<p>
</p>
<p>Ha, tell that to all the lovers of hot breakfast.</p>
<p>For those complaining that $250,000/year is “barely middle class” and it’s unfair that you have to pay $60,000/year: do you realize that half of the jobs in America pay less than $35,000/year? (Source: <a href=“http://www.nytimes.com/2012/07/29/opinion/sunday/why-cant-we-end-poverty-in-america.html[/url]”>http://www.nytimes.com/2012/07/29/opinion/sunday/why-cant-we-end-poverty-in-america.html</a>) I know you’re not super-rich, but you’re still much better off than the majority of Americans, let alone humans.</p>
<p>Granted, they’re generally not the people whose kids are going to Harvard—but that’s not a good thing! </p>
<p>Sorry, but I just don’t feel sorry for someone whose parents are spending a decent but reasonable chunk of their income (without taking out any loans) for a degree from the most prestigious school in the world.</p>
<p>A note to those who may be in, or know of, a situation brewing where one parent is refusing to help pay for college…</p>
<p>PLEASE, PLEASE, PLEASE do your research ahead of time! When my son was applying to schools last year, we did not get too far in depth with the CSS Profile until it was time to fill it out in January. That’s when the realization hit us like a brick that a few of the schools he was accepted to would indeed require financial info from both parents for any aid consideration. (His father was refusing to help financially, but his income, when combined with mine, would have thrown us out of any financial aid consideration whatsoever.) </p>
<p>I had made the very erroneous assumption that it would be like filing the FAFSA; requiring only my information. I was told, on more than one occasion, that the only way to get around the non-custodial profile was to provide either a death certificate or a court ordered no-contact order from the absent parent. I certainly understand the fine line that colleges walk in this regard, and can see both sides of the argument, but in our case there was just no getting around the fact that only my income was going to be used to help with college, and we had to find a way to make that work. </p>
<p>Knowing what I know now, I would have discouraged my son from even applying to schools that required the ‘non-custodial’ profile. We weren’t going to be able to get his father to fill it out anyway, and there was no way I could afford to go full pay having to add his father’s salary to mine. </p>
<p>Moral of the story is this: there are many fantastic schools out there that either don’t require the CSS profile at all, or only require it from the custodial parent. Very fortunately for us, my son’s top choice happened to be one that did not require the non-custodial parent info, so he was able to get enough financial aid to make it work for me (and yes, still with plenty of sacrifices). </p>
<p>This will most certainly exclude schools like Harvard and Penn, but it’s much easier to find a financially realistic school BEFORE applications go out than to have to tell your kiddo that they can’t go even if they are accepted, and then have to live with years of ‘what-if’s’ and resentment.</p>
<p>^ excellent post … thanks for sharing your experience … I hope things turned out well for your son!</p>
<p>Dwight – and HUCTW, apparently.</p>
<p>California time 0430 on graveyard and all is fine.</p>
<p>Great post, LavaLava.</p>
<p>Ost: Speaking as someone who is maintaining a happy family of four on less income than the annual cost of a Harvard education – in a more-expensive-than-average region of the country – I would gladly trade for your $250K/year and pay full price for my son’s $57K/year education. In a heartbeat. You’re essentially saying that your family can’t figure out a way to survive for 4-5 years on more than 3x what we survive on (after you paid full price for college). I’m not saying it’s easy, but it can be done.</p>
<p>@confetti - When I read your comment, it reminded me of the many times I bit my tongue at work when the owner complained to me about making estimated tax payments that were more than I made working all year. There are many times I wanted to say, “I’d be happy to switch. You take my salary and make my tax payments and I’ll take your salary and make your tax payments.” I never made that comment as I chose to remain gainfully employed! :)</p>
<p>Under now-current law, in my state, the top combined federal and state income tax rates, including the new tax for Obamacare, total 51+% of income, on ordinary income.</p>
<p>Even for folks making mid six figures or more, it seems to me that they have every right to complain that the government thinks its entitled to more of their earnings than they are.</p>
