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

<p>Well, we live 25 minutes by bus from NYC, and none of those expenses are like that in my town. (Houses are relatively cheap, I don’t know anyone with a nanny, and most kids go to public school.)</p>

<p>My kids tuition just went out the door. Minnesota Senate yesterday voted to add an additional 9% tax to us “wealthy” folks.</p>

<p>To Oldfort - If my silly way of talking makes people worked up against New Yorkers, your way of writing makes all the New Yorkers look thick-skinned and pushy. Are you saying because you had to pay a nanny $3200 per month or $38,400 a year, you can’t pay for Ivy education for you kid?</p>

<p>We make in the $150-200K range and don’t feel rich. We see rich all the time and we’re not it! HOWEVER, we don’t want sympathy or anything else, either, because we can make choices and do what we need to send our kids to college. We are beyond grateful, humble, excited and proud. It’s our responsibility, after all. My pet peeve isn’t so much with financial aid – I think most colleges do the best they can in difficult circumstances – but with the snarkiness of some people, including here on CC. I always say that others could make as much as we do if they worked as hard as my husband and I do (he has two jobs and I work tons of overtime), but they make the choice not to so don’t look down on us for our choice. That’s all. I also don’t get the envy of financial aid. I’ve been poor and let me tell you, it’s not better. It may look like the truly poor get more aid, but it’s all relative. If you end up with a bill of $3000 and you absolutely can NOT pay it, you’re in a pretty rotten boat. I think we should all have respect for each other as parents doing what we think is best for our kids and save the sneering for the parents who abuse or neglect their kids.</p>

<p>Wonderful post, Zoosermom.</p>

<p>Thanks Garland. I know we all read and cry over the posts of kids whose parents won’t help at all and never let them know ahead of time. Those are the parents deserving of scorn. If the rest of us want to complain sometimes, what’s so bad? Even people with a good income who aren’t independently wealthy make hard choices that sometimes hurt. Heck, if I think I paid too much for a sweater, I complain about that. Never mind tens of thousands of dollars. And, anyway, don’t we all want a deal? Whether it’s the sweater or college, isn’t it sort of normal to want to pay less for pretty much anything?</p>

<p>Another thing that never gets taken into account is the lack of nearby lower-cost alternatives for families living in so-called lower-cost areas. Common CC wisdom is that if you don’t have the money, live at home and commute to a lower-priced college or community college.</p>

<p>In some places in this country, housing is cheap because there are no institutions of higher education within commuting distance and there is no public transportation.</p>

<p>emerald - 10% is on the average for income between $120K-180K on a sliding scale from x% to 0. That’s not bad. They are covering everyone up to 96-7% households.</p>

<p>Are you speaking about Ivy schools with huge endowments?
My personal experience is with a household making less than $100,000.
SOme years closer to $80,000 some years $40,000.
Our EFC has never been below $14,000</p>

<p>@Pea</p>

<p>Jackpot’s econ teacher is correct. College pricing practices are routinely cited as examples of first-degree price discrimination. The fact that colleges do not charge anyone the full cost of providing the service is not relevant. Also, in Jackpot’s post, I do not see where s/he stated that the prof claimed that this was “capitalism run amok.” Various forms of price discrimination are permitted in the US for a number of services–movie tickets (children pay less than adults), airfare, periodical subscriptions (e.g., students are offered cheaper rates for the WSJ), and college tuition.</p>

<p>It is a fact that colleges have access to extremely detailed financial information that signals one’s ability to pay for the service rendered. This information is used to charge different prices for the same service, which is by definition price discrimination. </p>

<p>Our society would not tolerate a situation where we were obliged to reveal our income & assets before the price was set for autos, houses, or big-screen TV’s. However, we seem to have accepted the practice of price discrimination in college pricing because it is a means of achieving our goal of fostering upward mobility through access to higher education.</p>

<p>Emerald,</p>

<p>It’s from robinsuesanderse #146. Here it is again,</p>

<p>Harvard - Those parents with annual incomes of between $120,000 and $180,000 are asked to contribute an average ten percent of their income, with a declining percentage — from ten to zero — for parents with annual incomes between $120,000 and $60,000.</p>

