My Diatribe on Financial Aid

[DocT]

The median family income in the USA in 2006 was $48201 - this is the 50% point. This is interpreted by some as the average family income

[DocT]

In 2006, 19% of families had an income above 100k - obviously not an "average" family.

[ericatbucknell]

The median family income in the USA in 2006 was $48201 - this is the 50% point. This is interpreted by some as the average family income

im going to post this again:

the median family income in this country is approximately $60,000. 2006 cps data puts it at $58,500, though i have seen more recent numbers in the $61,000 range.

from the 2006 cps data, a few other percentiles (rounded):

05: $11,000
10: $17,000
20: $27,000
25: $32,000
40: $47,000
50: $59,000
60: $72,000
75: $98,000
80: $105,000
90: $150,000
95: $190,000

edit: also, median family income for parents with college-aged children (well, those who are between 45 and 54) is around $76,000.

FINC-02--Part 1

(doct, you are reporting median household income figures, which make little sense in this context.)

[bartleby]

Yeah, but a 25 year old guy living alone counts as a 'family,' so does a 75 year old retiree.

"also, median family income for parents with college-aged children (well, those who are between 45 and 54) is around $76,000."

Exactly. Saying what the average income of a family is is irrelevant. We're talking about families of college students.

[DSC]

Fair enough, but that gets in the way of all my vitrol

My point still stands. The hurdle of attending any college is much more difficult to overcome for the majority. Deciding upon a 'dream' private or out of state school is a luxury, and should be treated as such. People have to make sacrifices in order to get luxury items. Private college is clearly a luxury item.

[DocT]

The point is that per capita income has even less relevance. Bartleby: are you trying to say that a typical family of 4 income is 4X 40000 = 160k?????? Because that is certainly not what a typical family in the US makes.

[kelsmom]

I understand where DSC is coming from. My friend's husband makes more in bonus money every year than my husband makes in salary. She made an offhand comment the other day about how unfair the financial aid formulas are, because her family doesn't qualify. Huh? I guess the more you make, the more you feel you need to have ... so you don't save what people who make less than you feel you should be able to save. Then you complain that you can't get free money & those of us who make less are amazed. It's a battle that is never going to end.

The high cost of state schools is an issue. It is true that Michigan public colleges are very expensive. UMich is $22,000 next year for freshmen & sophomores, $23,400 for juniors & seniors. MSU is $19,000 next year. Even Wayne State University, a good commuter option for many students, has a COA of $14,400 for next year (for commuters!). These costs are hardly a drop in the bucket, and many Michigan families have experienced pay cuts, benefit reductions/copay increases, job losses, etc. The "best" state scholarship Michigan offers is the Michigan Promise Scholarship. Those who qualify for this scholarship are eligible to receive $1000 in year one, $1000 in year two, and $2000 for the following year (if continuing past a two year degree) --- this is for use in the state only, public or private. $1000 is nowhere near enough to help a typical Michigan family bridge the gap between their EFC and $!9-22k per year. It's frustrating.

And yes, DSC, you get to whine ... that's one of the nice things about CC. It's okay. Of course, you have to accept the fact that your whining will lead to comments you may or may not like!

[BusinessGuy]

Comparing people to those lower down the scale has never been a very successful argumentation strategy. Am I supposed to feel content because I'm not living in the streets like the homeless? Should I feel happy inside that my family covers all of my expenses?

Of course.

However, one does not look to move down or to stagnate, the focus is always on improving; thus the reason everyone compares themselves to those above. There are many people who are far worse off than I am, but those people are not my competition, my competition are those doing better.

What would you think if the federal government told you that since most people in Africa and Asia do not have access to health care plans, there's no reason why you should be complaining -- you're already better off? You would point to Western Europe and say, "Why can't we be like them?"

Do you see the hypocrisy in what you're asking people to do?

[DocT]

A lot of people like to complain and don't fully appreciate what they have. One of the unfortunate things about our society is our necessity to compare ourselves to others we think are better off and whining that we don't have what they have - kind of like elementary school.

[ericatbucknell]

Yeah, but a 25 year old guy living alone counts as a 'family,' so does a 75 year old retiree.

no, he doesnt. thats much of the difference between the 'family' and 'household' definition. (the rest involves multiple families sharing a residence.)

and the median family income IS relevant because its what defines middle class. that the average family with a 50 year-old parent is in a better financial situation than the average family with a 30 year-old parent doesnt mean that 'middle class' changes as one gets older. it means that the average older family is in a better-than-average financial position.

