WSJ: College Loans Hit Upper Middle Class Hardest

<p>My parents do not have the money to pay for my college. They have debts from early on that still need to be paid off (still 20K in debt for something they will not tell me about) and are paying bill after bill with not much room. So, if I didn’t take out loans I would simply not be able to go to college. I already went the community college route getting my general education classes out for barely anything for three years. I am planning on getting a part-time job and my parents never thought I’d go to college in the first place. They never saved and being in this 15K EFC thing has made it ridiculously hard for me to pay for even a state school. We live in California, also.</p>

<p>One of my dear friends is paying full fare at CSUN out of his own pocket for three years (he was in community college for 5 years). His dad owned a company, mine did not. So him paying around 60K for three years is entirely possible for him but not for me.</p>

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<p>Utter nonsense.</p>

<p>There are 2,774 four-year universities in the United States. Sixty-two of them are need-blind/full-need.</p>

<p>The vast majority of students commute to state schools, pay resident tuition and receive little financial aid beyond Pell Grants and Stafford loans. They have to come up with almost everything.</p>

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and most of those include loans in the definition of providing full-need.</p>

<p>^^ and how many students get their degrees in the end, 40%?</p>

<p>We’re in that ‘upper middle class’ income range in NJ.
We’ve lived beneath our income for 30 yrs and was still ‘only’ able to save 1/2 instate public for one son. </p>

<p>He had acceptances to uber expensive privates and several instate public Universities.
He was disappointed for a bit to turn down his ‘dream school’ but thrived where planted and is now gainfully employed in his field and loving life.
IMHO, many parents need to resist the urge to fund a school out of their ability to pay unless they take huge loans and wreck their retirements, etc.</p>

<p>YMMV.</p>

<p>WSJ blames parents for not saving, how surprising.</p>

<p>I think the system is being set up to suck most of us dry. Don’t blame those who make a little more or a little less than us, whether you make $30K or $300K. The key question is who benefits the most from the system. Only the really rich people can afford pricy colleges, with the poor students there to keep the system going. The rest of us have to make tough choices. I don’t blame the really rich people either.</p>

<p>Similarly, people blame majority for discrimination. Who are the majority? Take minority and women away, you only have white males left and they are a minority group with lots of poor guys there. Again, it’s the system.</p>

<p>With more women and minority on Supreme Court, in Congress, and on college admission committees, we will have a better system. Colleges will be affordable and there won’t be a $2.5B house for sale.</p>

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<p>Good suggestions. And you don’t have to go to a pricy college for a good education. If your dream job is to start working for Google or Apple, UCB is just as good as Stanford if you are a top student.</p>

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<p>Last time I looked, UCB was a pricey college!</p>

<p>Well fellow upper middle classers look at the bright side. Colleges consider us rich, the impoverish consider us rich and the folks who make the big plans in that 51st state keep lowering the bar on what is considered rich. There…ya see…your rich! Feels great doesnt it?</p>

<p>Originally Posted by CTScoutMom
I understand it’s much easier for us than for someone with income of only $50,000, but they’re not asked to come up with much of anything.</p>

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<p>Absolutely not true. I know this, as I worked at a school that had lots of families with that income. They were asked to come up with a lot of the cost.</p>

<p>I wonder how many parents would raise their hands if asked if they had college savings accounts for their kids. I bet not many. There are a lot of reasons why college is not affordable, and many of those reasons have to do with rising tuition rates. However, parents who can meet their BASIC needs and have some left over “can” save for college. Whether or not they choose to do so is their call … but what is society’s responsibility for providing financial assistance when the choice is to spend the money on other things? Just wondering.</p>

<p>Anyone, everyone can look at the college situation when the kid is in junior year and make the decision to quit the job, donated the assets and become low income. Going lower in economic status is a chute, going up is the ladder.</p>

<p>I don’t consider people making $200,000 rich.
Rich is having assets of 7 figures, a house larger than10,000sqft, and staff
;)</p>

<p>Our oldest attended a school that met full need( yes this did include self help of Perkins & Stafford loans as well as work study) Our EFC was about 1/4 of our before tax income, it was a struggle to pay it & she helped by contributing her summer earnings.</p>

<p>Her 2nd choice was instate public school for about the same COA.
However, state support of higher Ed has dramatically decreased even in the last ten years, students are bearing almost the complete burden of attending college even though a college education seems to be more important than it was a generation ago.</p>

<p>kelsmom-
I know it’s not the same in all parts of the US, but in our neck of the woods, most parents DO save for their kids’ college educations. With competing responsibilities it IS difficult to determine just where and how much to send to which necessity.</p>

<p>We’ve chosen to fund our retirement fully, provide for our special needs daughter and then save for son’s education with much of what was left after that. Vacation, house renovations, new (for us) cars, etc were way down on the list. </p>

<p>So, son has max Stafford loans only to repay - a compromise that works for us.</p>

<p>I do feel badly for students in upper middle class families who discover at age 18 that their parents chose other ‘stuff’ over saving for their college education. As though that elusive tuition fairy was going to appear.<br>
Do some parents honestly not value education? Do they feel that their 18 yr old has the wisdom to figure it out on their own?</p>

