@OHMomof2 Many schools count home equity and if you purchased your house in expensive area 20+ years ago, chances are you have at least 500K in home equity. Also most donut families have two college educated parents working and making 150K + in combine family income. Still not easy to give away more than half of the family income after taxes to pay for college.
@kepakemapa Having $500K in equity to borrow against or sell and $150K+ a year income is now considered to be some kind of terrible outcome on par with, or rather, worse than, being poor? Really?
Harvard gives EVERYONE 20k off bat even multi millionaires. Harvard talked about making tuition free bc their endowment is so big. I am not talking about Harvard. We would have gotten 20k /year at Harvard too
Your 529 is not exempt from financial aid formulas FYI… son has 260K in 529 and guess what … that means he (we) get nothing in finical aid…
now I could have spent that 529 account value on a new house, new kitchen, new bathrooms, hell hardwood floors (which i don’t have) new cars, vacations …all things of which my neighbor DID spend (their son got into Williams where he is going for 15k/year)… they live in a mc mansion w cleaning, yard service and drive latest BMWs etc yet they only have to pay 15k and We pay 65k…
What sense does that make? They could have saved like we did but they chose not to. No other industry in USA operates like this…
Also agree w other poster we bought our house for 180K it is valued at over 580k according to financial aid office and bc we paid it off they said that is 400K in assets … but if I wanted to sell my house I couldn’t find another house in my location for 180K Id be stuck paying over $500k …so selling iisnt really an option…
I don’t mind paying for truly poor people but I do mind paying for people like my next door neighbor who could have very easily saved like we did.
From my perspective as a saver, you are “penalized” only if you want to send your kid to an expensive, competitive school.
I think I’d rather be there, than be poor and trying to scrape together enough money to send my kid to ANY college that might be somewhat do-able and scared to death that you’re one busted a/c or flat tire away from the check to the college bouncing.
I’m not going to wish that I’d lived off the largess of others, because I know what that looks like and it’s not pretty-everyone saying I wish I hadn’t saved doesn’t know how bad living on the precipice of financial doom feels every day-college with a lot of need based aid does not feel any better than college with only merit aid-it feels just as unaffordable. It feels much worse than staring down the barrel of $64k a year and saying “nope” and knowing you have options, which is what we’re looking at now.
Been there, lived the poverty paycheck to paycheck as a teenager. No thanks. I’ll send my kids to a good+affordable school and not go broke doing it.
But you really have no way of knowing your neighbor’s financial business, or that your savings is what hurt you.
Congratulations on the college savings, that’s a great achievement and I’m sure it was not painless.
Harvard (which is an Ivy - you said Ivy earlier which is why I looked at it) does get to zero aid - not $20K - at 100K income, one kid in college and $1.4 million in non-retirement assets. Or probably via several other variations of income and assets and family size.
Yes indeed, me too.
But truly, what sense does it make that someone living in a rebuilt Mc mansion, w cleaning service/ yard service new cars every year/ vacations should be able to qualify for financial aid… oh and one parent doesn’t work and they bought their son a new bmw when he turned 17… they make 100k year and “owe” money… so they are golden w regards to not having to pay sticker for college…
I know the details bc neighbor and I talk about it often… we decided that If you have a smart child that can get in to a 100%need school then there is no incentive to save… you are penalized for saving. I know bc It happened to us -we went in and talked at length to FA office … and no, I don’t have 1.4million in savings. I have 260k in 529. and a house I bought 25 years ago that has appreciated in value, but I can’t afford to sell bc I can’t buy anywhere near it for less than $500K
and yes I agree this is a nice problem to have -I truly do feel bad for others in dire situations
But you cannot say you are not penalized for saving…
What good can come of looking at what other people are doing? You really have no idea what their financial picture really is or if they’re telling you the truth. Stop making yourself miserable and focus on what you can do and what you do have. I feel like this is bleeding into the jealousy thread…
Yes. Absolutely. I just couldn’t give in. So we are sacrificing and sacrificing.
@garland It is not true that doughnut hole families do not experience requests to change a lifestyle that matters to them. No one wants to sell or hock their home. Home is home, regardless of whether it is a $50k home or a million dollar one. Wealthier people’s feelings should not be dismissed. Also, doughnut hole kids will have debt when poorer kids do not. Why is that fair? Much is said about poorer kids needing FA so they can take a risk on lower paying internships and jobs. Well guess what, the doughnut kid who has debt can’t take a risk in a real life job because of debt and the poor kid can. I am a doughnut hole family. The sacrifices are real…And don’t forget that we have the money we have because we earned it.It was not given to us and should not be seen as a reason to make it harder in us. We paid as much tuition as my child’s Billionaire roommate. Economists have written about this situation; we aren’t making it up. The sacrifices are real.
