<p>Sally- Dasani is a poor girl in NYC who was named after bottled water. You’re right. It’s off topic.</p>
<p>Missb, great post. We are in a similar situation, large income now, but for most of our marriage it was a small fraction of what it is now. Like you, we did make choices, including the one to buy a home finally when D1 was in high school. We are glad to have a place to put down roots and feel very blessed. Additionally, our first two kids each got the perfect education for them and my husband and I are gleeful that people like us were able to make that happen. We are now starting to consider the college future for our last and most challenging child. We do not consider ourselves upper middle class, but we do consider ourselves to be high income now and for us the difference between this and dirt poor is the options. We have some now. Which doesn’t mean that even involved, thoughtful people can’t be surprised by aspects of the college process. It is a complicated thing, but it has absolutely nothing on the horror of the NYC high school, process. I know plenty of families that are too traumatized by that to even consider college until the last minute.</p>
<p>A person with a take-home salary of 160K after taxes with two kids at private Us at the same time only has to live on 40K a year if we assume 0 college savings and that loans are out of the question. I understand that the huge expansion in college costs means that even someone who has been saving responsibly can be hit with sticker shock. I also understand that not everyone making 250K when their kid is 18 has been making that kind of money all along. But I have to believe that in most cases, someone isn’t going from a very modest salary to 250K overnight. Plenty of people save at least some non-trivial amount of money for college on less than a quarter of a million dollars. </p>
<p>People are justly leery about loans, but at that income level, taking out some amount strikes me a a reasonable investment. This isn’t the case of the poor schlub who is barely earning more than subsistence as is but borrows money so that Junior doesn’t have to go to the state school with the rest of his class. Obviously a catastrophe like a lost job or major illness could make all your plans go awry, but it still seems to me that someone with a reasonably stable income could responsibly take on some modest debt to get through the dual tuition years.</p>
<p>^Agree completely. And people who are making $250K most likely have amassed other assets such as a house in which they have some equity.</p>
<p>All that is true. But we do weigh a variety of factors. </p>
<p>A few: we had two kids in 15 months. They are a year apart in school, meaning that under the best scenario, we will be paying one tuition the first year, two tuitions for the next three and then one tuition in the fifth year. That’s best case, and since both kids are likely to go for engineering, well, that’s truly the best case scenario. </p>
<p>When we crunch the numbers, we know we can pull up to about $60k/year out of our current salary to pay for two tuitions with some pain. I’d prefer to spend $50k/year at the state university (for two kids). Yes, we have 529 plans to soften the overall annual expense, but we long ago decided not to borrow $, thus the $ constraints because we know that costs will rise each year and we have a few years to go before they head off to college.</p>
<p>Dh is in his 50s and has worked for the same firm for 26 or 27 years. He makes way more than I do (because I only returned to work not quite 6 years ago). We know we are lucky that he continues to work for the same firm. But we do not exactly expect him to retire from there. He might. Or they might downsize. Or he may not be able to work past his 50s (the bones in his back are slowly, painfully fusing together). Taking on debt may work out on paper given our income, but the stark reality is vastly different. It’s not a risk we are willing to take, thus no loans.</p>
<p>We can even divert money from going into his 401k and our other investments during the college years, but again, not exactly the preferred method because we are so focused on retirement.</p>
<p>Ditto on taking out a home equity loan. I’m very risk-adverse. I wouldn’t be okay with that (too many childhood issues of losing the family home to do anything but continue to pay it off at the accelerated rate.)</p>
<p>But we have choices, and I’m grateful for that. I’m fortunate. I get that. I just don’t see our income as some magical elixir that will allow vast choices in colleges for our two kids. Our future retirement - which for dh could be sooner than we’d like - has always been foremost in our financial planning. Taking out college loans has been a non-starter.</p>
<p>Colleges determine your EFC using three types of income- past, which is what you have saved, present, which is what you are earning now, and future, which is your ability to borrow. Any parent at any time can decide that they don’t want to liquidate their savings (or sell stock in a down market), or don’t want to borrow, or don’t want to take a cut in their standard of living from present salary.</p>
<p>But to claim that someone earning a gross salary of 250K is somehow a victim of a college’s unwillingness to give them financial aid shows a fundamental misunderstanding of how college financing operates. No, the college doesn’t expect you to write the tuition check out of current earnings. But if you don’t have (or are unwilling to use) savings, most people at this salary level will find it extremely difficult to swing tuition without using some form of debt (borrowing against an insurance policy? HELOC?)</p>
