<p>It is always best to save for college. Getting into a college that will give you a bunch of free money is a bet that very well may not pay off. Saving money results in real money that is there to use to pay for college or any other needs that arise.</p>
<p>And imagine even worse if those who have mix with those who have not and produce offspring!</p>
<p>I think most people would choose to keep on working. Many people do think about life after kids. If someone chooses to stop working while kids are in college just to get FA, then that person is stupid. If you have a special skill or senior enough of a manager, by not working for few years, you are pretty much guaranteed of not having a job to go back to.</p>
<p>
What? Going back to work at Walmart? That would get you maybe $9/hour. Any professional (investment banker, lawyer, doctor, scientist…), if you are out of a job for more than few years, you become obsolete. Do you know how many women I know who continued to work while their kids were young even though what they made could barely afford a babysitter after tax? They did it so they could continue to work after their kids start school.</p>
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</p>
<p>That’s a two-government-attorney family, not a family with one $300k attorney and one stay-at-home adult. It might also be a two-working-stiff-attorney family. Shocking but true, not all attorneys earn $300k in private practice. Some don’t even earn $150k a year. </p>
<p>Speaking of lifestyle choices, what’s up with the family where there’s one adult earning $300k and the other adult is lazing around at home, playing tennis and supervising the home staff? Why isn’t that other adult working–and why did the $300k earner squander their opportunity (like many of their other classmates) to marry someone who would also be working and bringing in capital? At the very least, the $300k earner could have married one of those lazybones $150k government attorneys. Why should colleges reward the $300k earner when their classmates, with the very same dating opportunities, managed to marry go-getters with higher earning capacity?</p>
<p>:rolleyes:</p>
<p>To be serious for a moment: there could be a hypothetical case where having one of the $150k earners retire early brings in big FA bucks. That requires closely spaced kids, all of whom gain admission to tippy-top colleges. It means that the parent who retires early gambles that the kids are going to be getting into these colleges, and quits work in January of the year that kid number one is a high school junior, so that the FAFSA and Profile show the drop in income when the kid applies for FA in their senior year. It means that there is no substantial emergency fund, no equity in the house, because that’ll show up on the Profile. No big non-retirement investments. No savings in the child’s name. Since the family would have to be spending most of their income (since it’s not being saved or invested), that means a big lifestyle change when one parent stops working. Whether the family prefers to spend on services (household help, private school), luxury goods (cars, clothing) and/or experiences (vacations, dining out), they’re going to have to cut way back on that…all for the gamble of getting big FA.</p>
<p>Most people would stop here, but our hypothetical family is hard-core. After all, they’ve got brilliant triplets. And huzzah, the triplets are all admitted to a tippy-top school that asks only 10% of household income per kid. The triplets only have to pay $15k a year each, or a mere $45k total for all three. Compare that to the $150k the family would have to pay up each year if both adults were working, and they’re saving $400k in after-tax dollars, or $800k in income. The parent who retired early gave up $600k in income during the four years that the triplets are in college. So, the family saves $200k in income…or about one year’s work. That takes care of the extra year that the early-retiring parent took off back in the triplets’ junior year. We are just about at break-even financially, if we don’t count lost benefits such as employer contributions to retirement funds. </p>
<p>That’s break-even for an exceptional case: three children in college at exactly the same time, at schools with single-digit admission rates. </p>
<p>
</p>
<p>But not necessarily at the same level of responsibility and rate of pay. Big, big, big gamble. In the current economy, perhaps not a gamble that most would want to take.</p>
<p>SAY- no, no and no.<br>
*If the family has more than one child in college they could at some schools receive 70-90k in aid which would almost equal the take home income of the spouse *</p>
<p>Huh? Where do you get these numbers? We’ve got two in college, earn less than 150k and we don’t get any 70-90k. We get a very generous package, but those are unrealistic numbers. I wonder if you have some specific individuals in mind- some scoundrels you know…</p>
<p>You can’t play fun with numbers and use that as a basis to indict whole bunches of people. First of all, where do you get the idea that, all those years ago, some educated people purposely chose lower-paying jobs that YOU consider easy, with future tuition breaks in mind? It’s a rather narrow view to think that earning less than some theoretical maximum is some flaw in judgment or an ethical misdemeanor. And, you can only define for yourself what’s easy or of value.</p>
<p>In fact, nurses, ministers, school teachers, college professors, public health officials and many people working in “public interest” scientific fields may have chosen their work based on the satisfaction of the good they are doing. These jobs may simply not pay commensurate with the number of years of college and post-grad. I daresay, the college prof has more education than a lawyer and is paid far less than 150k or 300k. Oh, but with a PhD, all those years of education, he/she should pay what a wealthy lawyer pays? Is that the standard? Or, was he foolish to chose that field? Is he cheating, to get more aid? A slacker?</p>
