple of international posters who were furious that those schools admitted them, but did not give any aid.</p>
<p>For private college purposes, the middle class includes those who cannot pay for such an education without savings or loans. It is a fallacy to say that you can enjoy the same standard of living and still save for a private college education unless you make enough money that the differential would not affect your life. That we saved for our kids' college, though not quite enough, meant we had to do without certain things. I have to make decisions all of the time as to what has to wait this month and what gets addressed. We are making do with two old cars,have put off non essential plumbing work, have yet to replace our dishwasher, have some broken cabinets and other things that need carpentry work, have not gone to a Broadway play or show this year despite living near NYC, did not spend a week at the beach as the kids love to do, am not Christmas shopping so I won't be tempted, have not bought any books other than those essential or at hospital/Goodwill type places, chose to discontinue private music lessons, did not send son to sports camp, only go to free movie nights, don't have more than basic cable, own all cheap furniture, rarely eat out, haven't been to a upscale restaurant for over a year even though there are so many in the NYC area, budget everything and stick close to it, don't have a gps, don't have ipods, have few computer games, video games, on a food budget and plan meals accordingly, kids pack lunch, did not buy any Christmas ornaments or frills this year nor last, try to car pool, plan out trips so gasoline lasts longer. We don't HAVE to do these things. But to have kids in private schools, have the house we have, keep our debt down, have a reserve fund for emergencies, and other privileges we enjoy, we have to cut back in other areas. We do have that choice, however, that those who are not in our financial situation may not. It's just that the choices are fewer, the flexibility less, the risks greater, the less money you have.</p>