I agree that college is expensive - it is especially unaffordable for poor families with no extra $$ in their budget. Yes, a poor family could qualify for generous financial aid at the handful of “meets full need” schools, but those schools are incredibly tough to get into. The situation described here is not that - in this case you have a donut hole family that can’t afford the full freight (or whatever their EFC was) at an expensive private school - but with a student that could get into an Ivy League school they would have had many, many other cost effective options. This was a choice. An elite college education is a luxury good and not everyone can afford it (or has a parent willing to pay the sticker price). Fortunately, there are lots of other great schools that an outstanding student can access for a lot less.
How does one pay 40K for tuition + expenses if pre-tax earnings in high cost areas are less than 100K?
It seems @60% of the US high school graduates go to college directly out of their high school. I assume this includes community colleges as well as for profit institutions.
http://www.higheredinfo.org/dbrowser/?year=2018&level=nation&mode=data&state=&submeasure=63
As noted above by MANY. There are more affordable options for a lot of these students, and many states are making college more accessible for lower income students.
In your example of the family with 3-4 people living in CA on an income of $115,000 a year…this family would be eligible for the Calgrant. CA really has done a good job with the Calgrant program, as well as their community college to four year university options. Neither costs $40,000 a year.
Same with NY. The TAP program and Excelsior specifically provide funds toward tuition. This makes their instate publics affordable for many many students.
CT is now providing community college at no cost for lower income students. The CCs here have articulation agreements with the four year publics. Our directional universities do not cost $40,000 a year and finishing a bachelors at one of those is very attainable.
These are three examples of high cost of living places where students can get affordable college educations.
There are more.
And as noted…some people make the (poor in my opinion) choice to go into debt for big name schools. It’s a choice…not a mandate.
Most students in the US attend community college (2 year colleges) and/or live at home to commute to a CC or a 4 year college. It is true that a 4 year residential college experience isn’t possible for some students.
Shouldn’t the bio parent have the basic responsibility for education cost??
My spouse getting re-marrried doesn’t remove my responsibility as a parent (nor would I want it to).
This is true - but this is where there are community colleges or colleges near home and live home…
It’s like a restaurant - not everyone gets to eat out.
It stinks - but it’s how it is.
Some states are coming up with income driven programs - my state now has one. Earn less than x $, you pay no tuition - but you still need to the living costs (less than 20K).
I will tell you how we did it (but it was what 2 kids cost us/yr, not 1) and saved well for retirement.
-
Started 529s when kids were very young
-
Drove used cars (and not expensive used cars; but also not beaters)
-
Stayed in our original house (did not buy bigger one or in a “better” neighborhood)
-
Refinanced house when financially beneficial (and paid it off early)
-
Did not take expensive vacations (not all, but most vacations were at friends’ or families’ 2nd homes which were free to stay at)
-
Didn’t re-decorate frequently or because we were tired of the look (ok, not really at all; we still have 21 year old living room furniture that is in good shape, but did totally re-do the kitchen ourselves)
-
Had budget of in-state cost for the kids and they knew the budget (we weren’t taking loans and we were not letting them take loans); $40K a year for 1 kid for college just wasn’t an option in our house
-
Our kids work and pay their own gas and “fun” money…most of which they save
-
We were lucky that we had no major disasters in our life (but also planned for, and maintained things like our cars and house to minimize the chance of expensive repairs, etc.)
-
We didn’t give a crap what the “Joneses” were up to (and felt no need to keep up with them or anyone else)
-
We will not (even if we could afford it) be financially supporting or subsidizing our adult children; we will help launch them - they can live at home rent-free, they can stay on our health insurance, etc. But we are not paying their rent somewhere while they waitress or work part time while they look for a job.
And we didn’t sit around in the dark doing nothing - we still did stuff, ate out, had fun, did fun things. I do wish we traveled more/could have traveled more. That is one thing I do hope we can do - take our kids on some trips after they are out of school.
Lol we did all of this (except we drove beaters, every single one was towed away at the end, AAA was utilized a lot), I think we just had too many kids! Vacation every 3 years or so, been in our 1500 squfoot house for 25 years, takeout maybe twice a month, eat out a few times a year. Kids activities did get spendy, but they were long term, and an important part of their lives, even now. A family of 7 can live with just one shower!
Yes. I meant 40k for two kids and kudos to you and your family. To live a well controlled life in a country where it is a norm to have fun by taking loans shows amazing self discipline.
I have to show these to my kid who is US bound this fall. It is going to be an interesting experience for him to come and live in a relatively constrained financial status in a college!
And if he’s going to a ‘rich’ kid school (in your case high priced LAC) it will be more pronounced. Others will be taking trips, eating out and if he’s not able to join, it could impact his confidence.
It is NOT the norm to have fun by taking loans.
Sure, Disney wants you to believe that if you don’t take your kids to have breakfast with Cinderella, you have failed as a parent. Nintendo wants you to believe that if you haven’t bought the latest gaming system you are a loser. And Pizza Hut wants you to believe that it is really, really hard to take a ball of dough, spread it on a cookie sheet and throw cheese and tomato sauce on top so instead of making your own, you need to spend $35 every week eating THEIR lousy pizza.
But this is NOT the norm for most people in America, even those who can afford it. The most affluent people I know take vacations in national (or state parks) to show their kids how gorgeous the natural world is, visit museums (on free days!) for entertainment, and take great pleasure in making their own meals.
That is interesting. Majority of the families I know do have debts, reverse mortgages etc. Taking vacations on credit cards. Changing cards by doing balance transfers etc. is not unheard of. Of course I don’t know too many families and my view of USA is 20 years old and primarily from University life.
The new life hack.
In a 2019 survey, 56% of Americans dine out or get take out 2-3 times per week. It actually is what most people do.
I’d love to see the breakdown by income of the 56%-- which might be a bare majority (over 50%) but hardly “most people”.
And is this 2019 before covid, during covid, and how have the numbers changed since then?
Reverse mortgages are a phenomenon of the elderly, not people with kids in college or HS.
And if you are basing your understanding of finances on 20 year old recollections of your college friends… you might want to get actual information.
Honestly, I’m surprised it’s that low if you count lunches. Almost all my coworkers who make <$50K per year (in their 30s-40s) get fast food every day for lunch alone. And I know they eat out for plenty of dinners too.
Most of their kids won’t go to college however
nvm
You said it wasn’t the norm - it definitely is the norm. I’d also argue that more Americans go to Disney than not.
I recently saw on CNN that in 2022, 58%of consumers are dining out more. 30% of consumers spend $180 per week at dine in restaurants.
My S22 and his friends eat out several times a week. They work and they save, but they definitely spend on food.