<p>Someone with assets is always going to have more options than someone without. I get that this is an emotional issue for many people-- but like any other financial decision, you’ve got to put emotion aside and figure out the most rational financing plan. I know people who think nothing of financing a big screen TV or an expensive watch via a credit card (you want to see high interest rates to buy something which depreciates 30% in a day? Go buy a consumer product) and then insist that they couldn’t possibly take out a loan for college and the colleges can’t possibly understand how hard it is to pay tuition on their salary.</p>
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<p>The KIDS could, though, even if the parents aren’t comfortable doing so. Most kids from low to mid income families do.</p>
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<p>Ah, but they do all the time. It’s really more like $25,00 for a couple years in Michigan escalating for junior and senior year and $80,000 gross gets you Federal Direct Loans and maybe a $1500 regents scholarship and $300 from the state.</p>
<p>That’s very true, and we’ve mentioned that hand in hand with our “state u or equivalent cost” and “no debt”. I’d prefer that they not take on loans. But of course I’m of the mind that the state university’s ABET engineering program is more than sufficient 
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<p>But this isn’t all about me and mine. </p>
<p>I’m grateful to have the choices that I have. I find the cost of college to be ridiculous, and I feel for folks that don’t have our income. I also find it rather unfair that I can give my kids advantages in their childhoods that allow them perhaps an advantage in admission. All is not equal.</p>
<p>Blossom, there are some other things to consider for families earning $250,000. There are many families in the $250,000+ income bracket that work near exhaustion to provide the best for their children. This level of work is unsustainable. When it comes to the practice of medicine, the opportunity to maintain income and balance the responsibilities have rapidly become dimmer. After years of this burden, these families begin to demand value for their money. If they pay more, like everything else, they should be getting more. Why should they be expected to pay $50,000+ per year for tuition when someone else pays a lot less? $50,000 is a lot of money at any income bracket.</p>
<p>Our economy runs on a system of supply and demand. We would never tolerate someone paying $10K for a car while expecting another to pay $50K for the same car strictly because of their abilities to pay.</p>
<p>Seriously, I never thought I would see the world this way when I was a college student. I thought if someone earned $100k+ they were set, they were rich, and they could easily afford necessities. It really doesn’t work that way. College tuition at the top tier schools are at the level that all but a select few will feel a financial pain! A segment of the population are too rich to get assistance but too poor to take the financial pain.</p>
<p>But college isn’t a commodity in the same way that a car is. The car salesman has no reason to lower his prices for some people as long as enough people are buying the cars at full price. A college, by contrast, has a lot of interests beyond the immediate financial one. They want students who will go on to do great things and bring credit to the institution. They want students who will get rich and donate more than the amount they were given in fin aid. They want a vibrant, diverse student body, not just for social justice reasons, but because it makes their school more attractive to a wider range of people, including some of those full pay kids. Simply put, you have a lot more students to choose from when you make the school affordable to more students. It isn’t just a matter of enticing a few top students with merit scholarships; it is about collectively raising the level of the institution. </p>
<p>I think 60K for a year of college is absurd. It would be worth having a thread on ways to control costs. But in the meantime, I think the aid structure at the top colleges is about as fair as it can be, given the alternatives. As for the others, I don’t think less well endowed private colleges actually have enough money so that even most poor kids are going without making some sacrifices. If aid were so universally awesome for the FA-eligible set, we wouldn’t hear all these stories about people going to CC first to save money. As for the wealthiest colleges, it isn’t as if people who make 149 K are getting free rides and people at 151 K are paying full price. Yes, the 151 K family might be just above the threshold for aid, but the aid the 149 K family is getting probably isn’t all that significant. People aren’t getting free rides, or close to it, until you get into incomes that are low enough that they aren’t coming out ahead by getting free college.</p>
<p>In the late 1960’s early 1970’s my sister attended Grinnell. Tuition, room and board at that time ranged from $2400-$3000 per year. Our father was a small town midwestern physician. I’m guessing he grossed around $100,000 annually at that time. Maybe a bit more. </p>
<p>Her college costs were around 3% of our father’s gross income.</p>
<p>This year, Grinnell’s tuition room and board costs are $56,000. My husband, also a physician, would have to earn $1,866,666 annually for college costs at Grinnell to have that same 3% impact. </p>
<p>Not even close.</p>
<p>So yes, we earn a healthy income, but college costs have exploded in comparison to earnings for every one of us. Grinnell would be around 20-25% of our annual gross income today.</p>
<p>I am not complaining, I am trying to show how even people who would be considered very comfortable can be shocked by the price of college.</p>
<p>(Being somewhat math challenged, it is entirely possible that my numbers are off a bit. Corrections are welcome. )</p>
<p>Frugal, thanks for the lesson. I took a three day maternity leave after the birth of one of my children, so I don’t need much convincing of how exhausting it can be to fulfill one’s professional obligations while providing for one’s kids.</p>
