<p>We were paying in excess of $35,000 a year at least!</p>
<p>My husband and I both worked full time. My entire take home pay went direct deposit to my credit union, and out auto withdrawal to some college for 7 years. Kids took out the Direct Loans. Both had jobs to pay for all discretionary spending plus books. No travel for us, no new cars. Mortgage was $1000 a month…very low for our area. We leveraged this when we bought our home…sold a previous home, refinanced, etc.</p>
<p>Number 1 kid went to Boston University between 2003-2007. He had a $10,000 a year merit award, and took the maximum direct loan. We paid the rest. His COA was between $35,000 and $40,000 or so at the time.</p>
<p>Number 2 kid went to Santa Clara University between 2006-2010. Her COA ranged from $50,000 to close to $60,000. She had a $6000 merit award and took the Direct Loans as well. She worked to fund all discretionary spending and books. We paid the rest.</p>
<p>We did not reduce our retirement contributions…and again…we had NO college savings.</p>
<p>My check paid the college bills. My husband’s paid our monthly living expenses (we don’t have cable TV, we didn’t have smart phones at the time, no vacations, watched for sales at the grocery store, etc).</p>
<p>
</p>
<p>I’m saying that a family with an income of $140,000 and *no college savings<a href=“and%20a%20child%20about%20to%20enter%20college”>/I</a> likely has poor financial planning skills.</p>
<p>Now, before anyone jumps all over me… I know that every family’s situation is different, and some families with relatively high incomes might have perfectly legitimate reasons for not having saved anything for their kid’s college education. That’s why I used the word “likely.” I think that situation would be more the exception than the norm. I’m talking about those families that had discretionary income in the years prior to their kid starting college and decided to live in the moment instead of save for the future. That’s your choice to make, but please don’t then come whining to others about your inability to pay anything towards college with a $140,000 income.</p>
<p>@AnnieBeats:</p>
<p>It’s really the US educational system that’s to blame (there is a reason why people think there’s a bubble building, after all).</p>
<p>The bald truth is that everyone except the very rich either have to make major sacrifices or are restricted in their choice of colleges in this country these days. You’re aware of the restrictions on the upper-middle class, but these days, only some of the elite colleges are completely need-blind and meet full-need. So if you’re a poor kid, it’s either getting in to an elite school or it’s CC or working your way through a local directional school (where student support is low and drop-out rates are high). It didn’t use to be this way, mind you. Back 20 years ago, a Pell + Stafford loans + work-study were more than enough to pay for any in-state school (and actually covered a good chunk of the full cost of privates as well).</p>
<p>BTW, at an income of $150K, HYPS (but maybe not many others) should be affordable. As well as your local state schools. Also, if you’re willing to look overseas, college is much cheaper (granted there may be drawbacks). Still, the top privates in a place like Japan (Keio and Waseda) charge in-state tuition prices.</p>
<p>In the near future, I see a lot of colleges failing (most of the lib arts colleges), the “traditional” going-away-to-a-4-year-college experience will be a luxury good that only those rich enough with money to burn will pursue (as well as those few lucky kids who get fin aid there), and everyone else gets their education through a combination of on-line and the future version of community colleges.</p>
<p>^^^ I didn’t have poor financial planning skills, I had poor unemployment planning skills. I was unemployed for basically 3 years before my kids started high school. I then got a good, but temporary, job from which I paid off all my debt, funded a retirement fund to the federal limits, and saved as much as I could for college for two. We also lived many levels below what others in my income level were (rented apt, old car, public school, no entertainment spending) so that I could pay off/fund/save those things.</p>
<p>Many people lost a lot in the recession - jobs, savings, retirement accounts. You can judge and say we should have saved, but there was nothing to save or if there was some savings, it was used for pesky little things like food and housing. Financial aid decisions are based on the last year’s earnings, so it may be the family should have saved in 2006 or 2009, but there just wasn’t any income in those years to save. They could design a FA program that looks at the lifetime of the family earnings, but that would be very complicated.</p>
<p>^^^
I’m not judging you, and clearly you did put some money away for college, despite your difficult circumstances, so kudos for that. Yes, a lot of families have had challenges with the recent financial down turn. But there are plenty out there with extra income who spend on things that aren’t necessities and then have no emergency fund when a layoff or big medical bill comes, or who fail to appreciate how much a year of college will cost.</p>
<p>Probably the biggest unplanned financial drain on family finances is divorce, as both divorcing spouses spend money on lawyers, and then end up with higher costs living separately compared to together (and may also end up with extra costs or lower return due to suboptimal timing of the sale of assets like houses, businesses, and investments). For the kid going to college, fighting over money between the parents may also make them less willing to fund college than before, even though most college financial aid offices assume that they are both willing to contribute (and more so if either or both later marries someone with additional income and/or wealth).</p>
<p>But then we also have other situations where families earning $200,000 or $300,000 or more per year complain about the cost of college (or private K-12) for their kids, due apparently to much of their money going to status symbol goods like a more expensive than needed house, more (expensive) cars than needed, etc…</p>
<p>$300,000 income and complaining about paying for college? How is that possible @ucbalumnus? Was that a joke? I’ve never known you joke around, but there’s a first for everything!! </p>
