Fifteen years ago our savings were going great, no projected problem paying for colleges for our three kids. A poorly timed layoff and cancer diagnosis took care of that for us. These discussions always turn into a dig at those with no savings for whatever reason.
We have another issue with our income; while W pays off her business loans, that gets reported as income without resulting in any cash available to us. Those payments add to our AGI (and our FAFSA) without doing anything for our disposable income. We can’t get home equity loans because the bank has a lien against the house.
This year, we have to pay 55% of our disposable income for college expenses, 75% after our mortgage gets taken out, about 85% if you account for our out-of-pocket due to the lousy health insurance policy that helped create our current financial situation. Yogurt and an apple for lunch today.
Oh-I was going by pre-tax income. I guess it’s 15% or so post tax.
I encourage anyone to file appeals if you have extenuating circumstances like the previous two posts. I’ve filed a number of appeals for various reasons (medical bills, disability, drop in income) and schools are responsive.
I think no matter where you are on the scale, it does seem like the system makes going to college financially painful. That or colleges are just charging as much as they can possibly get away with. We will be paying just under 20% of our net income (gross - taxes). We are getting a “good deal” from a private school that provided my S. a fair amount of merit aid. The cost is comparable to what we would have paid at a better in state public university (Had S been able to get in-ha!). Frankly, it will be a challenge to come up with the fees out of our current income. For comparison one school that provides need based aid only would have cost us 35% of our net income…and would have resulted in us taking $80-100K in loans to make those payments.
We have a little savings for college (and those 529s lost us money anyway) but are in good shape for retirement and (finally) have that emergency fund you’re supposed to have and no other debt except a mortgage and an equity line (from a remodel and some debt restructuring after a job loss). We live in a high cost area and H wasn’t making much for 5-6 years when we might have been saving for college and/or fixing our old house. We put our D. through a private U where she got 1/2 tuition scholarship but still wound up taking loans. H now has a very good salary so we were able to pay off our loans for child 1, pay off a used car loan and a furnace loan and build that emergency fund but no time to save much for child 2. Child 1 moved home and took nearly 2 years to land a career job, so added to our expenses over this whole time when we might have been saving a bit more. We live as frugally as a 2 working parent household can where everything costs so bloody much and we are sometimes too exhausted to cook (take out once a week or so). We spend a lot on health care for various chronic conditions. Nearly all our travel was to visit family (some of that to do lovely things like attend funerals). Our house is worth a lot on paper but is old and small and has lots of deferred maintenance and old furniture. We have 2 over 10 year old cars. The second was bought b/c child 1 needed a vehicle at college for projects and still uses it. Then there’s the occasional check that we send to help family members.
We are very fortunate and I really am in no position to complain…I guess we are in that donut where we don’t qualify for need based aid but we really don’t have the $65K some of these schools are charging. I will reduce how much I’m putting in retirement (H is a little behind), further put off home repairs and getting grown-up furniture and maybe start charging child 1 for the expenses she’s incurring living at home, maybe work longer than I had hoped. Any pray those cars hold out!
Good luck everyone!