<p>As for someone making $250K per year, I understand and don’t blame folks for complaining about having to pay full freight for college.</p>
<p>Folks with one child in college who make between $160K and $230K are punished harshly by Harvard with regard to financial aid.</p>
<p>A family with $150K in income from my state with modest assets will be asked to pay roughly $19.6K per year. But a similar family with $160K in income will be asked to pay roughly $24.6 per year. That’s $5,000 out of an additional $10,000 of income. Harvard’s “marginal tax rate” for the extra $10K of income is 50%. In my state, the total federal and state taxes for the extra $10K will be about 35%, meaning the family gets to keep $1.5K of the extra $10K.</p>
<p>With one child, for folks in my state, there is typically no financial aid beyond $235K per year in income. This means that Harvard entitles itself to roughly $39K of the family’s additional $85K of income, or about 45% of gross marginal income past $150K.</p>
<p>In OstPruessen’s family’s case, it appears that they will have two children in college for a short time. If they have modest assets, Harvard would expect, with both children at Harvard, $100K from the family. That’s 40% of ALL household income. This is a family likely paying around $60K per year in federal income and payroll taxes, and then some more in local property taxes and sales taxes.</p>
<p>Between federal taxes and the Harvard tax on such a family, such a family is left with roughly $90K per year to spend on everything else. After these two taxes - federal and Harvard, the family gets to live on 36% of its pre-tax income.</p>
<p>It’s nice to have the income, but there is little justice to having 64% of it taken away because you want the same opportunity for your kids that someone making considerably less has. Talk about a tax on success!</p>
<p>Remember, too, most folks adjust their living standard to their income. Why not? Why go through the effort to make all the money if you’re going to have the same living standard as someone who makes half as much??</p>
<p>Saving even 20% of gross income is aggressive. Even for folks like this, coming up with $100K per year in college costs is really tough. That’s $50K more than such a family is already saving. You can’t go tell the mortgage company that you’ll need a break from your mortgage for a couple of years. Delaying the purchase of a new car for a few years isn’t going to put much of a dent in that additional $4,000 per month with which you’ll need to come up every month.</p>
<p>Of course, if you make $250K per year and you DO save 20% of your income, then you’ll have enough assets that when you have two kids at Harvard, they won’t give you even the small amount of aid that they’d give you if you had very little savings. In that case, the reward for living frugally and saving more money will be that you can pay full freight for TWO KIDS - or about $118,000 per year for as long as you have two kids there.</p>
<p>And of course, if your second kid doesn’t go to Harvard, Princeton or similar school, and doesn’t get a merit-based scholarship somewhere else, then maybe you’ll get to pay even MORE!</p>
<p>I understand what folks are saying, but let’s face up to it - families with income between $160K - $250K per year get screwed the very hardest by how the system works. It isn’t realistic to think that most of these families will be able to pay for their kids to go to these top colleges, at least not with borrowing many tens of thousands of dollars to help finance their children’s educations. And that’s what the schools are counting on. Even Harvard.</p>
<p>It’s a cynical game, it’s a corrupted system. Costs for higher education have grown without any semblance of attempting to remain affordable. Schools have been able to do finance their bloat by absorbing the billions of dollars pumped into the system mostly through guaranteed student loans. For years, parents and students seemed to ignore the fact that no one was paying for this “aid” except them. With interest. It appeared to many that they were getting something for nothing, not quite thinking about how having $30K, $50K or even $100K or more in loans at the end of four years would affect them. With the tightening of the treatment of student loans in bankruptcy, many folks are coming to understand that they have been made indentured servants to the binge spending of out of control colleges and universities, leaving the crumbs to students and parents.</p>
<p>Colleges in the United States have been drunken spendthrifts over the past few decades, and the folks getting it in the chin the hardest are families with upper middle class incomes. At the best schools, folks at the bottom are expected to pay nothing or very little. At many schools, even folks solidly in the middle class get a lot of help. And as income rises past that $250K per year mark, full freight becomes a smaller percentage of income for every marginal dollar of income.</p>
