A family making $150k/year who already has $500k in savings didn’t just start earning that income a year or two ago. Having a yearly income that’s 3x the US median doesn’t make you middle income, it puts you in the [top 5%](The Demographic Statistical Atlas of the United States - Statistical Atlas) of wage earners. The reason colleges don’t give you need based aid is because you don’t need it.
A lot of kids have the stats to get accepted to the $60k schools, but all those kids who are being awarded the $30k need based grants that you complain about can only attend if their parents can dredge up another $30k/year for 4 years x however many kids they have. Most families can’t do that.
Most families pay for their kids to commute to college. The fortunate ones get to commute to their local state school for all 4 years, but many can’t even do that. Those students start at their local community college then commute to the state school for the last 2 years. These kids have to work summers for tuition money instead of taking advantage of internships to advance their careers. Many work during the school year as well, which not only interferes with studying but limits their campus activities, making it tougher to get top grades and develop the connections with classmates that may prove helpful later on in their careers. And they leave college with thousands of dollars in student debt.
Most high stats/low income kids don’t get into the schools that will give them full- or nearly full-rides. Too many people are competing for those spots. Their financial aid sources ($5500 loan and $5k Pell) doesn’t go far when the net cost is upwards of $20k.
College educations are a luxury. You don’t have to pay $60k/year for your child to go to college, but you can apparently afford to, which makes your children pretty fortunate. If you’d like them to attend those expensive schools at the same discounted price that middle income families are getting, reduce your income to ~$60k/year and dump your assets. The schools will be happy to give you the same aid as everybody else getting those $30k/year need based grants; the catch is that you have to be willing to live on the income that goes with it.
If OP did not have savings but instead chose to go on those luxury vacations every year, buy expensive cars and you name the other ways to spend money he will not need to worry now about paying full price. Yes the system is unfair and nobody can argue with this. Yes you get punished for getting education, making good career choices and saving for a rainy day.
Maybe the real issue is that the best deals typically go to the wealthy…"
How do you figure that? My H and I worked for every penny that went towards our kids’ college educations, so I’m confused as to how that was a deal. Not complaining, mind you.
If owning a Mercedes instead of owning a Toyota had societal value, the comparison to higher education might be apt, but there is no added value to having low income families (or families that can’t afford it) driving a Mercedes instead of a Toyota. For those students that want a higher education, I hope you can agree that we as a society want them to be able to go to college regardless of their financial situation, for a whole variety of reasons, many of which will benefit us all collectively.
If you don’t want every student to have a chance to develop his or her full potential, regardless of financial resources, and you don’t care if American society becomes more stratified between the haves and have-nots, then you should continue to believe that higher education (and the best higher education), should only be for those that can afford it out of their own pockets.
Given your line of thought that you don’t think you should be subsidizing the college educations of those students that don’t have the same resources that you do, I’m assuming that you disapprove of the federal government’s Pell grant program. With your income and assets your child won’t come close to qualifying for a Pell grant, but your federal tax dollars help to fund Pell grants for thousands of low income students every year, up to a maximum of nearly $6k each. Do you begrudge those students their Pell grants, given that, all other things being equal, your child’s net cost will be higher than that of a Pell grant recipient?
@austinmshauri You are correct. ironically, the only reason we have $$$ is bcause we live like we had that kind of income (60k). I’ve done the math on some college calculators, and in many cases the net difference after taxes and college costs(@60k), between having both spouses work, or 1 of us not working is about 15k. in a sense, the college financing system disincentivizes (is that a word?) working. But working hard has its own benefits. and there are plenty
of lower cost options for getting a good education. just stepping back and looking at the math ticked me off.
No one is stopping family from taking vacations, buying luxury cars or doing anything else they want to do with their money.
Financial aid is mostly income driven; even if OP did not save $500k and still made the same 150k in income the family would be full pay or close to it at many schools (one kid in college, with just primary home, $EFC is still going to be ~45k before we even address the savings). Spending all of their savings would mean that they would just have no way of paying their EFC.
Ok, they would pay 10% at Harvard and Yale if they had typical assets. The rub would be getting around that pesky 5% admit rate.
Family is fortunate because $500k in the bank means that they have the means to pay vs. having $150k income and having no money to pay your EFC (which is the case when many kids talk about their parents can’t afford to pay).
