The greater a country’s income inequality, the likelier parents are to push their kids to work hard

[Creekland]

Suppose a husband and wife in California both work, and they both make median income, which we will round to $35K per year. They have two children, and the oldest is now ready for college. She is very bright, near the top of her class, and gets admitted to UC-Berkeley.

Running the Net Price Calculator for UC-Berkeley, the in-state list price is about $39.2K. But with their $70K income and $100K in assets, they get a $24.3K grant, reducing their total contribution to $14.8K per year, or roughly $60K for 4 years in constant dollars. Of that $60K, they expect the student to cover about $36K through work study and loans. A student can earn about $5K during the summer at the California minimum wage, plus some more during school-year work study, so the loan component should end up being small.

The other $24K is from parental contributions which hopefully the parents were able to save up. If not, they can take that out as a parental loan.

And let’s not forget that there are cheaper options as well. UC-Berkeley’s transfer program gives first priority to students from California community colleges. California’s community colleges charge $46 per credit hour. The student can stay at home, earn 60 credit hours over two years at a total cost of $2760, and then transfer to Berkeley, and graduate two years later. Same quality degree, but about half the cost.

All possible on middle-class incomes, which as I said, are considerably higher in the USA. No plutocrat wealth required.

I’m not familiar with CA (other than various vacation travel throughout the state), but it seems to me to be a HCOL state, so you really would expect a family of four earning 70K when their oldest goes to college (meaning probably not likely earlier in their lives) to have 100K in assets and have saved up 24K for college? Or would counsel them to take out that much in loans for college for just one of their offspring?

CC would be an option, but other than that, our advice to the parents and expectations from them would differ.

Then too, 50% of the folks there earn less than the median. How do they afford it? CA might be good with college tuition as are some other states. Other states are not. We have kids working in our high school to put food on the table for their families. Some also pay the rent (no asset building up there). They tend not to be our stellar students able to get into tippy top schools, but they can be “good enough” to get state school acceptances. If what they are earning is helping to pay for basics, how can that same money be applied to college expenses? Loans you say?

Most move on to the work force - no shame in that - but when one would prefer a college education and fits the profile of being able to do it, it would be nice if there were decent access across the economic classes. The tippy top academically can often find something affordable, but the “masses” have far more difficulty IRL.