Dear colleges, You have priced the middle/upper of the middle class out, so...

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<p>What do you think it is, upper class? Really?</p>

<p>We have a friend/business associate (friendly business associate?) who is actually upper income. We have to been three of his homes; he has a lot more–on several continents. He dispenses many, many thousands of dollars annually for a wide variety of causes. He has sufficient money and interest in public issues that elected officials would run over hot coals to take his phone calls.</p>

<p>Do you actually think people who live on $150K annually belong in the same category when discussing the affordability of higher education? </p>

<p>Sorry, but I just couldn’t read one more comment on CC about how people who have wage income of $150-200K a year are “rich” without responding.</p>

<p>Does everyone here know the difference between income and wealth? The difference between stock and flow?</p>

<p>A lot of people with relatively high annual incomes that depend entirely on wages are understandably reluctant to take on significant debt, especially if they are within 15 years or so of retirement. The income could disappear tomorrow. It is a different story if there is significant investment wealth that could be sold off if necessary. </p>

<p>And in case some of you don’t realize this, many of us with good incomes now, lived on peanuts for most of our adult lives while we built our careers. </p>

<p>Personally, I am not complaining. My son attends a top private on a massive merit scholarship (lucky boy, lucky parents) and my daughter chose our instate public flagship to save money for vet school and because the programs she wants are quite good there.</p>

<p>But I do indeed feel for those who are stuck in the same EFC boat as we were. And I do indeed believe the administrators and boards of private institutions are concerned about the missing middle. That is the reason the top institutions have improved their f.a. pictures. They haven’t done enough to solve the problem, though, and schools with smaller endowments can’t figure out how to match those programs.</p>

<p>I think this is a real problem for private schools.</p>

<p>I really don’t have a solution for this, but I do want to chime in with a point that few full pay parents note in their posts. If you pay 200,000 out of pocket with no loans, at a modest interest rate of 3%, that money would have been worth almost 500,000 to your child 30 years down the road. Of course if you are a good investor and could get 7% or more, this would be much more capital in 30 years. This lost opportunity cost, is a real cost, and perhaps a very painful cost. On the other hand, borrowing 200,000, will come with a much higher interest rate, and a greater loss of capital, with compounding.</p>

<p>Of course this boils down to what you are willing to forgo in order to come up with the money, either now or later. What I think really gets to some people, is that if your income is low enough (really you need quite a bit of liquid $$$ or home equity for profile for parent assets to start to materially sway EFC, since they count at a small percentage) you will not forgo the money now or later, since you will get grant money and not loans from the tippy top schools. Yes, a few low income students will win the financial lottery if they are accepted. “Fair” is how it is viewed, and that is truly in the eye of the beholder. I refuse to touch that with any size pole. </p>

<p>One thing that is true is that a good income now is not guaranteed to be a good income later, and if you don’t take on debt, you won’t be crying later if something goes wrong with your plan. I abhor leverage, and would try to minimize debt to the extent it is at all possible. </p>

<p>One final thought, you can do well from a public institution. I recently read of some interesting work in Economics by a Harvard professor. It had to do with motivating students to read. This professor went to undergrad at a Texas public and to Penn State for grad school. Isn’t it all really about the person?</p>

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<p>Don’t know about Michigan, but UVa’s in-state tuition is $10,000+, which is higher than average for in-state tuition at the state flagship. The OOS is indeed over three times as high. But part of the problem is that UVa’s state subsidy has gone down, down, down over the years until it is something like only 10%. They’ve used OOS tuition to cover a (small) part of the resulting gap. And I still don’t see why either UVa or Michigan should worry about making OOS more affordable if the in-state tuition is also relatively high so-to-speak.</p>

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It also depends on where you live.</p>

<p>Would you consider two police officers or two firefighters or two sanitation workers rich? Two secretaries or bookkeepers? Probably not, but their income is generally between $150 and 200k. I would definitely call that middle class.</p>

<p>“Do you actually think people who live on $150K annually belong in the same category when discussing the affordability of higher education?”</p>

