US intergenerational economic mobility is not that much different from that of the UK in recent times: http://www.epi.org/publication/usa-lags-peer-countries-mobility/
Where the heck is this thread going?
Of course, ambition, hard work and savvy are a good bet. And resilience.
And some kids do quite well, post-grad, whatever college they went to.
But I think OP’s point was to focus on the donut hole. That simple.
@lookingforward The donut hole is not going away. The future will likely be worse for the UMC as a global pool of truly wealthy people who are willing to pay even more to attend elite schools push them out.
So there needs to be an adaptation. Let the kids know how long it takes to save a quarter of a million dollars for the schools. Assuming you are UMC perhaps discuss the idea of opportunity cost. You’re going to give them a quarter of a million dollars. Do you want to spend all of it at college X or do you want to spend part of it at college Y and…
A. Put a sizeable down payment ( this is what that means for your future lifestyle/mortgage)
B. Start your financial portfolio (and explain what that means for your student’s future)
C. Spend a year traveling the world
D. Etc., etc.
The idea is that things will likely not get better for the UMC and you go into your choices eyes wide open
I agree with everything you just wrote and, yet, kids in this boat commonly have tutoring that drives them even more deviations to the right. In this case, tutoring provides enrichment not remediation and ensures that young Jeff stays on top as their parents are competitive from the start (think 2nd grade gifted identification). Others who figure the competitiveness can wait until high school? They better have the proverbial Michael Strahan* on their hands as their kids are already lapped.
*was athletically gifted but didn’t play high school football until he was a senior.
When I was growing up, the highly advanced in math student was more likely to be asked to help (perhaps informally) tutor some other kid than be tutored.
I had dinner the other night with a college friend (we went to the state college, so what do we know?). When her daughter was applying to colleges, they lived in a very upper class town in Mass, and while others had the pick of college without concern about money, this family had to watch the bottom line. I think they were probably full pay, but didn’t have enough to pay $60k per year. Daughter was at the top of the class in academics, but had to ‘settle’ for UMass. She later told her mother that she was so happy she did, as she had so many options for STEM courses, internships, and research. She graduated last year with a PhD in bio medical something and now has a job in international pharm.
Be happy with the many choices you do have and don’t worry about those schools you can’t have.
Can we retire the “doughnut hole” meme? Doughnut holes imply that there’s some kind of low point, and those at either side are better off. That’s patently false. The folks on the lower side of income aren’t enjoying some sort of boon that all of a sudden, those at a certain income get denied. The gradually greater (sometimes), increasing FA mirrors decreasing family income, and increasing income tracks with decreasing aid. So there’s no sudden deprivation at a greater income level.
“Doughnut hole” just feeds into the aggrievement story. It’s just not supported by the actual way aid works.It’s not like those at a lower income aren’t also “feeling the pinch”.
At the generous need-based aid only colleges the doughnut hole is real. It is exactly how their aid works. The center coincides with the maximum ratio of out-of-pocket cost/income. This hole is located at different places on the income scale. It moves towards higher income at the more generous colleges. At the same college every year it moves towards the higher income after the price increase and more affluent families slide into the hole.
Using Harvard as an example for a family of 3, US citizens living in Massachusetts, 1 in college, $0 assets, all income from wages/salary:
https://college.harvard.edu/financial-aid/net-price-calculator
Income ($) Net Price ($) Net price / Income (%)
0 4600 infinity
10000 4600 46.0
15000 4600 30.1
20000 4600 23.0
25000 4600 18.4
50000 4600 9.2
65000 4600 7.1 (highest maximum aid income)
100000 9600 9.6
150000 19600 13.1
200000 45000 22.5
250000 66350 26.6
255000 69600 27.3 (lowest no aid income)
300000 69600 23.2
350000 69600 19.9
400000 69600 17.4
The maximum ratio of net price / income is found at income = $0. The minimum ratio is found around the middle income level when below to super-high income level (the ratio gets down to 7.1% at a local minimum at $65,000; it eventually falls to that level at $983,481).