<p>It’s the folks who are quite comfortably off, but not-quite-well-off who get socked hardest in the jaw. OstPruessen has good reason to be unhappy.</p>
<p>“You can’t go tell the mortgage company that you’ll need a break from your mortgage for a couple of years.”</p>
<p>No, but you could take out a home equity loan, sell your vacation home (if you have one) or take out a parent loan and pay it off over the next ten years. That’s what my parents did when I went to college thirty-five years ago.</p>
<p>gibby,</p>
<p>“No, but you could take out a home equity loan,…”</p>
<p>And as I said, that’s precisely what the colleges are counting on.</p>
<p>It isn’t really all that reasonable a solution.</p>
<p>As for how much stuff cost 35 years ago, I remember how much my parents made when I graduated college in 1981, and how much school cost. I went to a private university within driving distance of home, so I was able to save on room and board. Nonetheless, tuition then, in my senior year, was about $3.5K (which my parents didn’t even pay, as I was on almost-complete merit scholarship) and today, tuition - no room and board - at my alma mater is $36K per year.</p>
<p>In 1981, my father made about $60K and my mother made about $20K. So tuition came to about 4.5% of household income.</p>
<p>I remember there was another local college that accepted me that cost $6K per year. Because they didn’t offer financial aid and refused to offer any merit scholarships, I couldn’t even consider asking my parents for that kind of money, and they fell off my list.</p>
<p>My father worked for the federal government and my mother for the county government, so I can actually look at public pay tables and see about what each of them would make today. My father would be getting about $130K and my mother about $30K, for a total of $160K per year total.</p>
<p>So, if I were going to the same school today as I went in the late '70s/early '80s, tuition would run about 22.5% of their income.</p>
<p>That’s a FIVE-FOLD increase in 32 years.</p>
<p>As I was a late baby (third out of four), and my parents were starting to near retirement age by the time I was in college, I just would have never asked my parents to dedicate 22.5% of their household income to my tuition (no less room and board), or take out massive loans (we had no vacation home to sell) to pay for college.</p>
<p>
</p>
<p>I’m a college student with no experience budgeting for a household so it’s okay if you want to tell me to shove it, but I don’t understand why you’re treating the “justice” of taxes and that of paying for private education as the same. The “justice” of paying taxes is another discussion entirely so I won’t get into that. But unlike taxes, no one is forcing you to pay for a Harvard education. It’s an entirely optional expense. A student who can get into Harvard can probably swing a full merit scholarship to another school. For a family making above the financial aid threshold, this seems like the sensible financial decision to make. If you decide that the value of a Harvard education outweighs the value of an education at School X, well, that’s why you’re paying a lot of money for it. </p>
<p>Second, your calculations are assuming that a family is paying for college purely on income. That’s another optional decision that you’ve made because you’ve had 18 years of advance notice to start saving, perhaps longer. It’s a reasonable expectation that a family will use income, savings, and debt if necessary to pay for college. I understand that college savings are looked factored into EFC but if you’re already at the highest income thresholds, its effect on EFC is going to be minimal compared to the benefit of the money existing in the first place. Plus that’s discounting entirely the many ways to save money in assets that aren’t considered by colleges.</p>
<p>Third, I didn’t know whether to laugh or cry when you claimed that lower income families have more opportunity than higher income families. You’re lamenting that you have $90k a year to “spend on everything else” (again assuming you saved $0 in advance). Do you understand that if that leftover $90k were your total income, you’d still be in the top 10% of US households? Do you understand that when families such as yours “take a hit”, that means they have to perhaps live more frugally, perhaps lower their standard of living, and in the worst case, Heaven forbid, downsize their home? Your income minus the cost of living is your discretionary expenditure. For a family that makes $60k, let alone families that make $10k, $20k, $30k, their income minus the cost of living is enough to buy a bag of skittles. It’s simply impossible for them to afford higher education without financial aid. It’s not impossible for you; it’s difficult. That’s a fundamental difference at the root of why financial aid exists.</p>
