The CC phenomenon: "middle class" with no FA eligibility?

Paying for College
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<p>Can someone explain this to me? I see lots of families on CC that consider themselves middle class but don't qualify for need-based FA. I have always considered the actual "middle class" to be between, say, $40,000 and up to $100,000 income. Those families will absolutely qualify for SOME need-based FA based on their FAFSA EFC – whether or not they actually receive FA depends on the school, right?</p>

<p>Aren't families that get NO financial aid generally "upper middle" and above? At a family income of about $118,000/yr, one is in the top 10% of earners and still qualifies for financial aid via the FAFSA. I just don't understand this.</p>

<p>My current idea is that perhaps if you're going to a non-full-need school (ie most schools), you don't get FA unless your EFC is REALLY low, like $40,000 lower than the COA…and that's why so many CC folks consider themselves ineligible for aid.</p>

<p>Or CC is just full of top-5%ers who are making $200,000+ a year. That is also very probable.</p>

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<p>Here is the reality of the situation, as I see it Those families who are making $200K or so, are all almost certainly going to have kids going to college right out of highschool. Just the way it is. Such families tend to live in certain neigborhoods. enjoy certain amenities and have certain expectations. SInce most people around them, earn about what they do, or more, maybe a bit less, they get the idea that they are “middle class”. Their idea of who has a lot of money and who does not puts them right square in the middle fo things.</p>

<p>The fact is, that as you make more money, you do tend to spend, it and the things that are important in raising a family, mean spending it on things like neighborhood, schools, home, amenities. ECs for the kids, cultural things, good quality things. The problem is that you get used to those things and it hurts to cut back. Also, it’s not that easy to divest oneself from some of these trappings. You bought a house 15 years ago, now may not be the time to sell it. Getting a mortgage for another house may not be so easy to do. Things like homes are not easy to get rid of. You’re better of just blowing the money on junk and sprees, because you can stop that cold turkey. Lots of work and uprfront money to get yourself out of a house and downscale to a less expensive one, and if there are other kids involved and schools, it’s even more complicated.</p>

<p>So in all of this, a lot of folks kind of stuck college in the back of their minds, saying there is not way they could save for it anyways, and their kids were just going to have to pay for it themselves or get scholarships. When the time comes, when you are in the crowd with kids who are applying to sleepaway colleges and the expectation is that they are going to be able to go away to school, go to a private school, when the money is not there to do so, it’s an issue.</p>

<p>To rub salt into the wounds, when you live in these circles, there are certain to be some kids whose parents are not doing so well financially, but the kids are in the same schools, and some of these kids might just be material to get accepted to schools that meet most need. So the kids of those who did not do as well as you did financially are getting the money to go to the colleges you can’t afford to send your own kid. Hurts.</p>

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<p>Have you priced a pair of Louboutins lately? Or a *latt</p>

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<p>Middle class is a phrase that includes a broad range of folks. In the last presidential election the income ranged upwards of 250k per household when it came to who would not see their taxes raised and obviously it includes upper middle and lower middle. The lower middle is eligible for decent financial aid while the upper middle is not eligible for much aid at all.</p>

<p>I view it this way as it relates to sending your kids to college. The rich can afford to pay sticker price. Everyone else is needy. For instance, lets say you have 4 kids to put through college. The going rate for top notch schools these days is 60k/yr or 240k for 4 years. Do that 4 times and you’re talking almost a million $ by today’s prices. Anyone that can afford that is rich by my standards. Everyone else needs aid in some form or just has to send their kids to the local commuter school.</p>

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<p>“Those families will absolutely qualify for SOME need-based FA based on their FAFSA EFC – whether or not they actually receive FA depends on the school, right?”</p>

<p>There is no such thing as “absolutely qualify” for need-based FA other than a Pell Grant. Everything else depends on the Cost of Attendance as defined by the institution that the student attends. If the kid goes to a community college, or commutes to a local 4-year institution, it is indeed entirely possible for a commuter COA to be low enough that the only people who qualify for need-based aid are those who are eligible for Pell.</p>

<p>“Middle class” as a cultural self-identification is not the same as “middle class” as defined by an economist. Most people in the US (some of whom are frighteningly poor and some of whom are amazingly wealthy) identify themselves as “middle class”.</p>

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<p>The answer is “no”. Getting some financial aid is not a given.</p>

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<p>The biggest single problem, I believe, is that so few families save for college expenses. It is a daunting proposition to think about how much college will cost when a child reaches age 18. For a school that costs $250k ($60k+ for four years), a family would need to put aside roughly $1,200 every month for 18 years PER CHILD from the day each child is born. This would also assume that the investment return of the savings would match the 5% or more tuition increases. That 5% return is awfully high when a definite withdrawal point is defined.</p>

<p>When the college years arrive, a family whose annual income is in the $100k-300k range will simply have a difficult time finding $60k for full pay at high end private colleges, yet their current income will be too high for FA.</p>

<p>An obvious response is that saving some amount, any amount, is better than nothing and will soften the blow when tuition bills arrive. However, it is discouraging to know that you are sacrificing for an abstract goal that might still be unattainable. It is far easier to ignore the problem and hope for generous scholarships or free money from Congress.</p>