<p>My point is not that it’s easy. My point is that to claim that low income people have more options (because their kids would theoretically get more in aid, not loans than someone at a higher income bracket) is absurd. Even owning a home vs. living in public housing is a clear demonstration of how higher incomes provide more options and greater financial flexibility.</p>
<p>There are enough issues to trigger the class warfare arguments. Pining for a lower income to qualify for more aid doesn’t seem like a good issue.</p>
<p>eastcoastcrazy, are you sure about your dad’s income. $100,000 would put him firmly in the top one percent. Median family income in 1970 was less than $10,000. </p>
<p>I agree that college costs have risen at an alarming rate to reach dizzying heights. I don’t think someone with $160,000 net take home pay ($250,000 gross) is somehow at a bigger disadvantage than someone who earns $75,000 gross.</p>
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<p>What about all the people at lower income levels working two or three menial jobs without benefits to provide what they can for their children? I agree with blossom that it is ludicrous to suggest that, on the whole, poor people have it better than those who are well off. My guess is that a lot of posters here do not know very many truly poor people or have insight into what life is like for them from day to day. Living in leafy enclaves and sending kids to school with others just like them has a way of insulating people from the realities of others.</p>
<p>He was a physician, in the prime of his earning years. I know he grossed 100k+ in 1974 when I worked in his clinic. So maybe it was less in 1970, but Grinnell would still have been only around 5-7% of his gross income. My point was that it was easily affordable for our family, but that earnings compared to college costs have diverged quite a bit. </p>
<p>The cost of college tuition and fees has increased 1120% since 1978.</p>
<p>Eastcoastcrazy, that actually sounds bout right. I left for college in 1974 and my parents income was alittle less than that. College costs were somewhere around $3500 a year and my parents complained plenty. My last child’s tuition, room and board is closer to 25% of our gross income but we don’t earn anywhere near $100,000 gross per year in 1974 adjusted for today.</p>
<p>Of course Grinnell was easily affordable for your family in 1970. Your father far outearned most people in the US. The 1970 Census chart showing family income levels only went up to $50,000 (and over). It is exactly like saying someone who earns a million dollars today can easily afford the cost of Grinnell. </p>
<p>Yes, college costs have risen but it is still within reach of the one percenters (in 2012, $394,000).</p>
<p>Look at it a different way. </p>
<p>In 1970, $3000 TR&B at Grinnell would have been around one third of the median family income of $10,000. </p>
<p>In 2012, $56,000 TR&B at Grinnell was <em>more</em> than the median family income of $51,017.</p>
<p>Every single one of us should be shocked by that.</p>
<p>When I went to college in the 1970’s in New England, not a single dormitory for undergrads (that is, zero dormitories) had air conditioning. Every dorm had a payphone in the lobby, many dorms had a communal phone at the end of the hallway. Libraries closed at midnight except during exams. The dining hall closed at 7:30 pm. If you wanted a cup of coffee at midnight there was a diner near campus, or you heated a cup of hot water with an immersion heater in your room and had instant. The gym closed at 9 pm, and only athletes (i.e on a university team) got clean towels- everyone else brought their own. There was one university psychiatrist who made referrals to the ER in town for emergencies, or could get you an appointment with a mental health practitioner in town within a couple of weeks if it weren’t an emergency.</p>
<p>Fast forward. Is there a college kid in America who would attend a college that didn’t provide a host of dining options, that wasn’t completely wired, that didn’t have the workout rooms and luxurious athletic facilities? Parents here on CC regularly complain about a lack of support for their kids ADD or ADHD and the need for MORE individualized mental health services AND private tutoring AND one-on-one coaching for their kids Executive Functioning disorder.</p>
<p>Our society has changed. But none of us wants to admit that these changes cost money. One monkey in a psych lab dies and you’ve got PETA protesting at your gates for a month- so you need 5 employees to monitor the animal rights of your medical subjects. One kid slips on ice and sues- so you need a team of lawyers in house. A fraternity hosts a party and a drunken kid climbs up the roof and falls- and now you’re hiring an entire department of risk management experts to teach frat kids how to host a kegger while reducing liability.</p>
<p>The number of grownups my college kids interacted with during their four years was astonishing compared to my experience. I had professors, and once I spoke to a Dean to reschedule an exam. That’s it. Now- parents want counseling and coaching and people in career development to launch their kids into a career, and Deans who act as parents and guides and mentors and people at a tutoring center to intervene when their kids fall behind. And a student center that looks like the lobby of a Hyatt hotel. And a sushi bar at dinner. And salad bars all over the place, and an executive chef and team of nutritionists who work with kids on individualized eating plans (recovering anorexics, lactose intolerant, non-gluten, etc.) And parents go nuts if their phone calls to the bursar don’t get returned in an hour, and are hysterical if a question to financial aid doesn’t get an immediate response (even when the question is for a kid who hasn’t yet been admitted to that university. we expect more even of places where our kids don’t attend, imagine that.)</p>
<p>Costs money folks. This doesn’t shock me.</p>