<p>Only 15 percent of American households have a six-figure income. So yes, it definitely IS “that much.”</p>
<p>The average person in the top 1% of the world makes $47,500*, just to put things in perspective. So even $100,000 on a world scale is… ridiculous.</p>
<p>*As of like a decade ago, actually.</p>
<p>The fact of the matter is that as you make more money, most people want the amenities that one can buy with it. If you have children, the immediate concern is safety, school district, quality of home. If education of your children is an important priority, the expense starts way before college. Most of us want the best schools we can afford for our kids from the onset, which means good school district, best we can afford school district. In some areas that is very expensive. And yet, I cannot see someone making 6 figures choosing to live in an area where these issues are not of prime concern. In fact, that is prime factor in making the location, location, location so important. </p>
<p>My brother has two young children and live in a very small ranch in the San Francisco area. $1 million won’t even buy that house they are renting. They make over $180K and can’t buy their very tiny house on a quarter acre. The area is convenient to my SIL’s work and cuts down on her commute and allows her more time with the kids. The school district is about as good as it gets. All of these are important quality of life things that affect them 24 hours a day for many years before their oldest goes to college. Right now, college is a vague thought beyond a given that it will happen. More important to them is whether their daughter gets a spot in the charter school lottery. They can live like SIL’s secretary who lives in a duplex in an area that is clearly a bit sketchy and the schools are not considered very good. She also commutes for a longer distance and drives an unreliable car. The people in that neighborhood are not of the educational level or have similar goals as my brother and SIL. But living there, they can save enough money to send both kids to the most expensive colleges even 11 years in the future with 6% annual increases. But they don’t want to live like that for the next 11 years. There are many months, days,minutes, seconds that they enjoy these advantages and many of them will have some impact on whether those kids will even want to go to college. The numbers are pretty clear on that. </p>
<p>I’m kind of in the same situation with some disasters thrown into the mix a few years ago that really messed up our plans. I don’t look for any sympathy or feel entitled to financial aid. But even now, I am glad we made certain high cost decisions that have put us where we are financially where it isn’t prudent to pay $55K a year for our kids’ colleges. That we have this big house in a safe neigborhood has allowed a lot of our loved ones, including both elderly mothers, mine and DH’s sanctuary. They each have their own room and feel safe and welcome here. Our daily lives are pretty danged good. That is what we have bought with our money. Is the top cost college more important? We have a nice safe haven that many members of our family have used and appreciated in great times of need. We are prepared for our retirement, though not as well as we should and would like to be. We can handle as we have handled some urgent situations. Those are some of the trade offs.</p>
<p>Yes, clearly >100,000 is A LOT when compared to the national average and especially the rest of the world, but to say that families with a six-figure income shouldn’t expect need-based aid is ridiculous. My family just barely has a six-figure income, but we have no new cars, no new house (and not a big house either), no additional property, etc., because we can’t afford those things. We don’t live lavishly by any means, and it would still be impossible for us to afford 50,000 a year unless we sold our house and cars and drastically downgraded. And my parents have worked very hard to get where they are (they both came from very low-income families in rural areas), and there’s no way they would sacrifice everything they’ve worked for to pay 50,000 for college, nor would I expect them to!</p>
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If we’re still talking about schools in the Harvard-range of financial aid, families with a sub-200k income regularly do get some aid.</p>
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<p>Uhh, what? You do realize that the family budgets on $180,000 - to throw a $50,000 expense on the books for four years is a LOT. </p>
<p>Income is relative. If my family moved anywhere else in the country, we’d be living like kings. But the fact that we live in the suburbs of New York, six figures is just average. We make above average, but it isn’t to the point of my parents being able to throw $50,000 at an education. We have a balanced budget, but our EFC is still astronomical. </p>
<p>Without a trust fund or planning, I would say that a family needs to make over $300,000 to effectively pay full sticker. At least.</p>
<p>Someone with only $100k income would receive lotsa need-based aid, even from schools not known to be generous. Of course, at that income level, the Ivies would be cheaper net than many instate publics.</p>
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<p>Fair enough. But colleges know, with absolute certainty, that there are plenty of parents who will pony up that kinda money to fill the seats. NYU is a perfect example, and has been for years.</p>
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Wait, so “planning” is on the same level as “trust fund”? Plenty of people lead a wealthy lifestyle on $130,000/year. If someone is making $180,000/year, “planning” to “only” live on $130,000 is not exceedingly difficult. Making X amount doesn’t mean you have to spend X amount (or X+debt).</p>