---

anyway,

my only real problem is that this entire 'middle class financial aid crisis' debate is mis-focused.

is it unfortunate that upper-middle class parents choose against dipping into the home equity or retirement assets that would allow them to send their children to private u? eh... not really. its a choice.

is it unfortunate that middle class parents get $10,000 bills in mail from state u every semester? absolutely. those are the parents of many of my high school friends. now theyre in massive debt. my friends are in massive debt. and 'all' they got was a degree from state u.

...okay, i take the 'only' statement back.

im also bothered by the comments that suggest all these middle class kids could go to private u for pennies on the dollar, that THEYRE the ones with options.

one, this information rarely reaches the student. for example, at my very typical american high school every college-bound kid went to the computer lab with his senior social studies class and started an application to one of two local state universities: the flagship (and its branches) or the local former teachers college. and except for the three or four 'gifted' kids who applied to elite privates and the wealthier religious kids who applied to their respective affiliated schools, thats precisely where everyone went.

two, most privates cant afford to give any more aid than they already do. in other words, though an individual middle class student would benefit from applying to wealthier private universities, there would be little net benefit as, in the aggregate, the vast majority of privates cant afford to admit more high-need students than they already do.

so while an informed individual may have options, the uniformed aggregate is stuck paying the ever-growing price tags at state u.

[BCEagle91]

[I understand why you are frustrated that a dream was only able to come have true. But if a college is so much superior that it deserves all this drama, make it work. If it is not - thank your lucky stars that college is even possible, as it is not for so many. Thank your lucky stars that your kid is so smart and hard working. Remember that millions cannot afford college. Remember that there are millions who think that the state school you look down on is the dream. Remember that you or your son or daughter are healthy and don't have a disability.]

I'm not sure why you think that wealthy kids don't get ill or don't have disabilities. Our son is in a third-tier school but he was sick for 18 months in his mid-teens and we were more worried about his survival than college. He recovered just before we had to put admissions stuff together and is happy at an out-of-state state university that's pretty cheap. His workload is much heavier and his work much harder than what I went through when I went to college.

[uskoolfish]

First off--if my state university was as highly ranked as University of Michigan, my child would be there. Our highest ranked university is ranked around 80 or so and has been suffering cut-backs for years. Yes, it costs only $16,000 a year, but I would certainly pay more if it were better funded and located.

Instead my D applied to private universities and was able to make schools with much higher rankings. Yes, it is our choice to allow her to go and we will have to pay over 3 times the cost of her in-state options (without aid.)

The problem is that such a gap between the two expenses and the very real gap between the quality of education is very frustrating.

My H benefitted from financial aid and went to a highly ranked private school--Carnegie Mellon--for his undergrad degree. He is not a snob, but truly believes that the education he got and the doors that were opened to him by attending Carnegie Mellon justifies him wanting to send our high achieving D to a school with better opportunities than an under-funded state university in a less than desirable location.

I wish our state offered better options, but they don't and our option to pay so much for a private education takes a sizable bite out of our income. I am not asking for sympathy, but the venom that the OP is spewing is a bit extreme.

If her children are lucky to take advantage of a private education through financial aid...what educational options will her childrenl want for their own children? Probably the same education or better, especially if they worked hard and tried to save money to make it possible! I hope they are saving their pennies as soon as they graduate school to prepare for their children's education. I hope they don't indulge on cars, houses and vacations!!

[DSC]

BCEagle - I was assuming that if a kid is getting into prestigious colleges, chances are they aren't dealing with Down's syndrome or the like. There are certainly kids with disabilities at these colleges, and I apologize about minimizing them.

And for fair exposure - this is coming as a full pay OOS LAC kid whose family doesn't think of themselves as wealthy. Not as a poor kid who is bitter. I just go to a school with too many people who are getting screwed. I know what scholarships I got offered despite my being a full pay kid to many of these schools, and it just strikes me as unfair to those less well positioned. (and I do fully understand the business reasoning for merit aid, and do certainly think it serves its purposes)

[uskoolfish]

^^^DSC:
Wait ... if I read this correctly:
You are writing this as a student attending a LAC whose parents are not wealthy...and you are complaining because you have rec'd merit scholarships?

Get back to me in 25 years or so when you have your own kids and then tell me how bitter you feel about merit aid.

[TerpDad]

I, for one can not stand, what I call the teaser scholarships that some colleges offer to OOS students hoping we will accept even though it does not come close in actual real financial aid!!!