<p>I am amazed at how little money people I know (middle class to upper middle class) have saved for college. I am also amazed at the entitlement factor that plays into some of the decisions people make regarding college. A friend who had very little saved for college told me when her son got into Brown (no merit), that they were going to send him there via almost 90% loans because he had earned the right to go there by getting in. This was the same family that gripped because they didn’t have the money when the football team players had to spend $100 on pre-game meals for the season. These parents are both attorneys (though only the dad works). This kid also got some excellent merit offers from non-Ivy schools.</p>
<p>People make bad financial decisions all the time. It’s a near epidemic in this country. Should be interesting to see how the baby-boomer generation manages to live off little more than social security and a paltry 401(k). That, IMO, is going to be the downfall of our economy. If a large portion of our population has little money to spend, there will be no need for jobs.</p>
<p>Using the term ‘middle class’ and how they afford college tuition is a very broad question…Middle class is very local in terms of income…In northern NJ ,it would be an income of 100k+ , and a 500k home would not be anything highend…in the middle of idaho, 50k+ might be perceived as ‘middle class’…</p>
<p>I’d like to know how the family making $100K/year can afford a $500K house plus paying full freight for a kid to go to college. I run “typical” numbers and their mortgage is likely eating close to 30% of gross…and if they had to pay out of pocket for 1/2 of a 50K/year college bill (which assumes that they have saved $100K) there’s over 50% of gross income.</p>
<p>And in the Boston area $500K for a house is not considered to be high end either…although you can still get a nice place for that price.</p>
<p>^^becuase you neglect to consider that probably All those people have been in the housing market for decades,so if they traded up once or twice, their equity is above the norm^^ so their mortgage payments are likley very managable</p>
<p>they didn’t rent for 20 years AND then buy a 500k home,and pay full freight at a school</p>
<p>Some of us live in much cheaper areas of the country. Average house prices about $150,000 in TX. Plus no new cars in 10 years. Plus no extras like housekeeping, lawn service, dinners out, vacations, etc. We didn’t have any savings when D1 began college search, but were lucky enough to have two incomes (even though one is part-time), no debt and a very frugal lifestyle. We pay about 1/2 of COA and it really hasn’t affected our lifestyle too much. But we still seem blessed compared to our neighbors (we live in low-to-moderate income neighborhood.)</p>
<p>No wonder parents can’t afford to pay their EFCs, with mortgages that average 6x annual family income. In my county in rural Illinois, median family income is $52,208 and median value of owner-occupied units is $122,500. </p>
<p>Our oldest attended a school that met 100% need & our EFC with PROFILE was same as FAFSA. The EFC was roughly what costs would have been at an instate public school ( although the public did offer some merit aid).</p>
<p>We took out 529 savings plans for both our kids when they were born. We were able to live off one paycheck and it wasn’t easy, even though our home was paid off, because neither one of us were high income earners during those earlier years. (After graduating from college I moved home for 2 years and saved enough money to put a down payment on my first home, which was then shared by my brother and a close friend of mine to help me pay the expenses.) </p>
<p>My D is now a senior Accounting major at BC and my S is a freshman Engineering major at Cal. As most of you probably know, BC is not very generous with merit-based aid. We were quite relieved when she got a Big 4 internship last summer and then was offered a permanent position when she graduates this upcoming Spring. During the summer internship (which she attended in San Jose since we live in CA and she wanted to be in the Silicon Valley), there were many kids in attendance from ALL schools-- including several CA state universities. So, I guess I would agree with others who mentioned it is more about the performance of the student than the reputation of the school. Choosing the right major certainly helps as well.</p>
<p>If we had to do it all over again with our first born? Although her experience at BC has been incredibly rewarding, my wife and I both agree that we would have steered her toward a more affordable school, even though most of her undergrad eduacation is/was already paid for. Living in CA does have some advantages, even with the current state of the local economy, and our UC system is STILL a good one. More people should take advantage of their in-state options, or go to a less prestigious school offering merit aid, and not go into huge debt.</p>
<p>Annasdad, you are also missing the very important fact that a significant # of those people have been in their homes for a long time,so the real costs to them are significantly lower…we purchaed in the mid 90’s house was 300k ±, sold in mid 2000’s and even with the housing decline, it stillworth around 700k…so you can’t just link median value and income?..few, if anynmake a 500k home their 1st purchase on 100k salary</p>
<p>I have to agree with jshain: I think that student performance plus choice of major explain MUCH of student employment at graduation (since student employment appears to be one of the metrics we’re using to identify “success.”)</p>
<p>My D is also a senior accounting major, but she attends a school that many on CC would not recognize. She interned last summer at a Big 4 firm and has a job offer now upon her graduation in May. She also had three other internship ofers for the past summer. I attribute her popularity with employers to her stellar grades, her intense preparation for her internship interviews, and (somewhat) to the local reputation of her school and its accounting dept.</p>