<p>We’re not talking about the affordability of higher education, really. We’re talking about the affordability of a subset of high-caliber private schools. If I’m a private school with high operating costs and a limited fin aid budget (which is to say all of them), I have to decide where to put those dollars to give them the most impact. Yes, it might be reasonable for me to adopt a distribution formula where students with family incomes above $150k are disqualified. It doesn’t mean that everyone with an income above $150k is rich; it means that I had to draw the line somewhere, and that was the highest I could draw it without going over budget.</p>

<p>midmo hit the nail on the head.</p>

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<p>Absolutely. $150,000 per year puts a family at the 94th percentile. That’s not the middle of anything. Living in a pricey area may make you feel like $150,000 per year is merely middle class, but that is not the case - your cashier isn’t making $150,000 and she lives in about the same area.</p>

<p>I posted this on another thread and I will reiterate it here. America prides itself on having a large middle class, so let’s consider that 60% of all Americans are middle class - that is, that lower class ends at the 20th percentile and that upper class starts at the 80th percentile. The facts then look approximately like this (I believe the data is from 2008) for households.</p>

<p>Low-income: <$22,500
Middle-income: $22,500-$90,000
Upper-income: >$90,000</p>

<p>Households that bring in $150,000 or more are in the top 5.84% of income earners in the United States. How is that the middle of anything?</p>

<p>I think it is very, very easy to have a skewed sense of how much money we make.</p>

<p>Before anyone get all over my back that my post is to self serving. My kids are privileged that that they’ve had K-12 and private college paid for. But we do know many top students around our area (mom a psychologist, dad an engineer; or teachers and policeman) who couldn’t afford those tuitions. Maybe those parents didn’t cut every luxury out (had cable, internet, drive cars with less than 100,000 miles, go out to eat every once in a while). Yes, I’ve met few CC parents on here who pretty much cut out every spend so they could afford to send their kids to school. But really, does it have to get down to that?</p>

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<p>That is absolutely false. Cashier cannot afford to live on that wage. They are usually dependent of someone else - parents, spouse, family member. How often have we heard that teachers couldn’t afford to live in the same town where they teach? </p>

<p>150000 around NYC is middle class, if not below, not if you are considering a start up home is .5 mil+, and tax is over 10,000, commuting into NYC is $3-500. If you don’t want to work in NYC, then you would be hard pressed to find a job that pays that much.</p>

<p>average family income in the U.S is somewhere in the mid 40’s. A family with income above 100K may not feel wealthy but they’re probably in the top 25% or so of wage earners. At 40k the difficulty is finding any college to go to, other than the local state or cc. At 100k income there are likely to be many more choices, including whether to pay for an expensive private college.</p>

<p>A school like Cornell gets a lot of students from NYC area. There is a definite “haves and have nots.” If Cornell wants to have diversity and create a community, then it needs to figure out how to get more 150-250,000 income students on campus.</p>

<p>“I’ve met few CC parents on here who pretty much cut out every spend so they could afford to send their kids to school. But really, does it have to get down to that?”</p>

<p>Of course it doesn’t have to get down to that. That’s up to each family. But they aren’t entitled to send their kids to an elite private college at the price of their choice. It costs a whole lot. If you think it is too much for your family to spend, choose a more affordable option.</p>

<p>I’d view this as a serious problem if there weren’t excellent, affordable options. But for the kids we’re talking about – the ones who get into top private schools – there always are, whether it’s an instate public, a less expensive private, or merit aid. None of these kids is being priced out of quality higher education.</p>

<p>But they are getting priced out of top 20s, which the lower income students are not.</p>

<p>thank you, applicannot, thank you! keep breaking those numbers down. many folks need a swift reality check.</p>

<p>the real issue–as i see it-- is the slow and steady privatization of our public universities. kids from the lowest income households are NOT making out like bandits in this game (as some on college confidential seem to think). and realistically–how could they? when k-12 education in poor communities doesn’t usually lead to a surplus of college-bound students. so can we please stop with the “only the rich and the very poor are getting educated” nonsense!</p>

<p>Backing up the gist of applicanot’s numbers, here. The most recent data I could find on <em>family</em> incomes at the census are 2008 numbers (available at <a href=“http://www.census.gov/did/www/saipe/index.html[/url]”>http://www.census.gov/did/www/saipe/index.html&lt;/a&gt;).</p>

