But median incomes in those high cost areas are typically much lower than $200k. If someone moves to a high cost area with a median income of $100k, couldn’t s/he live like that median (which is likely to be quite comfortable) while prodigiously saving and investing unspent income?
Are you willing to pay or loan for the expensive ivy or top 20 schools instead of cheap state Univ.?
“But median incomes in those high cost areas are typically much lower than $200k. If someone moves to a high cost area with a median income of $100k, couldn’t s/he live like that median (which is likely to be quite comfortable) while prodigiously saving and investing unspent income?”
In really expensive locations this may not be possible, because many locals with median level incomes bought their houses years ago and so pay much less than the market rent/mortgage that a newcomer would have to pay. Hence I’ve had an Uber driver who lives in a $5M house in Palo Alto that was purchased for $50K 40 years ago (and his property taxes are not much more than $1K per year).
California’s Prop 13 is a very efficient mechanism for transferring wealth from rich newcomers to existing residents.
Yes, Proposition 13 causes major distortions in California real estate markets and wealth transfer.
However, most places in the area cost much less than Palo Alto. Also, the families with kids in high school are likely to be the beneficiaries of Proposition 13.
I believe it all depends on cost vs value top colleges provide over regular state schools. It is undeniable that graduates from Ivy league schools achieve more that graduates from state schools. I work for a well known company with the office next to the state school. I don’t remember we hired anybody from that state school while we go across the country to hire top students in very top private very expensive schools.
So funny that CC often reflects someone’s values. The rich need not reply. Why? Because they don’t fit someone’s idea of what should be done or they cannot relate? Imagine if a poster said, no one with an income below 50K should comment because I am not interested. Actually, I’m interested in all opinions not just from people with a similar income.
In many areas of the country, incomes are very high and so is the cost of living. You may/may not live in one of those communities but if you do, you will realize that a high income does not equate with a lot of savings. Housing costs are staggering and not many people bought their houses 30 years ago as cited above. How would they if they have college aged children? In addition, if you earn more you pay more in taxes so it’s not as though the extra income is flowing down.
For what its’ worth, we are high income and I have always driven an older car by choice. We did go through a lease car period. I think it’s beyond silly to pay for a moving piece of metal. If it’s safe, I’ll drive it.
For the folks hung up on the 1% ( or 10% for that matter), many of the 1% folks have a very solid education-- so they move to areas with good school systems and send their kids to the same. They send their kids to specialized summer camps and have them doing EC’s since birth. So when it comes to applying to college these kids are ahead and gain entrance to the best schools more easily. Throw in legacy and it’s often a slam dunk. It’s not merit but it’s the parent investing in their kids.
These parents also have their kids do unusual sports or activities to separate them from other kids. In other words, they have a strategy for college. And it often works. And they are willing and able to pay the extra money for college. IF the kid is weak academically, they often wind up at expensive but softer LAC’s. Many cost in excess of 50K though their value is likely much less than a major state University.
If you have genuine financial need, the top private colleges will be less expensive than the state universities. My son’s roommate is an example of someone for whom Williams turned out to be less expensive than SUNY Binghamton (he is from NY) due to the generous aid package at Williams. There are many, many such examples.
Not only that, but everything else is covered, too- all your books and textbooks, storage/boxes, travel; if you need a suit for interviews, they’ll buy you one of those, too!
We are one of the families that people on this site call “donut” families, though I don’t fully understand that concept. Yes, we saved all our lives with the goal in mind that our son should be able to go to any college he wanted to which he was able to be admitted based on his grades, etc. We wanted him to pick a college based on its “fit” with his personality and interests. His first criterion was to go to a college “where I’m the dumbest person there” (a comic exaggeration- he actually is excelling at college… but you get his point), so we full-heartedly supported his choice.
We have not tried for aid yet. We are going to try for aid for son’s junior year, once our savings have dipped a bit after the first two years, mainly because of the textbook benefit. Even if they offer him only the tiniest bit of other aid, in the form of a loan (which they cap at $4000 for richer families- no loans in the packages for the poor)or campus job offer, it will be worth it because any amount of aid ALSO comes with free books for all your courses, and those cost a lot of money.
@Happytimes2001 Top LACs are very academically rigorous and are more selective than many top universities. Additionally, they provide some of the most generous financial aid in the country. Graduates tend to be successful and satisfied, and they donate to their alma maters in high numbers.
That suggests that he would have been dissatisfied with any college that was not a reach for admission.
The answer is simple, to me that is.
I would definitely loan just for the ivy league name to appear on the degree. I mean, to put it in an easier context, imagine a state school as a cheap runabout like a Toyota or Honda. And the Ivy League as an Audi or BMW. Do you really want to be driving around in a cheap econobox runabout when you could have been in an Audi or BMW? It is definitely gonna sting once you appear in a job interview where you have the cheap state title on your degree and your rival has an Ivy League title on his degree. Same goes if you pull up to a stop light in an econobox and the guy next to you has the much nicer german vehicle equivalent.
I have to say that I am really having an issue with this “cheap state school” talk.
One of my kids just graduated from one of the best state schools in the country and had a fabulous experience. She got into a competitive gap year program and will be continuing her education 2-3 years from now.
My other child stayed instate at a school that cost us less than $20,000 a year. From there she attended an 18 month graduate program and is now living on her own, 100% financially independent.
I have no problem with families spending $70,000 a year for school if they can afford to.