My dad still says he wishes they could have done more. And that was 30 years ago. So I help assuage his guilt by paying for my kids.
And I agree that people of means also make meaningful sacrifices. Full pay does not start at a million dollar income. Perhaps some people never had what we are sacrificing, so it is of no consequence to them. I’m not going to be eating mac n cheese for 4 years, so I’m not going to complain.
How do you figure that @myyalieboy ? Based on the infinitesimally tiny number of colleges that do not package loans in financial aid?
"What good can come of looking at what other people are doing? You really have no idea what their financial picture really is or if they’re telling you the truth. Stop making yourself miserable and focus on what you can do and what you do have. "
Amen. Don’t even remotely kid yourself you really know someone else’s finance unless you are their accountant or financial planner. You have no idea what assets someone really has, what “silent” health issues they have that are none of your business, if they are supporting grandma, etc. None.
The OP’s question was
Now, if you cannot pay, then I can see that there is no reason to feel guilty. Sad, but not guilty. I turned it around a bit to say (#50), we can pay, but it seems like the saved money would better used otherwise, e.g. save it for grad/professional degree. I feel guilty even thinking about that potential conversation with S two years from now (‘Son, go to our fine state flagship and save that money for the future.’). ‘Have all those years of ‘saving’ have made me unwilling to spend?’, I ask myself.
However, like @runswimyoga I’m sure if S19 wants to apply ED to an elite school (which I’m going to define as Ivy+M+S for now), we’ll say ok. Getting in, however, is exceedingly difficult so the expected price (price x prob of paying) is small. But how far down that USNEWS ranking do we draw line? At some point, prudence must take precedence (and thus guilt is unavoidable).
Here’s a article posted elsewhere about full-pay families subsidizing the tuition of those that pay less. I don’t have a problem with that if I’m subsidizing those with lower income. But I am not thrilled about the affluent savers subsidizing the affluent non-savers. I can play with the NPC at Harvard and Stanford (say) and see that’s happening.
https://research.stlouisfed.org/publications/page1-econ/2014/01/01/the-rising-cost-of-college-tuition-financial-aid-and-price-discrimination/
This isn’t something I get in a knot about–it’s a ‘good’ problem, I get that. But it does make one balk even more. You feel like you might as well have ‘sucker’ tattooed on your forehead.
@OHMomof2 Fair point. But what I said is still true for some.
"However, like @runswimyoga I’m sure if S19 wants to apply ED to an elite school (which I’m going to define as Ivy+M+S for now), we’ll say ok. Getting in, however, is exceedingly difficult so the expected price (price x prob of paying) is small. But how far down that USNEWS ranking do we draw line? "
Well, certainly farther down that “Ivy+M+S.” (Parenthetically, isn’t it kind of, I don’t know, weird that you arbitrarily picked a certain athletic league’s members as being “higher” than other comparable colleges and universities? Why on earth do you think Brown, Cornell, Dartmouth have magic dust that, say, Duke, U of Chicago or Caltech don’t?)
And the top LACs are entirely missing from your list of elite schools.
“Son: “Mom, stop you’re sounding like dad.” Oh, sounding like the Stanford PhD, with 20+ tech patents, who who helped start 5 tech start-ups. Goodness, wouldn’t want to sound like that guy!”
I think this is what the young’uns call a humblebrag! Well done!
“Why on earth do you think Brown, Cornell, Dartmouth have magic dust that, say, Duke, U of Chicago or Caltech don’t?)”- “magic dust” is up to a student to obtain. So, I would add ANY college to this list. I have seen “magic dust” on graduates from very low ranked, in-state little known colleges. Yes, this “magic dust” was very evident, could not deny seeing it on the shoulders of hard working achieving beyond expectations students at absolutely any college.
You want to attend at Harvard, go ahead, but do not be so blind as to say that others are beneath you because they happen to rely on themselves in everything that they do, they will have the same 'magic dust" at the end of the process, if THEY WANT IT!
I don’t think that. I’m not so sure about ‘magic dust’ at all. I’m thus struggling to see the value of paying more than what our instate flagship would cost. That makes me feel guilty.
I ‘picked’ Ivy+S+M not because those are the ones I would pick as ‘worth it’ but because it is stereotypical to pick those. This is a ways off, so it’s all hypothetical.