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<p>I actually applied to NYU and refused financial aid. I know that I wasn’t going to get anything substantial (my sister was outright rejected, I was given very little money, and they flat out told me ‘no’ on an appeal), so I figured why would I risk NYU for money that I won’t get? Hell, I raised my chances for hitting non-need. FAFSA will surely say that my parents can pay the full tuition and then some, but our pocketbook says differently.</p>
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<p>Trust fund is a trust fund. Planning is being able to predict how much your child’s education will cost and saving for it. How much do you think you will need for your child? And do you think it sounds practical to save $200,000+ for something that isn’t definite - especially over 18 years? </p>
<p>Yes, it is exceedingly difficult to go from balancing $180,000 a year to $130,000. That’s $4,000 a month. Is your mortgage going to magically disappear? Your car payments? Car insurance? Property tax?</p>
<p>Cut 25% of your family’s budget and see what you have. Surely, people making $180,000 can live in a shack in the bad part of town and pay full tuition - but they should be punished for wanting a standard a living relative to their income?</p>
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One might think that’s among the most important things to save for. And okay, I thought most wealthy people thought college was “definite” for their kids.</p>
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Spending up to full income when you make that kind of money is irresponsible.</p>
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The difference is that one involves still being wealthy and one involves a poverty line. It’s not just “25%” regardless of amount. Surely, Bill Gates couldn’t live on 75% of his income, right?</p>
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You have a really bad concept of what kind of home the average person with $130k/year income has. “A shack in the bad part of town”? Not sure whether to laugh or cry. Some people are way too sheltered.</p>
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If they want it, they should realize they’re sacrificing paying for their children’s education.</p>
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<p>It depends how you define wealthy. But I agree, in most areas of the country, this is doable for most people. But remember, you’re talking about pre-tax dollars. You need to give colleges after-tax dollars. So you’re really asking that family to live on about 110K. I can’t see doing this without loans for most.</p>
<p>More than 85 percent of American families live on less than $110,000 - most of them, MUCH less. Once again, the world’s smallest violin is playing.</p>
<p>You’d think those of us with family incomes in the mid-60K range are living in the slums with unsafe schools and riff-raff on every corner. :p</p>
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<p>Agreed. I’m trying to be sympathetic to the high income earner who needs to live on an income reduced by 70K. But, what that high income earner often doesn’t realize is that he/she has choices that others don’t have. For example, the poster who was able to pay off his 300K mortgage in 10 years thinking it’s unreasonable to make a 200K investment in his daughter’s education. We are way too hung up on things and property.</p>
<p>You do realize that the family budgets on $180,000</p>
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<p>And this is the bottom line. The family NEEDS TO BUDGET for future college costs. Failure to do so is a big mistake, as a family does have income to work with above and beyond basic survival at this level. My biggest beef is the folks in this income range who expect that their failure to plan should be the school’s problem.</p>
<p>There are many on CC in this income range who find workable options for school that do not include paying more than they can comfortably afford/borrow. I do want to point that out.</p>
<p>So you’re really asking that family to live on about 110K. I can’t see doing this without loans for most. </p>
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<p>My after-tax income is quite a bit lower. I can and do live on less than $110k while paying for two kids in school with no loans. You will find plenty of stories on CC like mine. It is about planning, priorities, and no “bad stuff” getting thrown into the mix (like loss of a job, medical costs, parent-care costs, business losses, etc). It can be done … but it must be made a priority right from the start.</p>
<p>When I speak to parents, I ask them how much the state U costs. I ask them if they had to pay for that in a couple months, could they? I then tell them that it WILL be “in a couple months” before they know it … this is true for parents of kindergartners to parents of high school students … it is how people seem to operate. My goal is to get folks to think about this in advance so they can plan, plan, plan.</p>
<p>There is no money tree in the backyard. It will not rain money. Few families are going to be given money (or at least, not enough …). PLAN, people. If you can’t plan financially for whatever reason, then plan in terms of schools that will work for your situation.</p>
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<p>You forgot to include the part “with typical assets”. No one here really knows what that means but since these schools use the Profile or a school form, they look at ALL of your assets. If you have $1,000,000 in home equity (think someone who bought a house in CA in the 70’s and lives in that same house now), or own your own business, or have other real estate holdings, all bets are off on that 10% of your earnings.</p>