<p>^^^…and there are darned few schools that will match Harvard’s FA. That leaves everyone else making very tough decisions.</p>

<p>robinsuesanderse also quoted Princeton and Yale. My impression was that they are roughly the same as Harvard. You can go back a few pages and read his or her post. Yes, it’s tough but it’s tougher for those getting FA or at least not any easier. I think that’s what people are saying.</p>

<p>We were DINKs for many years before our only child was born. No chance for getting FA. I don’t feel rich but according to stats we are in the top few percent. I can’t complain that colleges are funding only 96-98% households and leaving me out.</p>

<p>This thread moved rapidly since I last posted and so my response in sort of out of sync at this point. </p>

<p>But when I mentioned that making over $150,000 is not middle class yesterday, some came back with that it is middle class and they are not rich, etc. I never said that those who make over $150K are rich. But they still are not middle class. A very small percentage of people in this country make over $150K. And in fact, students of families who make over $150K represent a large number in the student body on most selective or private college campuses. This is a much higher percentage than in the population at large. </p>

<p>I recognize it still is not easy to pay for college if in that income bracket, but it is also not easy for those of us making much less than that who may have to pay a bit less for college but it is relatively just as much of a challenge to do so. </p>

<p>Let’s say you make $160,000. With that income level, you MAY have been able to save $60,000 toward college for one child by the time he/she is 18. Say tuition/room/board is $50,000 a year. So, you already have $15,000/year for college. Then, you should be able to afford at least $15,000 per year out of current income toward college for one child. After all, many of you in that income bracket even sent your kids to private schools prior to college. Even if you didn’t, you are saving money when your kid goes to college as you no longer have to pay for their activities and summer programs and the like. Affording $15K per year should be doable out of current income. So, that is now $30K per year you can pay for college for one kid between savings and current income. Then, as a parent, you can take out the remaining $20K per year in loans (or you take out $15K per year in Parent Loans and have your kid take out $5000/year in student loans if you prefer). With an income of $160,000, once college is over, a parent should be able to pay back this $80,000 (or $60,000 if your kid paid some student loans) in loans over ten years. </p>

<p>Some colleges with good need based aid, won’t even make you pay that much as you’d still qualify for aid. Here is an example from Brown University:</p>

<p>A family of five with one student attending Brown as an incoming freshman in 2010-11, with total income of $160,000 and assets of $150,000 could expect the following estimated financial aid award. </p>

<p>2010-2011 Estimated Award:<br>
Parent Contribution $ 40,050
Student Contribution $ 2,400<br>
Total Expected Family Contribution $42,450</p>

<p>Financial Aid Award:<br>
Brown University Scholarship $ 4,370
Student Loans $ 5,000
Campus Employment $ 2,550
Total Financial Aid $ 11,920</p>

<p>Loan Indebtedness at Graduation $20,000</p>

<p>I really think the problem here is a lack of understanding between the college and between these upper income families. The colleges in question here made a vow to make the school affordable for low and middle income families. They did. In fact, their financial aid initiative cover over 95% of families. But, there are people in the upper echelon of incomes who still think they are middle class, and then they are complaining that they are not getting covered.</p>

<p>I also agree that most colleges give need based aid to 95% of the population. Only about 5% of the population makes more than $150K. And even some well endowed schools give aid to families making that much money as well.</p>

<p>My point of citing the HYP FA language is that I have specifically seen multiple posters saying that they can’t afford to send their kid to HYP because those schools have no merit aid and their income level is too high to qualify for need-based aid at those schools. Folks too rich to qualify for need-based aid at the top Ivies must be making over $180K/year, and that is NOT middle class in my humble opinion. And saying that the problem is a sudden cutoff of FA at around $180-200K is not relevant to the question of whether the super-elites are unaffordable for the upper middle class: A family income of $200K/year puts the family at the 95%. If that’s not lower-upper class, then where does lower-upper class start?</p>