Given the gifted/highly capable cohorts that are put together in larger school systems, following second grade, this kid may be part of a swim lane with others just like him and may barely interact with kids who need remedial tutoring. Furthermore, I’d bet my own money that he’s more likely to take advantage of any available extra instruction which further compounds the gap.
@gearmom: I believe intergenerational economic mobility in the US is worse than most countries in Europe now as the gap between rich and poor has grown.
50000 4600 9.2
65000 4600 7.1 (highest maximum aid income)
100000 9600 9.6
those #'s sure looks like what some would call a donut hole, or what I would call a “sweet spot”.
of course, thats just what one college offers these days…
@PurpleTitan I think you may be right but I can’t find anything not behind a pay wall.
Either way, it has became far more grim in the US over the last generation: https://www.theatlantic.com/business/archive/2016/07/social-mobility-america/491240/
Purely anecdotally, I am the only person that I grew up with in a post-industrial neighborhood who is earning more than my parents and has attained the supposed holy grail of middle class life: home ownership. Literally, the only one (that is not a brag, it is a lament). I was also one of the very few who has completed their college education, though several are still taking a class here and there into their mid 20s, trying to cobble together a degree while working full time and barely keeping afloat (and in many cases, not staying afloat at all).
I was lucky to move into a school district just before high school that was in a significantly more well-off area and the difference was night and day. College was expected, not a pipe dream. There was some help with how to navigate the college process rather than counselors spending all day working with so-called “problem” students.
The benefits that upper middle class students get are incredible compared to most lower income students. That’s another reason why when I hear about frustrations, it is really hard for me to have sympathy. The child is almost certainly going to do as well as their parents based on the solid foundation they have had since infancy. Even if these students, gasp, end up at the same public directional as the low income kids, odds are that they will still excel exponentially over the lower income students.
I’m rambling now. My apologies.
@fragbot the point you are missing is that the advanced math student is not in a “larger school system” and therefore may only have 1-2 peers. There is no additional instruction available to that student and they are the additional instruction for the students just behind them in ability.
This happened to my DD20 in reading and math until 3rd grade when there was finally 1 hour of higher level math offered 1 day per week. True higher level math was not her daily math class until 4th grade.
@ucbalumnus --that’s not my quote.
And I still say that’s not a donut hole–the fact that good aid extends farther up the income level at these schools does not put those at even a higher income level in some kind of unfair stratification.
@PurpleTitan No I agree. There was a sweet spot in the 70s and 80s during which you could really gain some ground. College was more affordable. When I started at my state university, the cost for everything (room, board, tuition etc.) was $6000 a year. By the time my sister went to the same school, six or seven years later, the cost had doubled. For me,paying back loans was easy. I think my first job’s salary was 42-45 k a year. Opportunity was slipping away in by the early 90s.
I think things will get worse. As you said the divide will be greater. I’m just concerned that education has become this sacred cow. An arms race that starts at preschool where parents feel pressured to send their kids to the best private options to learn their numbers and letters or else they get left behind.
For kids launching right now, if we spend twice or four times the amount for a college education without any significant ROI, how does that impact the future? The half a million you keep in investments to be later inherited, think what that means for a family’s prosperity. It kind of seems like we’re being scammed sometimes. To be happy now or happy later???
With regard to class and income, the essay by this young woman heading to Columbia does a good job of crystallizing some of the discussion in this thread with regard to those topics
https://www.nytimes.com/2017/05/12/your-money/standout-college-application-essays.html?_r=0
Something like this?
http://www.epi.org/publication/usa-lags-peer-countries-mobility/
@ucbalumnus thanks for posting the article but it focuses only on father son wages so it does not consider that there are more women than men in college today. I am curious how looking at all wage earners would change the view of mobility in the US.
@katliamom - We heavily subsidize the ability of European countries to spend on social programs through both defense spending and the “tax” we pay in our U.S. health care system (we bear the cost of innovation through higher drug and procedure prices). If someone wants to send their child to college there, I don’t think that is hypocritical.