<p>You sound like an attorney yourself. I think most people in CA making well over 55k consider themselves fully in the middle class. The average prison guard/fireman is making over 100k in the state. Are they now the rich? The reality is that discounting the cost for so many students only serves to increase the overall cost because it creates an ever greater disconnect between the cost of the good(college degree) and the value of the good(high paying job). If the degree provides real value families will find ways to pay for it. But instead now the FA is focused on lowering the cost for a few but then making the costs ever more unaffordable for the upper middle class. Today a family making 250k is expected to spend 60-75k per year on college costs according to the “formulas”. So what’s it’s going to be like in 10 more years when the private college tuition is more like 70k? As long as tuition goes up above inflation the crisis will continue to get worse.</p>
<p>Say:</p>
<p>What I can’t understand is why you continue to make up your own strawmen to make your point. Sure, someone making $250k is full pay everywhere, but the fact that their EFC is $75k today, is meaningless. And last time I checked, $250k income was the top 1-2% of income earners in the US (and the world?). So you are not talking about middle class in anyway shape or form; you are posting about the rich. And regardless of how a California “prison guard/fireman” may “feel”, the fact is that the average income in the state is about $55k similar to the national average.</p>
<p>And, since this is about economics, don’t you think that once a college starts to hit some threshold dollar cost ($75k?), that it will start students? Sure, thousands would pay $100k to attend HYP, but not the local private T3 college. </p>
<p>For the masses in California, UC is extremely affordable. The Blue & Gold Plan gives out a lot of grants to those making less than $80k, which is significantly above the state average income. Indeed, that amount is approximately the 75% income level – only 25% earn more. Since the masses can attend college cheaply, the premise of the whole article…</p>
<p>Now, if you wish to make a case as some economists do, that federal & state grants increase the overall cost of college education, great, let’s have that economic discussion (one of which I concur, btw). But off-topic items (professional school costs?) and strawmen do nothing to support your points.</p>
<p>And no lawyer here. I realized early on that I would never make a good lawyer; I prefer hard facts to speculation and innuendo. :)</p>
<p>So in your world two fireman or a city manager and a pharmacist are rich because they gross 250k. Please tell us how you define rich since I think many readers may disagree. I’m not sure where you live but in coastal CA no one remotely confuses an income of 250k with rich people. Where I live that income allows you to live in a modest house in a modest neighborhood. The point is that the upper middle class well below anything close to rich are being priced out of the selective schools. Yes UC undergrad is cheaper but it remains 30k/year and now often takes 5 years. With the massive state deficits this cost is rising very rapidly and helping people below 55K does little for most families. The crisis is very real and is forcing the upper middle class into debt themselves and to save far too little for retirement. Tell me why the 75th ranked private college costs the same as Yale? All over America successful familes are making decisions about having children or more children based on the extreme costs of which college is the main worry. The system as it stands now actually punishes responsible familes and discourages them from having more than two children. One of the great dishonest myths is that upper middle class families should save for college. This of course is not true since every dollar will be held against you in FA. What a great system that punishes the people that save and rewards the ones that are irresponsible.</p>
<p>Can I get a cite for this repeated (and annoying) claim that saving money for college is somehow “punished” by the financial aid system? Take two families – same income; one has about $80k in a 529 plan and the other has nothing. Who do you really think is going to have an easier time paying for college? Contrary to popular delusion, there is no Financial Aid Fairy who just gives you money for tuition, room, board, books, etc. If you don’t have any money, and you’re not one of the tiny percentage of the population who is lucky enough to get into a school that meets full need without loans AND has an income low enough (let’s face it, the FAFSA at least calculates need mostly on income; savings/assets are a lesser part of the calculation) to qualify for that benefit, then having less money is ALWAYS going to be worse than having more money.</p>
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<p>Not just “my” world but the real world. Whether you accept it or not, the FACT is that those that have incomes of $250k are in the top 1-2% income earners in the US, and perhaps the world. Perhaps your definition of “rich” is the top 0.00001%, but it does not matter where you draw the line once it is so high. At such a point, ~99.9% of the folks in your world would receive heavily discounted college tuition, correct? And may I ask, who in your world will pay for it? (As Maggie Thatcher once said, when spending other people’s money, eventually you out of ‘other people’).</p>
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<p>Simple, 1) Yale is underpriced. And, 2) perhaps #75 is overpriced. But, #75 offers merit money, i.e., a discount for kids that they really want. And, more importantly, there are plenty of parents willing to pay full price for #75. While I perhaps would not pay that kind of money, I sure am not in the position to tell others how to spend their own cash.</p>
<p>btw: back to UC at $25k/year instate. UCs are extremely generous with AP/IB & transfer credit, so graduating in four years is doable for most.</p>
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<p>While you are entitled to your own opinion, you are certainly not entitled to your own set of facts. The fact is that the FAFSA/Profile calculators increase your EFC by approximately 5.6% of assets held in your name, not “every dollar”. Not all colleges even use full home equity; some colleges cap home equity, for example.</p>
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<p>Again, you are making up facts. Since the median income in the US is approximately $55k, it includes “most” families, or at least half of them.</p>
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<p>Selective, private schools, sure. But so what? Again, there are plenty of publics at less than half the price, which gets back to the original post and your intent: are you concerned on college education in general, or private college education for your family?</p>
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<p>It sounds to me that you are living beyond your means. Houses on the coast in CA are not for everyone (especially those who can’t afford a UC education). If you can’t afford a modest home and pay for college you need to move somewhere a little more affordable. There are many of us that would like to live on the coast but know that it is a luxury we can’t afford when we have kids to send to college.</p>