<p>So you might ask, why not screw all the poor families? If they don’t have a good enough job or enough saved to pay for higher education, that’s their fault. To help them and not me is a “tax on success.” Well, the free market explanation for that is, Harvard can decide how to spend its money however it wants. And someone at Harvard decided that children shouldn’t be penalized for their parents’ financial situations, and families that are in the top single digits in America, like yours, should be expected to drop their standard of living to pay for an education at one of the best schools in the world. That’s their prerogative, and it’s yours to do any number of the following: choose to save earlier, take on debt, have your children take on debt, or pick a different school.</p>
<p>“no one is forcing you to pay for a Harvard education”</p>
<p>My kid would not be attending Harvard if it wasn’t for the financial aid. We just couldn’t afford it – and, in my opinion, a Harvard education is not worth it if you have to borrow the full cost of attendance every year! No one says a student must attend Harvard once they are accepted. Fortunately, we live in a country with many other cost-effective alternatives. My daughter could just as easily have gone to our state school and have been happy. Geez - I went to BU and my wife to the University of New Mexico and we’re both doing fine. If the OP cannot afford the full sticker price at Harvard, then he should take the free ride at UTexas!</p>
<p>My wife is the daughter of a physician who worked in government. The tab for 4 years of tuition, room, board and fees at the private university she attended was about what her father earned in 6 months.</p>
<p>My wife us now a physician who works in government. The tab for 4 years of tuition, room, board and fees at the private university our daughter attends is about what my wife earns in 12 months.</p>
<p>No question, the arithmetic of paying for college has changed dramatically in a generation–and not in favor of families who are otherwise comfortable, but not absolutely waddling in dough.</p>
<p>Sent from my DROIDX using CC</p>
<p>Personally, as a parent, I found that Harvard’s financial aid was fantastic.</p>
<p>I completely disagree with notjoe regarding college savings accounts (assuming that you mean 529 Plans). If the 529 Plan is held by the parents, Harvard will not expect more than 5%/annum of the balance. If, for some reason, the 529 Plan is owned by the student, then Harvard will expect 20%/annum of the balance. In our case, the 529 Plan held for the benefit of my son presumably paid about $2,500/year for his education. He also had $20k in bonds left to him from my parents. I know that Harvard did not take 20% of those assets also.</p>
<p>We did have unusual circumstances (which Harvard allows you to explain on the CSS/Profile), but it is inconceivable that we would have received greater financial aid from any other college (except perhaps Yale). According to FAFSA, our EFC was greater than the COA for any college that our son applied to. The 529 Plan and the bonds were enough for him to attend BSU or the three colleges where he got merit scholarships. By the time he graduated, only $10k of the the bonds remained, and almost all of the original amount of the 529 Plan (the stock market rebound between 2008 and 2012 paid the difference).</p>
<p>Dwight,</p>
<p>“I’m a college student with no experience budgeting for a household so it’s okay if you want to tell me to shove it,…”</p>
<p>I’m more than happy to discuss this stuff with just about anyone. Even if you WEREN’T a Harvard student. ;-)</p>
<p>"…but I don’t understand why you’re treating the ‘justice’ of taxes and that of paying for private education as the same."</p>
<p>My initial mention of taxes was in response to the previous poster who’d mentioned how her boss would mention how much he paid in estimated taxes, and how that amount was more than what she made. I was principally pointing out that no matter how much someone makes, the government doesn’t deserve more than the earner him/herself. It isn’t just.</p>
<p>The justice of financial aid to colleges isn’t the same as the justice concerning taxes.</p>
<p>But justice is part of financial aid. In fact, it’s pretty much what most folks - and what most schools promote - as the reason for financial aid. To make it possible for people who are not well-off to go to fancy colleges, because it wouldn’t be quite fair to less well-off folks if only rich or at least well-to-do folks could afford fancy private colleges for their kids.</p>
