<p>“Yes, jnm, the med school students at this moment are in a tough position.”</p>
<p>Absolutely. She is very fortunate not to have the huge weight of undergraduate loans, too. With the costs of med school, and the precarious unpredictability of what future salaries will be, that would worry me too. I always think doctors are well worth the high incomes they currently make. With those kind of expenses, and liability insurance, and so much responsibility and training…they absolutely deserve to be well paid. I hope that doesn’t change in the future, as we certainly need to keep getting the best trained and smartest people in the field.</p>
<p>I guess we can hope that she marries another doctor? Who might be a bit older and has already paid off his loans!</p>
<p>“Also, it is my greatest pleasure to pay for their education and my kids, in my mind, deserved it, as they worked very very hard to get to where they are and made the very most of their college years.”</p>
<p>Your children are extraordinarily fortunate to have that kind of support. They have been given the very best odds to end up happy and successful.</p>
<p>I dont believe this is true now, and I don’t think it is likely to become so. The myth of the lucky poor is just that, a myth, fostered by a few anomalous exceptions. I don’t know why so many want to continue to embrace this myth–it often seems to lead to a sense of aggrievement which I just don’t understand, and which doesn’t lead to any good for the believer.</p>
<p>This is one of those ‘beliefs’ that few people have confirmed with facts. I haven’t seen any evidence that these schools have a ‘bimodal’ distribution of students in terms of family income.</p>
<p>Suzie, you are a good mom. I agree that your kids are lucky to have you, and fortunate to start out in life with a solid education and no debt. </p>
<p>Also, there is no place on this planet in which it is advantageous to live in poverty, to grow up in poverty. It is so incredibly difficult to climb out of poverty, and just the exhuastion of the day-to-day making it through. I can’t figure out why people would think financial aid makes this “better” somehow. A pell grant? I wish the pell grants were three times what they are right now. For the same kids.</p>
<p>I’m not sure that there are any people making an argument is that it is advantageous to be in poverty. I think the argument people are making, is that the middle class is being squeezed out of higher priced universities.</p>
<p>Of course, for most people, no matter what situation we’re in…we have to have something to complain about!</p>
<p>Well, actually someone did say that they had a great income but their kids were penalized for it if the parents can’t stomach the college costs and it was unfair how some families had to pay less for college.</p>
<p>Also, often on CC, I read upper middle class families who say they can’t pay out of current income and that is understandable as who can pay $50K out of current income unless they are truly rich? But they don’t seem to consider taking out a loan which they likely could afford to do, like they might do for a car or house. I have loans for my car, my house, and my kids’ educations as I can’t pay it all out of current income.</p>
<p>I think the middle class is having a tough time affording a full pay education at private schools, and that the state flagships are being filled up by these kids, which is causing others to have to either borrow or go to a directional U.</p>
<p>It’s a tough situation all around.</p>
<p>I think the misconception arises when the middle class begins to believe that this is somehow “caused” by low income individuals. It is not. But, we are so indoctrinated into the idea that it is a “class” situation, we turn on one another, rather than looking at the real circumstances causing the unaffordable rise in tuition. It’s not low income students, and it isn’t up to low-income students to “tell” other people what they “should” be able to pay for something, either.</p>
<p>The real problem, well, I won’t bore you with it again… since it’s Friday.</p>
<p>A. I really don’t want to discuss my own family’s financial situation here, but the assertion that people between 75k and 125k are necessarily full pay appears to me to be quite incorrect.</p>
<p>B. the people who really are advantaged, of course, are those with substantial incomes that they are in a position to disguise. I am sure those folks are not that few.</p>
<p>C. There is a meme running around that student loan debt is the next sub prime crisis. I doubt this very much. i. the total volume of student debt is much smaller than the total amount of mortgage debt ii. The time for the crisis to have peaked was the last two years, with peak unemployment. If the number of “defaults” in that period has not shaken financial institutions, the number as the employment recovers will not (and if employment does NOT recover, we have bigger issues than student loan debt - we will likely have another mortgage crisis) iii. The average student loan is not all that big - about 25k I think. The 200k loans generate wonderful CC threads, but are really not that common.
iv - stories of unemployed grads from tippy top privates may also be fun, but in fact most of the people graduating from schools at that level seem to still be getting jobs, often decent ones v. probably in fact the shakiest part of the student loan thing, certainly where defaults on federal loans are highest, is the for profit college sector. That seems not to stir the same angst that say, NYU does, for some reason</p>
<p>D. Its not clear how much of the escalation in college costs is due to gilding the college experience, and how much is Baumol’s law - the tendency for prices of services to go up faster than inflation, due to productivity improvements lower than the economy average when wages are increasing. The former can be dealth with presumably by seeking out more spartan schools (the tippy tops that have lots of quite affluent full pays are not likely to do this) and the latter only be real productivity improvements.</p>
<p>There ARE no “defaults.” You can’t default. You cannot default on student loan debt any more than you can “default” on back taxes. What are you talking about?</p>
<p>In fact, I’ll give a personal example of being squeezed out. When I take my son on college visits, we’ve also have been bringing one of his friends with us. There is one school that we’re going to visit, that I am very familiar with. It is extremely expensive, gives almost no merit aid, and doesn’t give out very good financial aid to higher incomes.</p>
<p>I don’t know his mother’s income, though she is a good friend. Too personal a question to ask. But they are self employed, older parents, probably upper middle class, who are trying to hang on in this economy, and put something towards retirement. She has said there is no way they can afford much more than 20K/yr, unless they are live on rice and beans only, they don’t want either them or their son taking out loans. Believe me, I understand, as people who are nearing retirement age… should not be taking out loans.</p>
<p>So I’ve told her that she needs to fill out the school’s EFC calculator before we go visit. If they will give her nothing (which I suspect is true), then I won’t even take him there. She has told him how much they can afford, and that if a school cost more, than he can’t go. To which I say, then don’t have him visit and apply for that school. I don’t want him to go through that disappointment.</p>
<p>By “default” I mean not make the payments on the loans. if you dont think that can happen, how do you think the volume of loans can effect financial institutions?</p>
<p>Then they don’t send their kids to their top choices. Believe it or not, most people at the bottom end don’t do that either - it’s only a relative handful of schools that offer the kind of full-ride-or-close-to-it type of assistance.</p>
<p>" the people who really are advantaged, of course, are those with substantial incomes that they are in a position to disguise. I am sure those folks are not that few."</p>
<p>Yes, absolutely. Those who have a paycheck they can’t hide have a different set of circumstances. I know a number of people who are multi-millionaires because of certain assets, but not by annual income, and get financial aid. I don’t blame them at all, that is the system that has been set up. But they are definitely in an advantageous position!</p>
<p>"(at 70-100K/year, who has that to spare), "</p>
<p>IIUC, if you make under 100k and are have an EFC of 50k, you either have substantial assets, or are looking at a school with fairly unique approach to calculating need, one quite different from FAFSA.</p>
<p>“it’s only a relative handful of schools that offer the kind of full-ride-or-close-to-it type of assistance.”</p>
<p>And those schools are what the OP’s initial question was referring to (see post #1):</p>
<p>“So, what do you all think? Will elite colleges soon become a place for only the wealthy and lower class, or do you imagine some solutions emerging in the near future?”</p>
since it’s Friday.</p>