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<p>Doesn’t this show that California might have bigger problems than addressing its education woes?</p>
<p>^^touche, my cyber-friend.</p>
<p>I’m not sure where you live but as I said most families making 250k will be quite surprised to be called rich. In most locations on both coasts such people are well within the upper middle class and usually include two working couples with standard jobs requiring education. As for saving not being held against you are quite wrong. If a family making 125-200k with three children saved 200-400k for college and another identical family saved nothing it’s quite possible over those twelve college years that the FA awards for family #2 would equal the amounts saved by family #1. Anotherwords family #1 would have been far better off buying a more expensive house, travelling, buying collectible assets like Tiffany Lamps, oil paintings, or rare coins rather than saving cash for college. It is also quite true that in many cases it makes sense for one spouse to stop working to lower their income and receive better FA awards. The FA may not exactly equal the lost income after taxes but at the top schools it would be very close. If you doubt this do the math at various incomes at Harvard and you will see it makes perfect sense for couples to have one spouse stop working if they both earn say 125k and especially if they have two children in college. I didn’t make this up but rather saw it first hand in our neighborhood. The wife decided to stop working when the children started college. They then told me it made little sense since they would in essence get most of the money back in FA. What a great system that rewards people for not saving and pays them to retire early. This is what happens when the colleges decided to use FA as a form of social justice to redistribute wealth. This system punishes the most educated and productive segment of society and ultimately leads these couples to have fewer children and this will weaken our society and decrease it’s prosperity over time. This effect can already be seen in Europe where their cultures will be almost gone in 30 years though there college tuition is not the cause. If you doubt the cost of college tuition is not effecting the behavior of young educated couples just go ask them. They are quite aware they will get no aid and will have to pay for this as yet another form of taxation from which most Americans are exempt. It is certainly a crisis when the best educated couples are actively discouraged from having more children and the least educated are rewarded for the same. </p>
<p>[Harvard</a> to replace all loans with grants - Business - Personal finance - School Inc. - msnbc.com](<a href=“http://www.msnbc.msn.com/id/22186316/ns/business-personal_finance]Harvard”>http://www.msnbc.msn.com/id/22186316/ns/business-personal_finance)</p>
<p>So here is the math for two children at Harvard or other similar school if one spouse simply stops working. If you make 250k you get zero aid and if you make 150k you pay 15k for each child or 30k total versus 100k. So the result is a FA award of 70k which when you include taxes and all the hassles of work is a pretty nice return. Notice they don’t look at your home equity at Harvard so as I said you would also have better off buying a better house and saving absolutely no money. Please use the published Harvard FA guidelines and explain to me why any sane person would bother to save a single penny?</p>
<p>Because the odds of your kid getting into Harvard are very low.</p>
<p>So your kid doesn’t get into Harvard and your savings are negligible. </p>
<p>I think looking at the debt students are accumulating while going to college shows there is a college cost crisis.</p>
<p>Or students buy too much stuff. Or some combination of the latter two points.</p>
<p>That is true but I’m talking only about the educated upper middle class that produce the majority of children at very selective schools(this is true at all top schools more or less). I have two children as such schools and most of thier classmates disproportionally from this group. By the time your child is in grade school most parents know very well how bright they are and whether selective schools are realistic. This is such common knowlegde that there was a TV commercial about the Dad who groaned when his child got into a top school because he knew the “cost” of his child’s success.</p>
<p>I saw the ad and I like it very much.</p>
<p>Despite your kids’ success, the odds are still low.</p>
<p>There is no doubt that for those that make around 250,000 a year, private college costs are a strain to a family’s finances.</p>
<p>Do you think a majority of people who send their kids to Harvard are feeling stressed financially? And I am not talking about families with net worths over 7 million or so…that stress is psychogical. It isn’t financial stress. Unless you have to live a certain lifestyle to feel good. Or you have some serious financial obligations.</p>
<p>"Yes, answer Archibald and Feldman, if the industry in question produces durable goods on an assembly-line model or offers services that can be delivered by relatively unskilled labor aided by new devices. But in industries like education, medicine and the law, where advances in technology lead to a demand for ever-more-highly-educated personnel and mechanization is frowned upon because of a concern with quality, technological advances will raise costs rather than reduce them. If you understand the “increase in the intensity of equipment use and in the skill requirements for those who work” in the academy, you will also understand why “these changes have increased higher education costs more than the cost of most [but not all] goods and services.”</p>
<p>I don’t know about this. Which technologies have raised the price of education dramatically, and what about savings in administration costs? And why do text books cost so much?</p>
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<p>One more time: it’s not the savings that eats away EFC, but primarily income. Again, using your example, Say:</p>
<p>At $250k income AND zero assets, i.e., zero savings, that high income earner will be full pay at practically all colleges. So, is that person better off with $250k and for example, $500k in assets in the bank (i.e., net wealth), or $250k and zero assets in the bank? What is the “sane” answer? </p>
<p>Now, if you are asking whether a person in the “low” six figures should save, IFF they know with absolute certainty that their kid will be accepted to a well-endowed school with great financial aid AND want to attend (as opposed to Art school), that is another question. But if the parent is that prescient, they should be playing the stock market and not ‘working’ for a living. :)</p>
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<p>Perhaps many do, but anyone who thinks a ten-year-old is bound for Harvard is foolhardy unless their name is Kennedy or Gates. 