<p>The problem is that when the bill is $50 - $60K per year, $250K per year just isn’t well-off. $500K, maybe. A million year, sure, no problem.</p>
<p>“But unlike taxes, no one is forcing you to pay for a Harvard education. It’s an entirely optional expense.”</p>
<p>As it would be for someone not making $250K per year. Or even $90K or $60K. If you say, “Well, it may be a tremendous strain for Family Smith to send their kid to Harvard on $250K per year, but no one said the kid has to go to Harvard,” why isn’t what’s good for the goose good for the gander?</p>
<p>After all, Harvard asks NOTHING from the family at $65K per year family income, which is about 30% more income than the median household income in the US. In other words, folks with $65K per year in income ARE HARDLY POOR, as HALF OF ALL HOUSEHOLDS MAKE $50K per year OR LESS. </p>
<p>So, Harvard asks NO sacrifice for families who are not poor. Not even 5% of income. In fact, as gibby points out, for many, many families who aren’t even poor, Harvard is the cheapest game in town! And, indeed, even though I make a lot more than $60K per year (but not $250K per year), I can pay for Harvard out of my regular paycheck. No resort to savings, no loans. It means I’ll have to keep my current car at least two more years (by which time it will likely have about 225K miles), we eat out a little less, etc., but I CAN PAY THE FULL TUITION BILL EVERY MONTH WITHOUT BORROWING MONEY OR USING MY SAVINGS.</p>
<p>And although I don’t make $250K per year, I make a bunch more than $65K.</p>
<p>I couldn’t do that if Harvard wanted 25% of my income for one kid, or, God forbid, 40% for two kids. Just couldn’t do it.</p>
<p>In fact, Harvard BRAGS that its financial aid is set up so that families should be able to get their kids through Harvard without loans. Unless you make around $235K per year, give or take a few dollars. Then, load up on those loans. Or send your kid to the local State U. Ironically, though, folks making double or more that $235K probably will have no problem paying for Harvard.</p>
<p>“That’s another optional decision that you’ve made because you’ve had 18 years of advance notice to start saving, perhaps longer. It’s a reasonable expectation that a family will use income, savings, and debt if necessary to pay for college.”</p>
<p>Most folks don’t really have 18 years to save. Most folks have their first kids in their mid-20s or a little later. Very few folks who eventually make six figures start out making six figures. And when you’re 25 or 30 making $50K or $60K per year, you can’t always count on making $250K some years down the road. So, if you’re a little bright, you know to first secure basic emergency savings, then make sure you buy a decent home (assuming that your career doesn’t bounce you from place to place) and work on your retirement savings. And since many folks have two kids in three or four years, frankly, having much money out of one’s retirement accounts is counterproductive in terms of paying for tuition.</p>
<p>“Third, I didn’t know whether to laugh or cry when you claimed that lower income families have more opportunity than higher income families…”</p>
<p>Well, I don’t actually make $250K per year, but, so what? </p>
<p>As we’ve seen - Harvard (and other schools) do financial aid at least ostensibly to make things “more fair.” How is “more fair” to ask literally nothing from a family with income of $65K (30% higher than median household income in the United States), but to ask 25% - 40% of the family with 250K?</p>
<p>Do you think that folks who work hard to make a great living do it with the intention of being pillaged and plundered by colleges and universities? Do you have some problem with someone who makes more having some more left over at the end of the day to have a modestly-higher standard of living?</p>
<p>Or must we use social institutions like Harvard to make sure no one (with an income of $250K or thereabouts) will have more than anyone else (these rules don’t apply to the more well-off, or especially to the truly rich).</p>
<p>What are they teaching at Harvard, Marxism??</p>
<p>If you think that paying 25% - 40% of an income of $250K for your kids’ college isn’t a hardship, you really do need to get out of school and earn a living for a while and see what life is really like.</p>
<p>“For a family that makes $60k, let alone families that make $10k, $20k, $30k, their income minus the cost of living is enough to buy a bag of skittles.”</p>
