well, we are not “very affluent” and got a big fat 0 from UChicago. At 78k/year I was a bit shocked that we got 0 in aid.
Kid vs kids is the biggest factor. The “affluent” family that can find $300K by economizing, working a few years longer, not buying nice cars or foreign holidays, using an inheritance, etc. for one kid often can’t find $900K for three kids. Even if there’s a bit of overlap that leads to some financial aid, the bill might still easily be $750K total.
If we had one kid or even two, rather than three, then our college list would have been very different.
@caymusjordan - Please clarify. Are you saying that your total gross pre-tax income was $78,000 and your EFC was $70,000?
That makes no sense. Did you call them? It sounds like that was an error. Not only could you not be expected to live on $8000 a year, you would have even less than that after taxes!
U Chicago is one of the most generous colleges— need blind for admission, then meeting full demonstrated need, and meeting all need via grants, without any loans. There is no way they would have admitted a student then given no aid at $78,000. Very wealthy Noncustodial parent or other complicating factor, or an error, perhaps?
Great conversation. There seem to be many in the category in this discussion of making 200K and not having saved enough due to living in high cost states and paying things like daycare etc. I think it is totally unreasonable to assume that someone making 200K is going to have a million dollars after tax saved for their kids to attend college.( and that may not be enough depending on the number of kids and what colleges)
And the notation about those relying on 401K’s is totally relevant. If you can rely on a retirement plan from your employer that is a MAJOR factor. We have done everything (started saving early, taking on little debt, living below our means and having some very fat years and many years of making very high salaries. That said, paying the full cost of college tuition is steep. The burden is on those paying. I’m sorry but those complaining about 6K are a little unrealistic.
Thirty years ago, I had that much in loans annually( I think 5K) and I was coming from very poor background. I did pay it back and I am ever thankful for each and every merit based scholarship I received as well.
Like taxes, the financial aid system for colleges is a crapshoot with some paying nothing, others paying with no deductions possible and the “wealthy” paying for others. In the end, it’s a hodge podge of results that doesn’t reward those who have saved and planned.
@twoinanddone did your daughter go to UM?
^^No, she went to Florida Tech. For the purposes of this thread, I agree that one shouldn’t write off any school after just looking at the sticker price. There are many ways to make it work, but we were always prepared to walk away if we couldn’t make the money work.
She looked at Smith too, a school that is very generous, but in our case it would have cost about $20k per year so we walked away (for lots of reasons, not just money).
@TheGreyKing - sorry for the confusion, no the 78k is not our annual income but what we were told will be the cost per year for UChicago when he was admitted. We are self-employed and can pay the 78/yr, but it’s a huge hit and our EFC was much lower when we ran the numbers…really was shocked that we got nothing at all.
I would really appreciate some help understanding one aspect of how financial need is defined. When I run the NPCs for pricey schools, it seems pretty clear to me that my entire salary (as half of a dual-income family w/ two kids) will be spent on college for six years. If I quit my job, though, both kids would get nearly full rides. I like my job and don’t want to quit, but it really stinks to be working for essentially nothing. It seems like there should be some salary commuted to a non-working spouse who simply chooses not to work. (I don’t mean people who are legitimately needed at home to take care of disabled children, elders, etc.) I could essentially just quit my job and we would be in exactly the same place financially as if I worked. That doesn’t seem right. At many private high schools, they do typically commute a salary to a spouse who doesn’t work by choice. Why don’t private colleges do that?
I think you mean impute, but colleges don’t do that. They aren’t going to say a parent with a law degree should be making $100k per year or a nurse could make $150k by taking extra shifts. They judge the family on what IS earned, not what could be earned.
They use your income from two years prior. So you would have had to quit your job 2.5 years before the first one started college. Then they’d have to get in to the colleges that meet full need. There aren’t too many of them. Not as easy as you make it out to be.
People love to count other people’s money.
Even if you make $200K when your first kid hits college age, it doesn’t mean you have been making that much all along.
Our property tax alone is 8 times the national average. The median house price in my town is $750K; that is NOT an expensive house, a new house, or even a McMansion. That is plain old 1960s 4 bedroom 2-1/2 bath colonial.
Plenty of people who live here commute to NYC and make a lot more than us, yet as soon as the first hits college, they downsize.
Most of us have made practical choices our whole lives - good job, cheaper house in a better public school district, driving vacations instead of flying, etc. We do this because we actually know what “affordable” means. So it is galling to have schools and the government tell us that we can “afford” to pay 47% of our income for as many years as we have children in college, and that if we dare to save for retirement during that period, we’ll, tha not a “choice” our family is making.