<p>I have a friend who’s now a financial advisor. She said that she had a client couple in DC who made well north of 200K (they were both lawyers or something) and lived paycheck to paycheck. She was explaining how it could happen. No house, just renting, but evidently, private school for the kiddies is a must (because the public schools just can’t do for their precious little ones) and designer clothes and expensive cars were a must (to fit in with the other lawyers?) and they had to live somewhere upscale (because explaining to other lawyers that they live in a working-class neighborhood was too embarrassing?) and student loans and . . . . well, I had trouble understanding, but she was sympathetic, so good for her.</p>
<p>Wow. $200,000 is an awful lot of $$$. Then add another $100,000 on to that. It seems to me that those within this high income bracket would have very little problems with paying for tuition. Isn’t that the point of it all? To make that kind of money so that your children can have nice homes and a great education? Am I wrong in thinking that? Naive maybe? I don’t make nearly as much so maybe I’m just clueless. </p>
<p>@ucbalumnus I really don’t appreciate you trying to insult me. It’s immature </p>
<p>@anniebeats. I don’t think @ucbalumnus is insulting you or anyone else. He has always been extremely helpful and gives wonderful, sound advice. Am I missing something @anniebeats?</p>
<p>I’m not terribly sympathetic since you need to make a few bad decisions to get in to this predicament, but I can see how it could happen.</p>
<p>Say a combined income of $200K. After all taxes, that will be about $125K. Say both the husband and wife are lawyers/doctors who took on a ton of student loans (like $200K each = $400K total). Loan repayment would be about $25K each or $50K total. That takes us down to $75K. Say they live in a very high-priced area (like NYC) where they feel they “need” to live in a place in an area with the space that costs $4K/month (all in, including property tax, etc.). That takes us down to $27K. A little over 2K a month for a couple and say, 2 kids. Retirement hasn’t been funded yet, and 2K a month flies out the door in a high-price area with 2 kids if you want a lifestyle anywhere close to the typical lifestyle of a lawyer/doctor. If they feel that they can’t “deprive” their kids of stuff like private school, then they have to borrow. If one of them goes unemployed for a period of time and they don’t cut back, that’s even more borrowing (at exobitant interest rates if through credit cards).</p>
<p>I have a co-worker who’s wife went to 4 years of private school for a bachelors, then 2 more years of private school to get a nursing degree, then 2 more years of private school to get a communications degree. Her parents are well off and paid for ther undergrad degree, but now she’s decided to stop working to spend more time with their son, so my co-worker is paying off her 2 masters degrees. They’ve decided to go without health insurance (and I’ve told him that that’s insane with a kid, especailly since our company subsidizes health insurance).</p>
<p>
</p>
<p>Agreed; that is insane. Rolling the dice, with the health of your child in the balance if you go bust.</p>
<p>When buying a new car recently, that wife decided to go 10K above the base model (for heated seats and a sunroof, etc.) instead.</p>
<p>I can’t say I understand some people.</p>
<p>@NewHavenCTmom I had made a thread about private school, and he is essentially saying that I am fiscally irresponsible for the decisions I’ve made at the request of my husbands family. </p>
<p>“But then we also have other situations where families earning $200,000 or $300,000 or more per year complain about the cost of college (or private K-12) for their kids, due apparently to much of their money going to status symbol goods like a more expensive than needed house, more (expensive) cars than needed, etc…”</p>
<p>It’s childish. </p>
<p>@thumper1 - wow! Impressive. Of course, the 1k mortgage (including property taxes?) was a big help - that’s five or six grand right there that most folks (including us) don’t have. As were the kids’ loans. But how about health insurance? Did you reduce that? Our health insurance alone is 2k per month. Granted that’s high, but the alternative would be to set aside money for deductibles and with several kids there are always broken bones, ER visits, etc. How about car and homeowners insurance? Again, we’re paying a good bit on that, but if we get sued for something, couldn’t liens be taken against us if we don’t have maximum coverage? It’s one thing to get sued when you don’t own your own home and don’t have much of an income - can’t get blood from a stone. But when you’ve feathered a decent nest - and we easily own 75% of our home - doesn’t it need to be protected? As far as retirement goes, were you maxing it out? If not, do you have separate pension(s)? Perhaps our maxing out our 401k’s is selfish on the part of my husband and me, but it’s all we’ve got and it’s non-negotiable for us. On the flip side, if we did let our kids attend high cost colleges, ALL our charitable contributions would stop, so we’re not completely out for ourselves by making our kids attend affordable schools. </p>
<p>I know I’m a bit neurotic about keeping the family budget (the Dave Ramsey “nerd”), but that’s enabled me to calculate exactly where we’ll be getting the funds to pay for college and what would have to go in the case of paying for a high cost college. We’re over 140k in income but there’s no question, too much over 30k in tuition, and we’re looking at some combination of student and parent loans. And it’s not ridding ourselves of the cable and cell phones that’s the problem, it’s cutting the big ticket costs (insurance, retirement) that trouble me.</p>
<p>@AnnieBeats:</p>
<p><em>shrug</em> Everyone is entitled to their opinion.
Personally, if I made 150K and my spouse’s family requested private schools for my kids, I’d ask them to pay for it. If they can’t, well, I personally believe that the network and opportunities coming out of some colleges are worth more than those of almost all private schools.</p>
<p>However, I do have some sympathy, as my co-worker evidently couldn’t/wouldn’t stand up to his wife over the $10K in heated seats and sunroof even though they’re going without health insurance right now. It’s a tough situation.</p>