<p>Music mom, I do know parents who are fairly flush that hadn’t planned for helping their kids with college.
I have impression that in these cases the parents had paid for their own education, through working and scholarships, and anticipated that their kids could do the same thing.
What their kids end up doing is often go two years to community college and transfer to instate university.</p>

<p>For those of us “upper middle class” that DID scrimp and save, we, in no way could know, fathom, or predict that we needed to save $120K per kid, to attend an in-state UC! That’s $360K for my kids to attend the local college! </p>

<p>The community colleges are impacted in California. They’ve slashed classes like sale items. The kids are taking 4 years now to finish because the state budget has cut monies to the community college districts AND, the CC transfers are complaining that they can’t get into the state universities they thought they could get into-there’s no room. </p>

<p>FYI-All states are not alike and the FAFSA people need to update their 1965 rates for current cost of living rates. A 1900 sq. ft home, in my neighborhood, is selling for $580,000. Rents for 1 bd apartments start at just under $2000. </p>

<p>The sticker shock is something I see at the local high school (during registration) when people ask about where the least expensive area is to live in the neighborhood. My mother lives in the “barrio” in a small 2 bedroom home-starting price: $250,000! She bought the home in 1967 for $3000! Welcome to California!!!</p>

<p>* A 1900 sq. ft home, in my neighborhood, is selling for $580,000. Rents for 1 bd apartments start at just under $2000. *</p>

<p>A condo in my zipcode the same size recently sold for $590,000. ! Our house is less than 1000 sq ft though so a condo that big would be pretty roomy.
When we moved in it was very much a blue collar, light industrial neighborhood.
It still has light industry, but considered one of the most popular neighborhoods in the area.
Just glad we aren’t trying to buy.</p>

<p>Aunt Bea - that’s it exactly! We saved, and structured our mortgage to end in time to convert those payments toward tuition. We’re not as bad as your neighborhood, but starter homes start at $200,000 - these are Capes, with unfinished basements, so 4 rooms downstairs and 2 upstairs with sloped ceilings, and one bathroom. </p>

<p>kelsmom - again, it depends on your state. In CT, a student with family income in that range who gets into the flagship state university that will cost me $25,000 will cost them very little, because of state aid. Maybe it’s not that way in other parts of the country, but it is here. For us the decision to save meant sacrifices - and no, I don’t mean not having the $150 a month cable TV package (though some of our neighbors in subsidized housing do have that package). </p>

<p>Community college is not a great option because there are so many students that you can’t get the classes you need. Sure, it’s cheap, but it takes 4 years to get the classes you need to transfer.</p>

<p>Captofthehouse - The idea of quitting your job is actually something people around here do! If we dropped our household income by $20,000 our EFC would drop by $9,400 and our taxes would drop by about $8,000 - so an effective loss of $2600. Less of the loss if it results in lower transport costs, and frees up time to focus on saving money rather than making money. (I can make up $2600 in savings on my grocery bills during the months I’m off work). It’s no different than the lower income families who make the decision to not look for a better job because they’ll lose their benefits - and believe me, that decision is made on a regular basis. I work 4 seasonally (as a tax advisor), DH makes most of the household income. We ran the number, and now that oldest DD is a junior with college on the horizon it makes absolutely no sense for me to return to work full time all year. Between taxes and tuition, I would end up bringing home 10% of my wages, BEFORE expenses, or phase-out of tax benefits. Stop telling me to quit my job - I did that when I would have had to pay for 3 in daycare, and it would have been a losing proposition.</p>

<p>Then do it. If you are truly better off with less income and less in assets, do it. We did it too, many years ago when I quit work and became a stay at home mom. Though I cringe now at the thought of what our lost income was those over those years. For us the reason was different, but, yes, sometimes it is better to have a lower paying job. Just remember to take in the whole picture. It’s not like those years of college are your whole life.</p>

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It depends. Does she want to become an investment banker or consultant?</p>

<p>You’re also not well versed
<a href=“http://www.reuters.com/article/2012/05/11/us-personalfinance-studentdebt-idUSBRE84A0LA20120511[/url]”>http://www.reuters.com/article/2012/05/11/us-personalfinance-studentdebt-idUSBRE84A0LA20120511&lt;/a&gt;&lt;/p&gt;

<p>I also quit my job and cringe at the thought of how much income I have forfeited … not just while I was away from the workforce, but also when I returned. I make FAR less than I imagined I would after my time away, and even with a “plum” new job I am making less than my 23 year old. 52 year olds are not in demand, by the way. So a parent who quits to get some aid gives up a lot, IMHO.</p>

<p>While I realize that the cost of living is more in some places, it sure seems like pay is also higher than it is in lower cost areas.</p>

<p>Does it really cost $120,000 for four years at a UC?! I mean tuition, room, and board … not counting junior’s spending money.</p>

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<p>Only if you’re at a meets-need school. At the vast majority of schools that 9400 drop in your EFC isn’t going to mean squat if you’re out of Pell range.</p>