Yes, it is a choice. It is a hard and
practical choice that puts the lie to “meets full need”, to “it is really much more affordable than you think” and that “most people
don’t pay nearly that much”. If you are one of the 50+% that are full-pay at the Ivies, it just MIGHT mean your kid really doesn’t get to go. They don’t keep statistics on who took a better deal else where. I think you will find a lot of hardworking families that are “affluent” compared to the national averages who are not affluent at all based on their geographic area really are “priced or” of these schools. If people really could “afford” their EFCs, there would BE no Parent Plus loans. We had to take an Ivy off the table for my daughter for just this reason. She is no less “deserving “ than an accepted low income kid. She is no MORE deserving of taking on crippling debt. Thatnis the choice elite schools give the not-rich-enough. Fortunately, we are used to making practical choices, even when it is disappointing. I just get so sick of this every-kid-can-get-an elite education-if-they-can get-in stuff.
The cost to send kids to college is ridiculous. It is really disturbing that many of our best and brightest are not going to the best schools in the country because of financial reasons.
I understand it I just don’t like it.
The colleges and government aren’t saying that at all. They are saying “Our school costs $COA. If you want to come here, the federal government will give you $0, and we’ll give you $XX.”
We all face those choices every day with what we buy (houses, cars, boats, vacations). We pick House A over House B because it is in a better school district but has higher taxes that go with it. I lived on the last street in a school district. My taxes were almost double those of houses across the street because of the school district, yet I didn’t have kids in public schools. The weather, job opportunities, roads, grocery store prices weren’t better on my side of the street (in fact we paid for trash pick up and water because we weren’t in the city), but my taxes were a lot more.
The whole theme of this thread is to not discount a school based on sticker price. There might be financial aid, there might be merit aid. There might be nothing at all, but you won’t know until you look at the school and what can be offered. I was eliminating schools without investigating FA, just based on the sticker price. Glad I received advice to just look at them.
@Gudmom “I just get so sick of this every-kid-can-get-an elite education-if-they-can get-in stuff.”
You are singing my song. Our EFC is a huge portion of our income. That’s with a husband approaching 60 and another kid just entering high school. We do not qualify for any need based aid pretty much anywhere but we walk right on that line. We live urban but very modestly. I drive a Kia. Our mortgage is almost paid for in our extremely over valued 1800 sq ft 3 bedroom house.
I really think EFC would make more sense if it were something like 12% of your average annual salary over the last 5 years or something like that. Or better yet, over the lifetime of your child. Then our public options should be funded such that pricing would be no more than say 10% of your salary. At least if schools weren’t willing to meet EFC’s, it would be transparent and at least people would have an option. I’m pretty sick of this “meets need” marketing scam when schools get to decide your need.
Just because a school says you can afford 60-70K or any amount a year doesn’t make it a fact. I think financing college especially at private schools can be difficult until you get up to close to the top 1% of wage earners. When 20% of a student body (Yale for example) comes from a FOO earning more than $630K a year and 69% are from the top 20%, that shows some serious slant to higher SE brackets.
https://www.nytimes.com/interactive/projects/college-mobility/yale-university
I would never support making it harder for low income people. In fact, I think it’s hard for many lower income earners. A few win a full need lottery and the ivy gets to promote these stories of SE diversity. Which is great for them, but it’s a facade. Those options are pretty limited.
There’s a good chance my high stat, fully qualified, would love to apply kid will not be applying to any meets need only schools. And may end up at our state flagship depending on how the merit game goes. Our state flagship option is 30K and does very little need or merit based aid from what I can tell. I feel lucky that is somewhat doable for us because it isn’t for many. Some people truly don’t have a financial safety.
@MusakParent Yep, you hit the nail on the head. A % of salary for all would make more sense. Having grown up in a very poor family, I got a free ride to an Ivy ( involved lots of working during college and worrying) but it worked. Now in a high income family, it means really thinking hard about what makes sense. We don’t mind paying for college but it’s not a slam dunk (unless you are top 1%) Top 5% nope, Top 2% maybe. That means that many high stats kids from homes where the income is $150 plus are going to have to make choices. For someone coming from a state where homes cost $150K or even 300K they think those salaries are golden. For someone in NY, or NJ or NE, they know that they will receive very little aid.
Clearly, the price of college is way to high. It’s absurd. But why is any school obligated to give anyone a choice? There’s a formula. It has to be the same formula for everyone. They don’t have to give ANY aid if they don’t want. We have to think of it as, that’s the price and if we get aid it’s a bonus. Either I can afford it or I can’t. I would have liked to have raised my kids in Manhattan. Anyone who wants to raise their kids in Manhattan should be able to have that choice. Alas, there was no financial aid for it. I couldn’t afford it.