<p>CC has a number of recent posts from 150k folks who got shafted, left in the cold or with what they deem an insultingly paltry amount of aid. Compare apples to apples. Don’t tell us a family earning 150k got “need based” finaid without mitigating circumstances. Quitting one’s job to reduce family income from 300k? Doubt it. Since the CSS Profile asks for the prior two years’ tax forms (eg, 2010 and 2009,) that person would need to have quit before any substantial earnings in 2009, to benefit from finaid in the fall of 2011. And, at 150k, they still need those mitigating circumstances. </p>
<p>Ok, numbers: you can’t talk pre-and post-tax issues at the same time. You can’t claim 60k for college is 100% of 300k. And, you can’t add back in discretionary expenses, (which can vary wildly- you might be paying for an Escalade and someone else might settle for a Ford.) </p>
<p>At 300k, the net after all taxes and mandatory “contributions” is about 214k, per online calculators. 60k in college expenses is about 28% of that net. At 150k, the net is 114k/year. 60k is about 52%. Yes, I think these are steep percentages. But assets also come into play- and why not? The family earning these generous amounts (far higher than national averages) is assumed to have a higher level of investments and thus assets. Retirement (protected,) wealth accumulation…and college expenses. C’mon, at 300k, one takes home about 17k/month. </p>
<p>So, you don’t want to spend the extra for college? Then, don’t. You wrote: the current FA program punishes responsible behavior since it makes almost no sense for anyone making 250k-300K to bother to save since the money will just count against you. Count against you??? No, it counts toward your kid’s education costs. You have it. You have more of it than others do. Would you also say, it makes no sense to save for retirement because some others may have less and get lousy govt healthcare or nursing aid sooner than you do?</p>
<p>It’s called Financial Aid because it is aid, help, assistance. Help paid for by the taxpayers, or by the generous donations of people who have been successful enough to have some to share with others. The goal, in general, should be not to need any help. It isn’t punishment not to give aid to Mr. $300K, any more than it is a punishment not go give me food stamps. That’s looking at it all wrong. </p>
<p>As for the $300K lawyer vs the $150K one, who are you to say that the one who gets paid less has a “better lifestyle”? The $300K lawyer is already being rewarded for whatever extra effort he might be expending, because he gets paid more. It must be worth it to him, or else why would he not just go get one of the $150K jobs? I’m sure there are other lawyers who would be eager to step into his shoes. As has been pointed out “easy” is not in any way correlated to “pay scale”. If you are going to base your aid scheme on judging people’s lifestyles, then you’d better prepare to mow a wide swath across the poor.</p>
<p>No one is forcing the $300K lawyer to spend $50K per year on his child’s college education. He can choose a taxpayer funded state school, of which there are many fine ones. If his kid has the chops to get into HYPSYM (the only likely places the $150K lawyer is getting aid), then the kid can certainly get merit at some fine lesser ranked schools as well. </p>
<p>Of course, since endowments to colleges can specify how the scholarship recipients should be chosen, people who don’t like the current system could presumably set up scholarships for those poor unfortunate richie rich kids :).</p>
<p>It’s interesting that in this thread, kelsmom does acknowledge that income is largely a choice for many people (including herself). In a thread from a few weeks ago, she was strongly in opposition to that concept.</p>
<p>I raised that point in the context of the “choices, choices, it’s all about choices” CC mantra. There are choices for what you spend, but also choices for what you earn. People here often don’t often acknowledge the earning side of choice.</p>
<p>Here’s where the earning choice enters in: </p>
<p>
That’s exactly the business that they’re in today. The colleges do require that some people subsidize others because they made different choices.</p>
<p>But it’s not “the right path” or “the wrong path”; that’s just opinion about choices. In this context, the more relevant terms would be the “subsidized path” or the “subsidizing path” - which is the actual policy around choices.</p>
<p>Financial aid is based on the visible evidence of ones ability to pay which is what they make and what they have. Anything else is pure speculation. It’s “show me the money”. It also would be prohibitively time consuming and expensive to be evaluating people on what they "could " be making. It’s a tough time right now in the aid offices with folks arguing what is actually there on paper as to what they are making and what they have and basing what they can pay on those hard figures. Could you imagine having to weigh life style choices? </p>
<p>Those who choose to make less money, save less money, pay for these choices in the lessening of options that take money they don’t have when such opportunities present themselves.</p>
<p>If colleges should based financial aid on wild conjecture (“Ah, you may only make $40k a year now, but if you had done this, this, and this, you would probably be making $270k, so no aid for you!”) then it should work the other way too. After all, you might have made other choices and wound up living in poverty. Sure, you’re a wealthy stockbroker now, but theoretically you could have made some bad investments, or developed some expensive medical problems, or some sort of drug problem and wound up in penury. Who knows? </p>
