<p>But the poor/middle person will still have some sort of “stuff” that can be thought of as a portfolio. Stuff in the portfolio can be exchanged. For instance, a middle-class guy with no savings but ownership of a car or a house is in a different position than an investor with the ability to own several houses or ten cars. Buying, selling, maintaining, renting out, or other transactions with these assets is different when you have the larger set to work with. </p>
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<p>That’s true of any financial aid (ie, differential pricing) scheme that takes wealth into account, isn’t it? It rewards poverty, which can be an incentive to become poorer or appear to be so.</p>
<p>One can go through the Housing Bubble Blog and find many examples of folks with large incomes that blew through it all. HELOCs on their houses, leased luxury automobiles and heavy credit card debt. If you want a funny example, look up Casey Serin. He had between five to seven homes and I think that he lost them all and admitted committing fraud to do so.</p>
<p>^ Every student should be required to exit college with the Stafford loans. My earning power after 4 yrs will be no greater or less than the earning power of someone much poorer or much richer. At some point, richer grads can have their parents pay off th loan, essentially arriving at the same point they would have been: Mom & Dad pay full freight. But for students who are wedged in the ~$100K family income range, their folks cannot afford to pay off their loans any more than the poorer students’ parents. </p>
<p>So in answer to your question, kayf, I would say requiring that first $5500 of aid MUST be in the form of alona owned by the student, and only after then supplemented by grants, scholarships, etc, would be more equitable. Again, assuming same degree, same school, same drive and motivation, then to assume my earning power is any greater after 4 years of undergrad seems illogical.</p>
<p>Oh, for goodness sakes. Of course it is preferable to have MORE money than less, for the simple reason that is very easy to get rid of the money, income, etc. Anyone who wants to be “Poorer” than he is can do so very easily. The problem is to avoid become poorer when you have kids going to college. THAT may be more difficult to do in the upper incomes.</p>
<p>siserume @ #496: Your summary is not a summary. It is a restatement of your own opinions from previous posts, which only contributes to the same infinite loop you complain about. </p>
<p>Not applying for financial aid will give your kid a 100 points SAT bust at colleges that are not need blind. Also, consider bargain hunting abroad - England, Canada, etc.</p>
<p>Colleges look at you with dollar bills in their eyeballs as a source of funding for buildings, salaries and subsidies for other students. Some think it odd that they don’t like to be considered the personal piggy banks of colleges.</p>
<p>No offense, but, I know students who work at Dunkin’ Donuts from 3-11 every day while maintaining a schedule filled with 4 AP classes who go to a public high school. Those students should be receiving financial aid, not you. My personal outlook: spend your money on college, not on high school.</p>
<p>My family’s income is around $70,000 and my parents refuse to accept any sort of need-based aid because they realize the situations others are in.</p>
<p>jellx, where are you going to school/applying? because in this day and age, most colleges cost over $40 k/year to attend. are you saying that your parents could afford to pay full tuition and live on less than 50% of their typical income?</p>
<p>All Angel…if the parents have saved 10-20% every year since they were married on top of some retirement savings, of course they have savings and could “afford” $40,000 per year …the colleges will tell you that, your financial guy/gal will tell you that. In the early 80s we were told to save enough to have $20,000 for a state school for our kids and at least $40-50,000 per year for a private. This was predicted 20 some years ago by saavy financial planners. You might not WANT to pay it, but if you saved just alittle bit every year it’s there…albeit reduced significantly since 2004. Many people were able to live modestly and save 10-20% every year. Heck, if you didn’t buy into that horrible “lease cars” stuff you could save thousands every year after you paid off the car or bought one for cash without any appreciable lifestyle adjustment. Remember the day you didn’t have daycare expenses anymore? That was a biggie for targeted savings. That particular poster’s parent may appear an “oddity” and I bet my bottom dollar they wouldn’t turn away a grant or merit aid… but it doesn’t mean they weren’t “aware” and it doesn’t mean they didn’t “plan” and it doesn’t mean they are stupid. They are probably not going to be “living” on less than 50% of their income…but I bet they are certainly cutting back and taking as much as they can out of current income and I betcha they saved for the difference. This is not a foreign financial planning concept at all. I distinctly remember sitting in a lunchroom with co-workers many jobs ago talking about how much we were each indivdually saving for our “babies.” Most then were saving $25-50 a week or so in those days and we were “earning” salaries then in the mid $20,000 - maybe $30,000 per year and some of the “bigger” savers had working spouses, too, which made it even easier to save alittle bit back then. And how many times did planners not tell you to “bank” as much of a raise as you could? You just do it as attractive as that bigger house or a newer car sounds…you just do it if that is your priority.</p>
<p>I think the person who said that anyone who needs finaid should have to have a minumum amount of loans was dead on. Everyone here seems to want equal opportunity, but when Johnny Lower Middle Class graduates with no loans, and Suzy Upper Middle Class graduates with some loans, it seems to me the finaid is NOT fair, and should be changed.</p>
<p>AliAngel, my parents scrimped and saved for decades so they could send me to college. I went to a public elementary school, a public middle school, and a public high school, and never on a vacation so my parents could save the money. My parents have both worked for over 30 years, at some points, 2-3 different jobs each. So now, yes, they can afford for my brother to go to school for his Ph.D. and me to go to school for 6 years for my MBA, wherever we want. All of his aid, as well as my aid will be, including a 15K/year scholarship I already won, is MERIT-based.</p>
<p>And BC, those students should receive financial aid because they NEED it. I’m sorry, but I hardly think someone making 400K a year should be considered NEEDY alongside someone who is working 8 hours per day after school to make an income of 15K.</p>
<p>That’s not supposed to be good, it is good. My parents legitimately worked hard without messing with the system to squeeze money out. </p>
<p>If you’re so needy you need need-based financial aid, you shouldn’t be sending your child to a 42K boarding school. Period. Therefore, I hardly consider you “needy.”</p>
<p>Glad to see someone actually agrees with me LasMa!</p>
<p>I’ve said it before but since it was brought up again, I do agree that the first $5000 or so of aid depending on year and amount available should be in the form of a Stafford loan for all students with no exceptions. That seems very fair and equitable.</p>
<p>[All Angel…if the parents have saved 10-20% every year since they were married on top of some retirement savings, of course they have savings and could “afford” $40,000 per year …the colleges will tell you that, your financial guy/gal will tell you that. In the early 80s we were told to save enough to have $20,000 for a state school for our kids and at least $40-50,000 per year for a private. This was predicted 20 some years ago by saavy financial planners.]</p>
<p>The period from 1982 to 2000 was a secular bull market. Stock market gains were oversized compared to historical norms. A secular bear market typically follows a secular bull market where returns are below average or even negative. These markets can run 14 to 20 years. Take a look at a long term chart of the $indu and you can see long periods of negative or breakeven returns.</p>