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I understand what you are saying here, but isn’t it possible that some of these families that you define as not doing as well financially are making conservative financial choices (for example, we said “no” when our mortgage lender suggested we buy a house costing twice as much because she could qualify us for twice the payment), living conservatively and stretching their dollars very well?</p>

<p>I remember well a discussion several parents of college-bound seniors and I were having about a state grant - one of the parents said somewhat dismissively*, “Well, none of OUR kids will qualify…” and it was a grant for which my child qualified. We were the family that, while living in the same neighborhood and attending the same schools, bought used cars and drove 'em for 200,000 miles, didn’t have cell phones for the kids or cable TV, and ignored the designer shoe/clothing trends - not because we couldn’t afford all of that, because we chose not to spend our dollars on those items. We also contributed modest amounts steadily to their 529 accounts from the time they were tiny, so we were able to meet our EFC - the effect of the smaller mortgage we chose+no car payments+no cable bills+no kid cell phones+healthy 529 accounts meant the EFC that made others gasp was something we could manage. I just thought we were being very careful with our money rather than “not doing well financially.”</p>

<p>*This was a wonderful person who would have been appalled at the thought that she said that to me while my child qualified for the grant.</p>

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<p>To clarify, I didn’t mean that $100k income folks will RECEIVE financial aid. I meant that their EFC would likely be lower than the COA at private/high-tier public institutions. My fault for misspeaking there.</p>

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<p>OP - you might well be surprised at how many “high-tier public institutions” make very little non-merit-based money available for OOS students. In fact, no school - public or private - will guarantee to meet full need as defined by FAFSA.</p>

<p>The list of schools that will meet full need is pretty small. Even these are careful to define need on their own terms and might well exclude someone whose income is $75k but has other unique circumstances (owns a business with huge deductions, owns a $5M house without a mortgage, etc.).</p>

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<p>@luisarose </p>

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<p>Most of these discussions regarding “the middle class” and FA center around values computed from statistical data collected nationally. Your value above of $118,000/yr, indicating one is in the top 10% of earners, puts you solidly in the middle class on Long Island. Why wouldn’t that LI family expect financial assistance? Is there “need” any less than a $40k family from upstate NY where the COL is dramatically lower?</p>

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<p>Yes, their “need” is less because they are living in LI as a choice, and they could choose to live in a lower-cost area. With a similar income, their COL might be so low while living in the lower-cost area that meeting their EFC becomes manageable, or if their income is significantly lower as a result of living in the lower-cost area they may qualify for more financial aid.</p>

<p>Of course, the answer they would give is that they prefer to live in LI. And the sense that they are “middle class” as a result of where they live is well-explained in cptofthehouse’s post #2.</p>

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<p>In addition, many schools may meet a middle-class family’s EFC with loans.</p>

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<p>The other issue with saying, “Oh, you’re so wealthy, you can afford to pay full freight for college” is that it assumes that the family’s income has been CONSTANT at a particular level throughout the children’s growing up years. I was an adjunct for several years (and we all know how well THAT pays) before finally getting a tenure track job three years ago. At that time, my kids were 13, 14 and 15. Living in an expensive area on one income, we didn’t have a lot of money to put away for college prior to my getting this job three years ago. </p>

<p>I often think that I would have been better off turning down the tenure track job so that my kids could apply for financial aid as a one income family rather than a two income family which relatively recently experienced a hike in living standards. It makes me angry since in appears that colleges are rewarding women (and men) who for any number of reasons don’t work full time – In some cases someone might have been laid off, become disabled, etc. but again I am sure that there are people who game the system. My latte-drinking, tennis-playing neighbor woman will get financial aid for her kids and I will not. Hardly seems fair.</p>

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Gee, are there no options in between?</p>

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<p>Looks like this is it, given that that is the income level to not receive financial aid at any college.</p>

<p>Median household income in the US is about $50,000 per year; for those headed by someone age 45-54 (the highest income age and the one most likely to have high school and/or college age children), it is about $64,000 per year.</p>

<p>Note, however, that the 45-54 age group now is significantly less wealthy than it was in 1999 or so, when its median income (inflation adjusted) was more like $77,000 per year. Of course, college is now more expensive (inflation adjusted) than it was then.</p>

<p>[U.S&lt;/a&gt;. Household Incomes By Age Brackets](<a href=“http://www.advisorperspectives.com/dshort/updates/Household-Incomes-by-Age-Brackets.php]U.S”>http://www.advisorperspectives.com/dshort/updates/Household-Incomes-by-Age-Brackets.php)</p>

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<p>“Gee, are there no options in between?”</p>

<p>There are options in between. However, at those in-between institutions who gets how much aid is much less predictable than at the very top end and the very bottom end which means that the final price is all all over the map. In my state, in-state too-far-to-commute publics are in the range of $24,000/year. A fair number of families can scrape that together, but as we witness here on a daily basis, many cannot.</p>

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<p>I think it is mostly kids who think they are middle class when they clearly are not.</p>

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<p>Our EFC is supposed to be $7k/year…my moms income is ~35k/year…didn’t even get a pell grant. “100k/year” is not middle class, sorry.</p>

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<p>Actually it’s possible to receive financial aid even above $200K income - it depends on many factors.</p>