<p>Seriously, colleges can only make decisions based on the information they have now. We can take a guess, but no one really knows for sure what might have been.</p>
<p>On the other thread, MisterK sugested folk could be plumbers- which can be quite lucrative. Though I was on the other side of that argument, it’s a good point.</p>
<p>It is a bit of “let them eat cake” to assume everyone has equal opportunities to get a high paying job and perform it well enough to grow to a huge salary. And, we are discussing a very huge salary level on this thread. So, what do we do? Tell folks they didn’t have to be college profs or minisiters or whatever? That it was their choice to work for a business that relocated or closed? </p>
<p>See the inherent flaw? SAY’s question is predicated on the notion that the lawyer earning 150 somehow a) has it easier and b) made a free-will choice. If SAY is a lawyer, he or she should know better than to base the argument on this.</p>
<p>And, folks, which of you have not been hit by the economy? Know anyone earning well who lost a job? And, can’t replace it? If you were going to come up with a finaid formula, wouldn’t you try to base it on the most rational info you can collect from a family? </p>
<p>That would be income and assets, with a calc for number of kids and number in college. The formulas already incl calcs for cost of living, nearness to retirement age, state taxes, etc and some protected amounts. Or, would you penalize the ones who had more kids to take care of?</p>
<p>
Right, and you have to base it on the most objective criteria. People would not be able to come to agreement on evaluating the lifestyle choices of families. It would be far too subjective in most cases to make any clear determination.</p>
<p>Whether someone could have been earning more money at a different job is **absolutely **irrelevant; determining EFC based on past earning potential is sane and reasonable only as long as you’re fine with getting imaginary money from that family.</p>
<p>“Okay, you can only pay $25,000 now, but you could have been earning $400,000 a year if you’d gone to med school instead of becoming a photographer. We’ll charge you $55,000 because otherwise we’d be rewarding laziness.”</p>
<p>“Sure, that’s fine. I’ll pay you $25,000 in real money and $30,000 in hypothetical money, is that all right?”</p>
<p>“Totally, that’s fine.”</p>
<p>Also, the assumption that anyone who’s making less money than you is doing so by choice reveals a staggeringly privileged way of thinking.</p>
<p>
Exactly the opposite. My husband and I are far from privileged. In fact, he is functionally illiterate. But he works two jobs and I work a great deal of overtime to bring us up where we are financially (in the $200k range). It’s people like us, whose salary is on an hourly basis, who can really make a change by working more. People in white collar jobs really can’t. I agree completely that colleges should determine aid based on what is, rather than what could be, but I also think that judgment should not be passed on a family based upon a number. We look pretty well off on paper (which we are – and are gleefully grateful to be able to pay our daughters’ way through college), but many people who make less money than we do at more presentable jobs wouldn’t give us the time of day. So the bottom line is that most of us do the very best we can for our kids based on our own situations. Families like us don’t need the financial benefit for having kids who are first generation to attend college, but there are non-monetary gaps in their lives and experience (and I think this is true of all families with no history of higher education) that could benefit from some of the support given to low income, first generation students. There are all sorts of little things that we don’t know and questions we never asked which educated families take for granted. Kids like ours could use a helping hand in that regard.</p>
<p>It’s interesting that in this thread, kelsmom does acknowledge that income is largely a choice for many people (including herself). In a thread from a few weeks ago, she was strongly in opposition to that concept.</p>
<hr>
<p>Perhaps sarcasm is wasted …</p>
<p>The fact that I acknowledge I made a choice doesn’t equate with me agreeing that it is all about choice. Duh … obviously I CHOSE to stay home. We do get to do that in America (as opposed to some countries where a woman staying at home has nothing to do with her personal “choice”). </p>
<p>Please refrain from connecting MY dots.</p>
<p>So how are college costs different from saving for retirement? Based on most of the arguments posted the logical extension would be to have the gov’t give extra retirement money to people who haven’t saved enough. Do we really want a policy that rewards irresponsible behavior or a lower than possible productivity level. The problem of course is that there ultimately will never be enough money. A few of you have complained about my comparison between a gov’t attorney and working at a major law firm. This big distinction is well know to most attorneys and indeed it is a pure choice for many attorneys. The crushing pressure of billable hours versus a much more balanced life. In the past these long hours were often rewarded with a good chance at making partner but today that is never going to happen for 8-9 out of 10 associates. The real question remains about the wisdom of having a system that severely punishes saving and rewards spending under many circumstances for upper middle class or affluent