We are fortunate that we live in a country that has over 4,000 colleges at all sorts of price points. Op can probably find 100s of colleges where he can pay what he wants to pay.
@BelknapPoint I can see how, taken to the extreme, my line of thinking could lead to what you’re saying. the stronger
people in a society always help the weaker which has both good and bad consequences.
How do the breaks usually go to the wealthy? Easy. Better interest rates on loans, higher taxes rates are accompanied by far more tax deductions, employer provided insurance (often better for higher wage earners), professional courtesies of all sorts. . .
Just the way the world runs, except for paying for college.
All of us could just look for those colleges at the price we are willing to pay. Many CC families set $ limits, when guiding their kids. They walk the walk.
The colleges use aid to help kids they feel deserve their school and need that help. Some families simply don’t have the discretionary income.
Most of us, even the obviously wealthier, can talk about ways we manage what we have, control some choices (cars, vacations, purchases,) to have access to other priorities or meet a goal. If you do amass enough to, per the college formulas, pay full, how much of that is the colleges’ fault, for helping those who can’t?
Let’s not assume FA families are blowing it on luxuries. Most aren’t smirking. Most often, the issue is low income, in the first place. Those folks are tightening their belts, too, you know.
Having just gone through this, I agree with the original post.
I think the FA system is fairly screwed up. I kind of (but not fully) get the “need” thing, but the fact that it completely fails to take into account WHY need exists makes it unfair.
Most “need” is based on personal choices. If someone chooses to have 4 kids, for example, that’s their right and their choice.
But they shouldn’t expect that other are going to subsidize their kids’ expensive college educations. They should either have plans to do it, or send the kids to colleges they can afford. Which isn’t exactly sending kids to a Siberian gulag. Pretty much all states have fine state schools and community colleges. In no way shape or form is a $65,000/year private school a “right” or even a “necessity” for anyone.
I’m not eligible for financial aid so I’ll be footing $65k/yr starting next year, but I’m not “rich” and don’t have top 5% income. The reason I’m not eligible for financial aid is I’ve spent the last 20 years planning for college (rather than relying on needing a handout), living below my means, making sacrifices and being responsible.
And I’m only paying the $65K because (1) we only have one child, and (2) there were only 10-15 top schools in the world that I felt provided enough value to justify the cost (although even for this very select group of schools, it’s still a very close call to me re: value).
He earned his way into one of these few schools, so I’ll pay.
But if he didn’t, or if I didn’t have the money, I’d be happy with him going to one of our state schools (which are also very highly rated).
This welfare system for $65,000 colleges is screwed up.
And you know what? You don’t get much aid just for having a larger family. And the VAST VAST majority of colleges don’t meet full need for all anyway. This is a strawman argument.
Also, the personal choices you are talking about are parent personal choices…not kid ones.
And the very vast majority of need based aid is institutional need based aid, which is awarded by the colleges…their money…their choice how to award it.
No one…no one…has to go to college.No one has to go to a $60,000 a year college. Choices to be made there too.
The money for aid does not come out of your pocket. It comes from the endowment and investments. It comes from huge donations to the school, many earmarked for scholarships. Students in need of financial aid are not usually in need because their family went out to eat more or took vacations but because they struggled to pay the rent or live in a place with terrible schools and had to spend for relocation or because they make crappy money so the CEOs can take home hefty profits.
On the other hand, some people think the increase in tuition is driven, at least in part, by the need for schools to offer posh dorms and gourmet food and amusement park accouterments to attract 18 year olds used to luxury. That doesn’t describe most of the students on financial aid.
There are two fallacies here, one in either side of the argument:
1). College is not a commodity and every kid should have the same shot at a “good” college education. This presumes that “good” equals expensive. A good education can be had with little more than the pell grant with commuting. So why subsidize $65k? And in between are thousands of schools that bc they don’t meet need are unaffordable!!
2). All kids who are poor can go to $65k schools for free. This is a myth that even I bought into until someone pointed out to me how FEW schools meet full need truely. So many kids get gapped, and not by a little!