However, such smart kid might be Harvard-stat-competitive at age 18, but end up at Penn or Northwestern, which aren’t so well endowed that they can afford heavy tuition discounts to those in the top 5% of income earners in the US. Since the odds are better for Penn or NU – altho still long, should a “sane” person save?</p>
<p>Personally, I’d like to see a study to see what being socially conscious adds to the costs of running a college. For example, the construction of ‘green’ buildings, paying full medical benefits to everyone, paying a “living wage” even if it is above market wage, buying local, organic food (vs. the mystery “meat” back in the dark ages), etc.</p>
<p>bluebayou I’m not trying to argue but the FA facts from Harvard and the other top schools definitively proved my point for the upper middle class. Saving money for college is really counter productive. For this group say incomes 200-400k(educated couples like doctors, attorney’s, MBA’s, dentists, etc) the cost of college tuition is nothing but another massive income tax. These folks are well off but not rich by any rational standard and must plan on educational expenses of nearly 500k per child since many will go on past college. Now someone on CC is bound to make some kind of fairness argument but my point is that this “tax” is bad for American Society and is indeed a crisis. I work in a business where over the years I have supervised hundreds of such people. They are well educated and make good livings and a high percentage of their children are competitive at very selective schools. These people are the core of the productive segment of our society and how does it make sense to have a system that purposely punishes them with a 500k tax per child and then give the same education to illegal aliens for free. I am not against poor people but it just doesn’t make sense to reward the least educated segment of society for having many children and then punish the most productive segment and effectively limit them to two children. This is a very big crisis and over the next 30 years it will make the country much less prosperous. The results are already quite visible in California and is one of the reason’s the state is bankrupt. Now you could argue correctly that the upper middle class should just forget the top 20 schools and just send their children to state schools. But these are the exact people who went to selective schools themselves and instead they just limit themselves to fewer children.</p>
<p>This discussion is really rich people complaining about how much good help costs these days. Rich people, of course, all think that they are “upper middle class,” no matter how much money they have. Also:
Well, that’s really the first point the authors make–you can’t compare a college education to the cost of making widgets, because you can’t really provide a college education much more efficiently–especially the kind of top-notch education provided by the selective schools. That’s because it has to be provided by highly trained people in fairly small settings–which is why it makes sense to compare it to dentists, lawyers, etc. Of course, you could switch to distance learning with profs based in India, but before doing that, why not just attend the state flagship?</p>
<p>bluebayou. At top high schools many children do go to the top schools. Of my son’s closest long time friends two are at Harvard(sports), another at Princeton, one at Middlebury, and the other at CMC.(my son is at a similar school). None of the parents are rich but are all highly educated professionals and they are all paying full tuition.</p>
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What percentile of US income do they fall in? If it’s the top 5%, they are rich, no matter how they think of themselves.</p>
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<p>Although this is not the most salient element of this discussion, the statistics related to the participation of low-income students (I supposed this comprises illegal aliens) in higher education is hardly as large as one might think. Take a look at this article:</p>
<p>[News:</a> Striving for Educational Equity - Inside Higher Ed](<a href=“http://www.insidehighered.com/news/2010/06/18/strivers]News:”>http://www.insidehighered.com/news/2010/06/18/strivers)</p>
<p>Following the links, you might be interested in reading some of the findings of Carnevale and Rose. </p>
<p><a href=“http://tcf.org/publications/pdfs/pb428/carnrose.pdf[/url]”>http://tcf.org/publications/pdfs/pb428/carnrose.pdf</a></p>
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<p>You might also be interested in similar research at [Economic</a> Diversity in Higher Education — The Century Foundation](<a href=“http://tcf.org/education/diversity]Economic”>http://tcf.org/education/diversity)</p>