<p>Really, aren’t we all just using the experience of our kids (and that of our friends/acquaintances/etc.) to make these arguments and validate our choices?</p>
<p>My son is in his first year at a pricey private college and we pay full tuition. He absolutely loves the school and is having a good experience. This isn’t always true, but private schools usually have smaller class sizes and better opportunities to establish relationships with the professors and other students. It was important for him to go to a school that had a certain prestige (from his point of view) because he will work harder to succeed and stay engaged. </p>
<p>There are many articles about how it doesn’t matter where your child goes to college because if they are going to do well, then they will do well anywhere. However, there are just as many articles that state that students do better at schools when they are passionate about the place. Knowing that they are somewhere that will lift their game.</p>
<p>"In all honesty I don’t know how people with middle-class incomes can afford it…but then again I don’t know how those same people can afford to buy a $500K house either.</p>
<p>They’re in debt up to their eyeballs…"</p>
<p>Even for CC, this conversation thread seems to be awfully self-congratulatory and elitist. There’s a certain tinge of “these riffraff are not worthy of a big house, and their children are staining the peerless standards of Hoity Toity U” We are a middle, middle class family, about to have 2 children in college. We live in a appraised value house of about $395K – bought after living in a tiny ranch house for 12 years, all the sale turned over into a downpayment that brought our expenses in to line with our income. We moved here knowing that my husband’s cut in salary from private industry was recompensed by the tuition discount for staff. We opened 529 accounts and put what we could into them. Our students live at home and commute for their first year of school. They work every summer, and save most of the money. We don’t go on vacation, we don’t look at ivies, we don’t pretend that the “brand” is better just because it has a higher pricetag. We have $4K in student loan debt, and the only other debt is mortgage. But if it makes you happier to think all middle class people really aren’t as well off as they seem or as happy as big income families, go right ahead.</p>
<p>As for the poster who commented that the pricetag is worth it as long as there are no academic difficulties, I do not share your worldview. Most students have academic difficulties at some point. Life is a journey, education is a journey, and I do not think it serves students well to reduce it to a destination. (4.0 + Job = worth it, all others abandon hope of being “as good as”)</p>
<p>Me, too. Paying full freight for two kids, one at a top university and one at a top LAC. Opened 529’s the week they were born, and saved extremely aggressively for college from the get-go. Paid off our house a few years back, pay cash for our cars, and have never had any debt aside from the now-paid-off mortgage. Live below our means in terms of the size of our house and all of those accoutrements; no interest whatsoever in keeping up with the Joneses, especially because the Joneses all seem to have huge houses and send their kids to the state school. Prefer to spend our money on experiences (such as travel) and education. Can’t think of anything I’d rather spend my money on than my kids’ college education, and wrote those checks with pleasure. We were blessed to have had our educations paid for full-pay and honored to be able to do the same for our kids (and our grandkids, knock on wood).</p>
Sounds like you have a good financial footing and you can take advantage of tuition breaks…but there are a lot of people out there who unfortunately are looking at paying full-freight out of pocket.</p>
<p>None of my comments were meant to be elitist, I was just wondering how people in our area who are paying full-freight for a university education for one or more kids and have an average (median-priced) house manage. If I were in that situation I don’t think I could. Would that make my kids any less worthy of a nice house or the opportunity to go to a good private school? Not at all…I just don’t know how the numbers would add up.</p>
<p>In my family of 4 kids who went to private colleges, one feels she got little out of it, so in theory my parents could have saved their money on that one. But I absolutely could not see her at any of my state’s public schools (especially not back in 1984, when she graduated from HS). If there were a good public LAC in the state, that might have made sense for her.</p>
<p>For anyone who has the money saved and paying full freight, you may want to pay for 4 years of tuition upfront in exchange of keeping tuition flat over 4 years. This would take out the market volatility and mitigate tuition increase.</p>
<p>Not in Bergen County, but the numbers are probably similar for my NJ county as well. Sure there’s equity to tap into–for us, we’re lucky that we actually got into real estate a decade before it went crazy, so we actually do have some equity. </p>
<p>Our family is a huge priority for us…I would certainly love to move to lower cost of living state, but that would mean leaving our 94 year old great-grandma, the grandparents, the cousins. So we choose to stay here and get squeezed. Not sure if family is a priority that Annasdad considers worthy, but at this point, it drives our choices. </p>
<p>Here’s what $488K gets you in Paramus…it’s not a McMansion, if that’s what you’re envisioning.</p>
<p>As far as paying tuition…we’re not there but it seems so dependent on the student and their needs. DD right now seems to really need smaller classes and one on one learning, so that’s not boding well for Rutgers in the future…</p>
<p>Did you do that, oldfort? One of my kids’ schools offers that (prepay all 4 years upfront to keep tuition flat), but based on how much tuition had increased in the past few years and what we thought we could get in the market, we thought we’d do better foregoing it. However, if we could have put it on a credit card and gotten the miles … !</p>