<p>I know that most other privates are NOT as generous as HYP for a variety of reasons, the principal one being significantly smaller endowments. And that’s why I ask if the real complaint/question posed by the OP is about non-super elite privates that use most (or all) of their grant money for need-based aid instead of merit. Is the real complaint from parents making $100-200K that non-super elite privates are becoming unaffordable?</p>

<p>I get the fact that the FAFSA EFC easily runs between 20% and 25% of AGI for the $100K+ crowd. The FAFSA EFC for my family is right at 15% of my 70K AGI, which i a significant chunk of change too. And I suspect that FAFSA EFC for many families making $40K is still a pretty high percentage of income. I also understand that CSS Profile schools are mysterious in what they count and how they count it in determining EFC. But that hurts the low income kids too since they’re at least as likely to come from severely broken families with uncooperative NC parents as anybody else.</p>

<p>So my problem really is that I keep seeing posts from parents with large incomes and large unaffordable EFCs who keep implying that at most private colleges, the need-based aid for students from families with much smaller incomes will somehow be enough to make their COA-FA gap affordable to the lower income family. And that’s just not the case. If the non-HYP type of private does meet the full need, it’s likely with full amounts of Stafford loans AND often a healthy chunk of Perkins thrown in AND how is a $8K EFC automatically more affordable for a family making $50K than a $20K EFC for a family making $100K? [And then there’s also the higher probability that the gap from a non-full need college will be relatively larger for the poorer student.]</p>

<p>And then the $100K family can probably afford to pay for the in-state public without too much financial sacrifice and probably with NO loans–including Staffords unless they want them. But that student from the $50K family will still have to take out maximum Stafford loans in an attempt to get the out-of-pocket expenses down to something approaching the family’s EFC. </p>

<p>So I do believe that if two students have roughly the same qualifications and stats, the the student from the $100K family is very likely to have many more viable options than a student from a $50K (or lower) family. And for a genuinely poor (lower class) student with an EFC of $0, I think the options will be even fewer in spite of qualifying for a maximum Pell grant since (Pell + max Staffords + Perkins) does not always cover the COA of the in-state public flagship and not all states have generous grant programs of their own. So those students who are genuinely lower class will likely have NO option to choose except for local CC or fourth tier state U that they can commute to. And even then, those students are likely to graduate with more debt than the four year total of max Staffords.</p>

<p>And none of this takes into account the fact that the kids growing up in $100K families are likely to go to much better K-12 schools, score (much) higher on standardized test scores, and have more opportunities to develop significant depth in ECs, all of which makes such a kid more likely to win admission to both a super-elite (with good FA even for a $100K family) or win a big merit award at schools slightly below the “elites” that do use merit scholarships as well as need-based grants to attract the students they want.</p>

<p>I also see many parents talking about whether they can afford college as if it all has to come out of current income. Unless you are making a LOT of money, it typically cannot all come out of current income. But after your kid graduates, you should be able to continue paying a certain amount back via loans.</p>

<p>Soozievt: Couple of issues:</p>

<ol>
<li>The problem is not that there is FA for family making less than $150K but that FA for families making more than $150K is not consistent.</li>
<li>The assets of $150K is too low if you follow common sense of having 1 year of income in liquid cash and this include home equity.</li>
</ol>

<p>What is wrong with the idea of everyone paying just 10% to 15% of AGI per child towards college expenses above AGI of $60K?</p>

<p>There will be no room for complaints by any one and everyone knows how much it will be needed to attend a school.</p>

<p>Soozie, it depends on the family and the circumstances. College financial aid is a snapshot in time. As we’ve all seen, there are circumstances where families can have a bump in one year because, maybe a parent died and they had an inheritance, someone lost a job and got a severance package, whatever. My husband made less than $20k for most of our kids’ lives. We didn’t make this income long enough for us to have put away a huge amount of money, but we do have the income now to make monthly payments. As I said, I’m quite happy with our situation, but I do think you have a little bit of a skewed view. However, I do agree that a kid with a higher family income has more options and is generally better off.</p>

<p>robinsuesanders:

</p>

<p>I think it is relative. Still the complaints is not about FA for anyone making less but FA at HMSPY for families making $150K or more.</p>

<p>Why not use 10% rule for all families making > $150K?</p>