families. The other thing to keep in mind is how these policies effect the issue of gov’t/state pensions. There are thousands of familes getting large FA who have lower incomes but huge pensions. A state pension of say 125k which is now not uncommon equals the retirement sum of say 2.5-3 million yet this family would get huge FA at top schools with two enrolled. But the working stiff in the private world must save their own money for retirement all while paying the full bill for tuition. In many cases the family with the lower income by some estimates would actually be wealthier but pay far less in tuition costs. This is not some made up issue and is happening every day in every major city. Most of the professionals I know are forced to work well into their 60’s paying full tuition while the people with pensions retire at 55 often far better off yet getting nice FA and not even paying state taxes. This is precisely why the colleges should not be in the business of “determining fairness” for tuition costs.</p>
<p>For those of you who doubt there are people making income choices here is a personal story from a different thread. So after reading this do you think this double professional family should get FA and in essence have someone subsidize them for the purely personal choices they made?</p>
<p>"Our family offers a neverending saga of educated but downwardly headed from an economic standpoint. By choice. My H almost broke the mold as a physician, but did manage to find the least paying path there (inner city clinic pediatrician) before chucking it all for the bottom of the teaching ladder. I ditched a PhD program long ago, and am now on the verge of quitting my lowpaying full time work for part-time adjuncting. My D has an elite LAC education (Phi betta Kappa yadda yadda) but works a lowpaying but fulfilling job in a field she’s passionate about. S ditched three and a half years of Ivy education when it stopped working for him, works in the same area as his sis.</p>
<p>We’re all still eating, and have roofs over our collective heads. And we all appreciate our educations and use them every day. Just never really appreciated the ‘education equals career’ connection"</p>
<p>Yes, there are some lower income students who get phenomenal financial aid packages. However, it is only those that have the stats, and are accepted to, top schools. The vast majority of lower income students have few options.</p>
<p>It is not like food stamps, for example. Food stamps are available to any eligible family that asks for it.</p>
<p>Most lower income students have no choice but to attend community college, commute to a state school, or maybe one of the work colleges: [Welcome</a> to the Work Colleges Consortium! | <a href=“http://workcolleges.org%5B/url%5D”>http://workcolleges.org](<a href=“http://www.workcolleges.org/]Welcome”>http://www.workcolleges.org/)</a></p>
<p>Or they become one of the horror stories we read about where they borrow $100K to go to a “dream school.”</p>
<p>On the other hand, kids from wealthier backgrounds, in general, have more choices by virtue of having more funds at their disposal.</p>
<p>Yes, saving for college can be akin to saving for old age. I have two old ones who are now not so happily living with us because they did not make the arrangements to choose how they spend their old age. And they are lucky as there are nursing homes filled with ones like them sitting in a row in wheelchairs on Medicaid. </p>
<p>If you don’t save for your kids college, you takes your chances. You take the chance that maybe s/he’ll get into a school with sufficient merit/ financial aid that the family can swing it. You take the chance that you are earning enough to pay for it out of current income. You take the chance that you can afford loans to pay for it. Sometimes you win. Everything falls into place and you have enough money with loans, scholarships, aid and from income to pay for the college choices your kids want. Sometimes you lose, and your kid commutes to college, working part time and borrowing.</p>
<p>Do we really want a policy that rewards irresponsible behavior or a lower than possible productivity level…</p>
<p>What is irresponsible behavior as it relates to this thread? Having a job that pays less than you “could” make if all the ducks lined up in a row and whistled? What is “lower than possible productivity level?” The school teacher who could have gone into business instead? These are loose ends. </p>
<p>The real question remains about the wisdom of having a system that severely punishes saving and rewards spending under many circumstances for upper middle class or affluent families…</p>
<p>The quote doesn’t mention what finaid that family got or what struggles they are going through. Are you saying that the doc should not work for a clinic because he could work in private practice? Are you saying they have it easier? Or, is this an example (?) of how that family is selfish and scamming? Btw, yes, I believe this family should get more finaid than the family earning 300k. </p>
<p>With 17k coming in each month, you can buy a million dollar home, turn up the heat in winter, take vacations, and do all the rest of the things many families cut during college years. And, still have an obscene amount left over.</p>
<p>Mortgage- 5k, say property taxes are 1500/month (high) and the two leased cars cost 1500/month. Only adds up to 8k. What do you do with the remaining $9000? If you save at an annual rate of 10% on gross (2500/month,) still leaves you S6,500.00 per month. I am really thinking Marie Antoinette here.</p>
<p>In contrast, a college prof at 100k nets 6500/mo. You think his job is easier and his lifestyle is better? You don’t think he’s going to be working past 65??? </p>
<p>How isolated are you?</p>