<p>For the 2008 family incomes, AGI of $113,205 (in 2008 dollars) puts the family at the 80th percentile.</p>

<p>And yes, I understand how you can make $100K to $150K and live in an area like the DC metro area, the NYC metro area, and So Cal and easily think of yourself as “not rich”. But regardless of where you live, there’s a heck of a lot of people living in the same state and in the same metro area making a whole lot less than you are. And for many folks earning around the <em>median</em> family income (around $55K or $60K if I read the data right), paying for that “affordable in-state flagship” can be difficult without taking out loans every year.</p>

<p>So I have sympathy for all those folks earning between $100K and $200K and saying, there’s no way I can afford my EFC, so I’ll tell my kid you have to go to an in-state public. But I also wonder if they ever think about how a family making $50K or $60K manages to live in their area and what <em>that</em> family has to tell their kids about not being able to afford the state flagship because of an unaffordable gap.</p>

<p>When we are discussing who is “middle” class with reference to the cost of college, it is not useful to refer to income tables that include young unmarried singles as ‘families’, or that include old widowed retirees as ‘families’, and so on. The relevant group is households with children who are at, or younger than, college age. If the comparison group cuts out all those low income families that do not have to think about financing college, then 150-200K annual wage income (little or no accumulated wealth) puts a family somewhere in the middle.</p>

<p>Hanna, post 45: I don’t disagree with you. But I think the result is a real problem for private schools.</p>

<p>You mean they’ll have to go to Georgetown or Tufts? Perish the thought. No, Cornell (ranked #15) OWES your daughter the same charity it gives a poor child. YOU are entitled to charity too. You’ve made your position very clear.</p>

<p>By the way, the median household income in New York City is $47,000. [New</a> York City NY (New York) ZIP codes, schools, jobs, demographics & more](<a href=“MuniNet Guide | University of Chicago”>MuniNet Guide | University of Chicago)</p>

<p>“If the comparison group cuts out all those low income families that do not have to think about financing college”</p>

<p>How come low income people don’t have to think about financing college? That’s true if the kids get into the Ivy League, but not many do. That’s where the real problem is – people who can’t afford to go to college at all, not the families who have to take merit aid at USC rather than paying full freight for Yale.</p>

<p>If the result is a real problem for private schools, what better solution can you offer? It’s not clear to me that there’s a problem – if there were really a problem with “diversity” or “community” at Cornell due to the alleged underrepresentation of $150k-$250k families there, I think you’d see it reflected in the number of applications. But if there is a problem, what should they do about it?</p>

<p>All of my sibling went to top tier schools on financial aid (not to be confused with merit aid). My father as an immigrant, was luckily considered low income. But all four of us knew that if we got top grades we could have our dream of going to one of those top schools. It was a great incentive to us, and we worked like crazy. I just couldn’t imagine being a kid and thought no matter how hard he/she tried, those schools were out of reach.</p>

<p>I think those schools should take cost of living into consideration, and give a sliding scale when it comes to FA.</p>

<p>I’m not arguing that public flagship universities do not present a hurdle for many working families, even at in-state rates. Part of the problem was presented as a boxed quote upstream. I put myself through college, undergrad. through PhD. When I started college, the public flagship could be afforded by working while a student, during the school year and the summer. Not so, anymore.</p>

<p>But the point of this thread, at least at the beginning, was that pricey private universities are losing a chunk of American society–the successful wage earners, who may well have worked their way up from nothing. (My H and I are the first in our families to go to school past elementary school.) If they don’t mind losing that segment of society, then they will continue on as they are. But I think they are worrying about it.</p>

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<p>Well, you get no argument from me on that issue. In my opinion, the only REAL issue in education is the state of K-12 education.</p>

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<p>What the heck is this supposed to mean? You think that low income students don’t have to think about financing college? At the fourth-tier public college where I teach, they are the students who are working 2 and 3 jobs trying to make ends meet while also taking out maximum Stafford loans each semester in addition to their Pell grants.</p>

<p>I’ll also say they’re also a lot more grateful for the chance to try to get an education than the upper-middle class and lower-upper class students that I used to teach at a small, well-respected, but not top tier midwestern LAC.</p>