That’s why the advice is to start saving for college as soon as the kids are born.
Actually, borrowing (i.e. financing) is part of the equation as to affordability.
For example, the house I live in was “affordable” to me not because I could ever have paid full market value up front, but because I could come up with a down payment and arrange a mortgage that was within my means.
We median level earners who get financial aid are taking loans, and our kids are taking loans. Perhaps there are some -0- EFC kids at very generous full-need met schools who don’t have to take loans… but I think the majority of parents who fit within the NY Times article description of “middle” or “upper middle” class have made it work with a combination of savings, cash from current earnings, and loans. For some it’s a HELOC or other private loan rather than Parent Plus – but some portion of expenses are being paid from loans nonetheless.
And I find it rather tiresome that those who are in upper-income ranges continue to complain about the inequities of the financial aid system and at the same time eschew the financing options they are provided.
95% of Plus borrowers are able to meet their payments (i.e., are not in default) – so contrary to the statement about affording EFC’s, Parent Plus loans are precisely what made college affordable to parents like me.
No one should be required to take loans if they don’t want to – but bottom line, every single college that awarded financial aid also gave me a relatively hassle-free way to finance the balance over a 10 year period. And that wilingness to finance is part of the equation as to how private colleges decide to distribute their grant money.
"That means that many high stats kids from homes where the income is $150 plus are going to have to make choices.
Everything is a choice. You send your kids to the local camp at the public park which costs $50/week or a sleepover camp from your local Y which charges on a sliding scale instead of a fancy private program? That’s a choice- and you get to say “wow, I’m so grateful to have this choice”. You take a job which pays less than what you were earning because it’s closer to home and involves less travel? That’s a choice. You buy a tiny house in a great school district- because that’s all you can afford- instead of a big house in a bad school district? That’s a choice.
I don’t get the whining.Your kids have never had to make a choice before due to finances???
Whining is a stretch. We are just talking about the current financial aid landscape. I said I feel lucky we do have options. If we had a sudden crises - job loss, health scare, etc we may not. Some do not. We do have the ability to chase merit. And no I don’t feel badly about merit given the current financial aid system. It allows some options for middle class families of high stat kids whose financial situations may not really be clear on the FAFSA or CSS.
As long as private colleges receive federal funding and can be treated as non-profits, they should be accountable to the American taxpayer in terms of transparency. Note that not all colleges do. Hillsdale College in MI is a school that comes to mind that does not take federal funding.
Our higher education system is deeply dependent on private colleges to keep ticking. If our public options were affordable for all and had good options for the gamut, and private colleges dropped their non-profit status and stopped taking our tax dollars then they can be completely independent and do whatever they care to do. If we at least had a system where everyone’s EFC was within reach (even with federal student loans) and colleges weren’t meeting that, it would be at least be transparent.
I don’t mind making financial choices. The dishonesty in the marketing of these schools bothers me the most right now. We’re getting e-mails weekly from elite schools saying how accessible they are. Many first world countries have much more reasonably priced higher education at a variety of institutions. It is possible. If the current system works well for you and if loans are easy for you, enjoy. I do feel badly for students who end up with much more than federal limits without a true understanding of what that will look like after college.
@calmom “And I find it rather tiresome that those who are in upper-income ranges continue to complain about the inequities of the financial aid system and at the same time eschew the financing options they are provided.“
I will be 66 when my 3rd graduates college. Just how many years, realistically speaking, can one depend on working to pay back plus loans? This is the reality for us. We have no pensions, our only income will be what we can sock away in our 401Ks. I had to sit my three kids down and show them why the “anyone can afford an education at X elite school” is a great, big lie. We are high income earners now, but not when the kids were younger and in daycare. We cannot take on big loans at the end of our lives, as we could end up losing everything if there are health issues or a job loss. We have a family member in this predicament now, as the son who got the expensive education developed schizophrenia just as he was finishing up. The plans for the son to help with loan payments never materialized. We have several friends whose kids couldn’t find jobs in 2009 and 2010 who had near misses. Our neighbor across the street lost his home. The financial crisis is just too stark, and too recent for many to consider taking on hundreds of thousands of debt for an elite college.
My kids will go to state schools. I do really hate all the mail, books, and other propaganda that my oldest gets sent from HYPSM. One of my kids (he is a high school freshman now) really fell hard for it and it took a lot out of him when he realized that no matter how hard he works, or what he accomplishes in high school, he will never go to MIT.
It has taken a lot to help him understand that MIT isn’t the be all, end all either. He can still do what he wants at any school, and some really smart people went to state universities.