<p>I agree with others about folks with 6 figure incomes. There IS a college out there they can afford to pay for out of current earnings. It might not be their college of choice (e.g. I would say MOST six figure income earners could pay for a community college with little difficulty…but they might not WANT their child to go to a community college). </p>
<p>And some of us have six figure incomes because we CHOSE to have both parents work so we COULD pay for our kids to go to college.</p>
<p>'rentof2 - didn’t you hear you’re one of the “lucky ones” who gets a full ride to whatever college you choose?</p>
<p>I agree fully that there are many families living on incomes of “name a figure” and doing well. My close friend from college lives on very little, less than $30K a year, and has sent her many kids (steps as well as her own) to private colleges. She never chose to pursue making a lot of money and never moved out of the student “ghetto” from college years. </p>
<p>But many more in lower incomes have problems directly attributable to not having enough money to meet crises that may occur. Not being able to pay for college is the least of ones problems when you don’t make a lot of money. The reality of such cases was quite evident in the years I spent with my cancer kid and seeing the old fundraising kit parents get if your insurance doesn’t cover bone marrow transplants. It really has frigging tin cans and appeals for help that you can distribute to stores to collect the spare change, or did some years ago. Memorial Sloan Kettering wants to see the money before you can get your foot in the door these days. Talk about acceptance anxiety and not having enough money. Also, the one constant in any educational studies about achievement is socio economics. These are the realities. </p>
<p>Most families will look for the best school district they can afford for their kids when kindergarten becomes reality. They will also look for the nicest house they can afford. You think they stretch just for college? Uh uhn. That happens waaay before college is in the picture. Most of us are immediate creatures. And really you live a lot of time in your house and get alot of benefits per minute in living in such a house, so it isn’t such a bad choice.</p>
<p>What happens here on CC is that when parents finally focus on college since it is now around the corner, the realities of a quarter million dollars after tax cannot be avoided. The problem is that for years, many families and kids have been hearing the great myths perpetuated by the colleges themselves of how no one is turned away due to need, that there is financial aid out there for everyone, how to go to college for free, etc, etc. If the kid is pretty danged smart and high achieving, many such families think that s/he is going to be accepted everywhere with a full ride. You can see these threads where the parents and kids are shocked that none of their top choice school wanted them and some colleges just thrown in the mix to meet the counselor’s “reach, match, safety” quotas are asking for the same quarter million that these families would gladly pay HPY. </p>
<p>Many families and students have no idea how difficult it is to get into the most selective colleges and in getting a full ride to most schools. </p>
<p>I’m not crying any tears for any parent making 6 figures who has just made these discoveries, but, yes I am sympathetic. No, I don’t feel that going a way to a private college is anyone’s right. I think the current system should be shored up at the bottom in terms of those with such need and the schools that can best serve them. I wouldn’t vote for a dime for federal/state programs to send my own kid to sleep away school. That’s up to me. But, can I complain about it? Yes, of course. I can complain that the food at a restaurant is too expensive even as I go there. That’s our right. That is , in part, why this board exists.</p>
<p>Many kids and famlies from low incomes that are scraping to pay incidental costs of college are truly blown away how anyone making 6 figures can be complaining about cost, and rightfully so. Many of these kids when they finish college will join the ranks of those making that kind of money and putting together an optimal home life. That’s when they understand how one ends up building some of the foundations that take money at the time of building and keep needing more money, so that it’s difficult balancing current and future needs. </p>
<p>My oldest son and his friends are going through this now as they are hitting their late 20’s . Many of them, even graduating from top schools have not been able to make a living wage yet. As they marry, and build a family, they are feeling these pressures. My son gets less than 50 cents on the dollar of what he makes after paying health insurance, dental insurance, social security, taxes, 401-K for which he would be nuts not to contribute with the employer match. He has to pay to commute to work, not a cheap thing, He needs to dress in coat and tie which means dry cleaning. He has a car–used and paid for but upkeep and use is not cheap around here. He just moved out and though he shares an apartment in a not great neighborhood, the cost is half is take home, pay maybe even more. He doesn’t have a lot left. Now much of the above stuff are still choices. He can choose the cheapest HMO for insurance, forget the dental, say he can’t afford the 401-K, get rid of the car and find a cheaper living arrangement (but even in downright dangerous neighborhoods with people he doesn’t know the rents are higher than his, from what I have seen). He find it useful to hang with business partners after work and get the word on the street about things, and that was how he found the living arrangement and job opportunity, so the value is real, but, yes it costs. And he makes more than a lot of families who are facing sending a kid to college, where he is having trouble seeing how he can move upwards a bit in his own world, never mind wife and kids at this point.</p>