On the surface, it can be frustrating to subsidize others, but it is just one of many areas where the higher $ earners pay more for less or the same. I max out on Social Security every year. Even if I get the max, I’m not going to see much of a return. It is not really a retirement payment, it is a social welfare program. If you have, you pay. It just is.
All I can say is, when you feel frustrated, think of the alternative: not having the $ or income and anxiously waiting to see if you’ll have an EFC you can afford! I worked hard to get to the top so my kids would NOT have to go to a directional U just bc of a lack of $. Be proud, not frustrated!
Because it’s not the parents going to college, it’s the kid. It’s not the just the parents that have need, it’s also the kid. The kid should be punished for the choices of the parents? To an extent the kid will be if the parents made some bad choices, but do you want to saddle the kid with every bad decision made by the parents?
@stMachine, Our family income is ~$60k. I gave up working when my 2 children were little to homeschool our dyslexic, dyscalculic, and dysgraphic daughter because public school just wasn’t going to work out, so until she graduates and I return to work our income will limit their college choices to commuting to our local state school. Even at that income, we’re nearly full pay.
It wasn’t always this way. When I stopped working our combined income was over $60k. Had I stayed with my company (union), I’d likely be making $80k (the rate my previous coworkers are currently making) for a combined ~$140k. But life is about choices. I can’t pay $60k/year for school because I chose to to give my daughter the best shot at life that I could. You could have chosen to blow all your money or refused to pay for your kids to attend great schools even though you can afford them, but you didn’t. Would you be happier if you had blown all your money? I think that need based aid is primarily income based, so unless you quit your job I don’t think you’d get it anyway, but blowing $500k+ so you could have the privilege of paying $120k for college instead of $240k is a risk I wouldn’t bother to take.
If that’s the philosophy, then we’re starting way too late, and ending way too early, in college.
Most kids in inferior elementary schools are there because of choices of their parents. Why are we saddling kids with that? We should subsidize them into a better environment.
Same for kids in subpar high schools.
And kids living in bad areas.
So, in a nutshell, yes. Kids are burdened by their parents’ bad decisions. It’s been that way for thousands of years.
But life will go on, without a subsidy into a $65,000/yr private school.
While I understand your frustration, would you really want to live in a world where everyone pays the real cost of college and FA did exist (no scholarships, no grants, no student loans, no loan programs promoting public service, no ROTC, etc)? I know this not what you are saying but it is one of the ways to have everyone pay the same amount.
First understand that even full pay students are not covering the full cost. So your tuition would be higher.
Who would be able to go to college except the wealthy? In that world, state schools would cost the just about the same as private schools. Community colleges might be a little cheaper but still would be out of reach for many. Maybe online courses could be develop more to provide cheap education for some majors. But probably not all.
How many students could afford a medical school education as full pay cash students (remember no loans unless the parents can qualify for six figure loans)? My guess there would be a shortage of doctors and care would be rationed to those who pay for it.
How many students would become teachers? Who would teach your children?
But here is the biggest kicker. Most wealthy people get rich by owning or being part of a successful business. To run most successful businesses you need skilled workers. What happens when the vast majority of the workers only have a high school education? I am guessing that the 1% will have a long term problem staying that way.
Bottom line, the current system as flawed as it is does benefit society in the long run. FA, state schools, tax deductions, … exist to help make sure we have enough skilled workers for jobs that need to be done. Could it be better, yes. But until something better comes along, it is what we have.
All of us subsidize others daily. My dollars support projects in other parts of the country that have only local impact. Someone mentioned we all pay for local k-12, even after our kids are out. The list is long.
The issue isn’t just choices, it’s also what results from those. Always is. So not just that those folks have 4 kids and fewer resources per, but that across the street, that guy had only one and can spend more on him. And down the road, they guy who now has a hefty bank account and wants to keep it that way. So you make a choice of a less expensive college, just as you made the choice not to buy a Mercedes. Lot of colleges are the reliable Toyotas.
This is somewhat a case of no, you can’t have your cake and eat it, too. (Not unless you learn how to shelter it.)
No, most kids in inferior schools are there because the government imposes unfunded mandates on public schools and communities don’t earn enough to make up the difference. So wealthy districts in NJ get so many AP courses parents have to plead for a semblence of reason while in poorer NYS districts families have to battle to prevent basic programs from being cut.