Actually yes, I do want to drive a Toyota instead of buying a more expensive car. My Toyota runs great and has for a long time. Similarly, my alma mater, the local public flagship, provided me and my spouse with an excellent education and we’re very happy with where we ended up in life: in a position to pay for our kids to go to the same great public U, and help them buy their first Toyotas. We also prefer to live in a smaller house than we could qualify for, in a not-so-fancy suburb. We have our needs met and life is good. It has never once “stung” to have people see “University of Minnesota” on our resumes. Believe it or not, in Minnesota, employers are impressed.
The richest guy around us would fit right in with The Millionaire Next Door. He definitely is a multi-millionaire in property ownership alone (investment property - not counting his own place). He’s never driven anything except a Chevy. He and his SO have Impalas now. Of course he also owns some impressive old Chevys he’s restored, one he’s turned into an electric car simply because he wanted to “play” with it, and things like that. If he wants something he gets it. He has no desire for an Audi or BMW (nor any other similar car).
I know far, far more in this category or similar than I know who flaunt their earnings by what they drive. Eons ago when I worked in a local grocery store I learned that many who had money were those who also purchased store brands on a fair number of items. Those who didn’t have money were those who always bought name brands. I started investigating store brands due to what I saw. Many are indeed just fine. For others, eh, we tried them.
I think some feel the need to “look” rich while many of the truly wealthy (1, 10, 20%) just don’t have that need.
It’s been shown many, many times that the name of the school on a diploma has limited effect on jobs. There are plenty of schools that will get one their first job for most professions. There are some that won’t do as well too, but I’ve yet to see differentiate between public/private. I know a Top Engineering School (of which most are state schools) will trump an Ivy name for types of engineering, esp since many Ivy schools don’t even have the various engineering specialties.
The car example is a very poor analogy. An education from certain colleges and programs can set you up for better career success.
The better example is in my profession, accounting and tax. I worked for one of the Big 4 firms in LA. We heavily recruited from USC which is considered one of the top accounting programs in the nation. We gave dozens of summer internships to USC undergrads who were almost guaranteed an offer of employment the following year. The cheaper option for an accounting degree also in LA is Cal State University - Northridge. But my firm didn’t even do on campus recruiting there and hence they didn’t get an opportunity for one of the coveted summer internships and employment.
Just one small example of taking the cheaper college option could greatly effect your career outcomes.
Let’s lay to rest the car analogy please.
@MrThatcher, Aren’t you the 19-year-old who just bought a $76k car and decided to keep your $62k car just for getting groceries? When you graduate from college and you’re the one paying the bills you may feel differently.
In the US we say borrow. To loan means you’re giving someone else money and they owe you. So it appears that the OP is an international student or recent immigrant. Most people in the US don’t worry about prestige the way other cultures do. If they don’t want to hear from comfortably full pay families I think the real question is whether or not people would borrow for an elite school. I think the answer would depend on how much needed to be borrowed and what impact that would have on the long range financial health of the family.
@austinmshauri Yes it’s me and not it isn’t 62k but a more modest 57K. I’m just saying I know what it’s like to be in the wrong car at the wrong time. Well anyway, what’s wrong with the car analogy? It works for me and for places I’ve been to. Trust me, the country club is a perfect place to see the analogy work.
@socaldad2002 In engineering there are schools that are preferred too, and that often varies regionally.
Regardless of where students are considering, I tell them to ask where recent grads have gone. Ask this at the department level, not admissions, as admissions will rarely know anything significant. If the student likes where recent grads have gone (schools/jobs) then the chances are good that they can do similarly if they perform similarly. If they aren’t given any info or don’t like the info, take that into consideration when making decisions. Pending what they want to do, some schools aren’t worth “free.” Others can be a terrific bargain. Public/private still means nothing.
@writingpumpkin03 Yes, there are many very good LACs such as Amherst/Williams etc. And there are many which are not and still charge a hefty premium. Likewise, there are many excellent public Universities which are far better than private counterparts. And they are far less expensive. And there are some private universities like MIT for which a degree with give a student and edge for life. Ask an MIT grad.
If you can afford any education for yourself or your child, great. If not, the options are different and one has to make choices. Education is very expensive for all but the very richest Americans. ( Even if you are not paying the $ is coming from endowment or some other area and the cost is still there) And even those in the top % will feel the impact on overall wealth after putting a few kids through undergrad education. Three kids would mean 1 million less after tax wealth. So that’s still significant for most and impossible for many.
I got a “free” undergrad and graduate school education from a top Ivy league school. There were actually merit AND aid based scholarships when I was at school. I got both. Although I didn’t pay, someone did and I am very thankful for that. Of course, the money I’ve paid into the income tax system has balanced out the free money the government gave me in Pell grants. A fair trade to be sure.
I believe most parents in the US cannot afford to pay for their kids college today without a lot of worry. If you look at the average retirement savings portfolio you will see that people don’t have a lot of options so this conversation is ongoing.
No bias there!
I can point folks to many adults who give their college credit for who they are now, most of it positive, some not, and “not” is highly correlated with “too much debt” or “way too far beneath the student” average at the school without a meaningful Honors College or specific program. (eg 30s ACT at an average 21/23 ACT school)
None know what things would have been like at other colleges to compare, and of course, we can’t turn back the clock to see what would have happened with a different choice.
@MrThatcher If this is your goal in life, then it’s the path you need I suppose. Good luck with it.
For most I know, it’s not the goal - not even close. It’s probably the circle we choose to hang out with. Humans naturally align with those they feel they fit in with. The key is figuring out our choice in circles are not the only circles out there.
@socaldad2002, there’s quite a big range of schools between USC and Northridge as I’m sure you’re aware. And a kid who can get in to a top 20 school pretty much is certain to have options that are as cheap but better than Northridge.
How about comparing between USC and UIUC/UT-Austin instead? Or heck, even USC vs. 'Bama/UT-Dallas?