<p>I can go on and on about my friends who have just started families and how they are learning where the money goes. Some of them are also learning how that school loan is truly toxic when one is trying to get settled on one’s own too. Yes, my friend’s D is making 6 figures at a top law firm right out of law school. She also has to repay law school loans as well as ug loans and her husband has loans too. And the company where he worked just went under so he’s collecting unemployment. She’s pregnant and is finding her HMO is not the best healthcare optiion for her and her future child–just the cheapest. And she’s finding that they’ll want a second car when the baby comes in the next couple of weeks–not need, but one tends to want to have the best environment for one’s baby and that doesn’t mean carrying newborns on subways. That’s how you end up spending a 6 income salary very quickly–addressing immediate amenities that become priorities when you can afford them. Oh, and yes, that 5 story walk up became a problem when she hit her 3rd trimester and those pains alarmed them enough that they broke their lease (cost money) and found a more expensive upscale place with families with children, a park and an extra bedroom. A year ago, they were boasting how the place was just fine. If they could not afford the move, they would have stayed there, I guarantee you, because they would have had no choice. But with the income they had, not to put health, pain, children as a priority is not what most people would do. </p>
<p>Hopefully, you are getting my drift.</p>
<p>'rentof2, I absolutely do not. But I believe some are. I also believe that some are putting up with conditions and situations that they would not, if they had the money to address them. I’m getting my 85 year old mother’s teeth redone this year. They are a mess and it’s going to cost a small fortune. She weighs 70 lbs and has trouble eating as it is. I can get her $3K dentures, or go with the $30k plan with some mini implants and bridges. If we didn’t have the money, the old lady would get the cheap dentures and I have no doubt they will sit in the jar as most such things do. With the other option, which only people with money have, she just might get a working mouth. Hardly a glamorous way to spend money. I’m not going on vacation this year, but my mother will get state of the art teeth . My MIL weighs 200 lbs and, yes, I pay an aid to come give her a bath and scrubdown once a week which is a luxury. But I weigh about 110lbs and she doesn’t want her son and grandsons scrubbing her. The aid is a solution that makes all of us happy and yes it is a rich person’s solution. We also have a handicapped shower for her as she has two replaced knees and a replaced hip. Cost us $10K, and again a luxury. I’m getting a rail and ramp installed on the front of the house for about that amount so that she can go out on her own on a nice day. All luxuries, all for very privileged old women. And families making $60 can’t do that for their mothers. My neighbor down the street just bought a van that accomm odates a wheelchair for her son with cerebral palsey. It’a luxury, and no, insurance doesn’t cover the cost. It costs more than a year at a private college. And that they make six figures makes that possible, and no they do not expect Colgate to give them aid because of that and other such purchase they make for their adult disabled kid who does hold a job that doesn’t pay enough to buy himself such amenities. When you make the money, you do want to spend it on things that make every day life nicer and easier for your family in ways that lower income people cannot consider. Not to do so, in some cases, is really not enjoying the income you make. </p>
<p>Your kid having trouble at public school? He’s a perfect fit for the little private school, and yes you can afford it, but it means the college fund is going to get dealyed… But education and school choices do not start at college, you know. Yes, private school is a choice and if you ain’t got the money, you may not have that choice but to send your kid anywhere but where your taxes dictate, but if you have the money, and you see a much more suitable, better venue, most parents will take it. At $60K you don’t have the choice.
I pay through the nose for my son to go to Memorial Sloan Kettering which is out of network with my health care insurance. The doctor who treated him for high risk lymphoma/leukemia is there. The guy knows every drug, every little nuance of is treatment and it is documented there, not to mention the protocol, NY2, as it is called is one of MSK’s own. I think that at our income level, it would be stupid for me to save money on this issue, though I could. And yes, when he got a mysterious lump on his neck last year, I paid for the next day airplane ticket for him to come straight home and I took him to MSK and to his oncologist immediately. Cost me several grand. If we made $60K a year, I would not have been able to do that. But I don’t think my priorities are misplaced.</p>
<p>Not to say we, and any families who make the money haven’t made some stupid mistakes with it. Having something often means you screw it up too. You can’t waste money you don’t have or make mistake with it cuz you don’t have it. </p>
<p>Again, I am NOT,NOT, NOT, nor have I ever–and you can check my many prior posts, advocated more money for those deemed able to pay. If anything, I have been consistent in advocating the funds to the bottom. But, I do understand, how people with 6 figure incomes cannot afford 6 figure college costs. Oh, I understand ever so well. And many of you kids who may enter this world, if your student loans don’t consume your income for years to come, will understand too. Few people who make $180K are going to choose to live like the average person making $60k and for good reason.</p>