<p>Actually, the family with $65K per year (the Harvard cut-off) has $15K per year more than the MEDIAN family in the US. And likely gets to keep $10K or more of that money after taxes are taken into account. By your reasoning, that family should have plenty of money to buy much more than a bag of skittles. They should be able to afford tuition to Harvard of $10K+ per year! After all, there are families living on only $50K per year! What’s wrong with these selfish twits who think they can’t afford $10K per year for Harvard when folks are living on $50K OR LESS per year!</p>
<p>“And someone at Harvard decided that children shouldn’t be penalized for their parents’ financial situations, and families that are in the top single digits in America, like yours, should be expected to drop their standard of living to pay for an education at one of the best schools in the world.”</p>
<p>Why should a family with $250K in income with 2 kids in college have to drop their standard of living by more than 50%, but the family with $65K (which is still 30% higher than the median) doesn’t have to drop their standard of living at all?</p>
<p>Afterall, I thought this whole financial aid thing was to make things more fair.</p>
<p>Are you suggesting that the folks who have 30% more than the median shouldn’t have to sacrifice at all, folks with 370% should sacrifice the most, more than half their after tax income if they have two kids at Harvard, but then as folks make more and more, their relative sacrifice should decline?</p>
<p>And as long as we’re talking about what’s fair and who can afford what, the last time I looked, Harvard has an endowment of about $32 billion. They gave out something like $170 million in financial aid last year. That represents about 0.5% of their endowment. If we’re talking about who can afford what, certainly you can acknowledge that by bumping up financial aid to 1% of endowment, Harvard could give all but the truly wealthy full tuition, room, board, books and travel? What’s wrong with Harvard? They can’t sacrifice another half-percent of their endowment?</p>
<p>All-in-all, Harvard does a better job of making their school affordable.</p>
<p>But it is a fact that the folks who make between $160K and $235K or so take it on the chin the hardest. And the pain declined slowly from $235K - up. It’s a “donut hole.” Everyone above and below that income range gets taken care of, really well, either because they have less money and Harvard gives them a ton, or because they have so much money, $60K per year isn’t much of a sacrifice. I don’t blame a poster for complaining at the disparate treatment. The complaints are more than justified.</p>
<p>Hint: It would be more just if it were more necessary. The fact that the rich and powerful (the higher education industry) have conned the middle class and twisted the arm of the government into giving the industry hundreds of billions of dollars indirectly through the mechanism of student loans, only to leave the burden of paying those actual loans on young folks and families in the end leaves something to be desired in the area of justice.</p>
<p>Hat,</p>
<p>“I completely disagree with notjoe regarding college savings accounts…”</p>
<p>I believe I excepted Harvard from my general comment on college-specific savings plans. Harvard’s financial aid policies are truly excellent. Except for a full scholarship at our state flagship, Harvard was my son’s least expensive choice.</p>
<p>But for the poster whose family has $250K per year in income, they’re out of luck. Even at a school with as great a financial aid program as Harvard.</p>
<p>There is a gap in financial aid programs that penalizes folks who do quite well, but are hardly rich.</p>
<p>I make a pretty decent living, but I know my son would be at State U on scholarship if I were asked to pay 25% of my gross income for college tuition for ONE child, and 40% for two. Just couldn’t do it. Just couldn’t justify it.</p>
<p>gibby,</p>
<p>“Geez - I went to BU and my wife to the University of New Mexico and we’re both doing fine.”</p>
<p>I understand. Me, too. My wife, too. Different schools but much the same story.</p>
<p>"If the OP cannot afford the full sticker price at Harvard, then he should take the free ride at UTexas! "</p>
<p>Certainly! However, the poster still has a right to grouse about it. It seems that Harvard is for everyone who can get in… except for folks whose incomes approach around $235K - $250K. Those folks can just send their kids to State U!</p>
<p>Ask yourself the question - you’re spending a bit over 20% of your income for TWO kids in college. Imagine if it were 40%. Ouch.</p>
<p>I’m an international student and my parents make about $150k a year but I was still required to pay $34k a year to attend RIT at first. I’ve only been able to reduce that amount to $30k a year in the past 4 years with a gpa of around 3.4. I guess I’ll need to be around 3.8 ish to get any better.
As for now, my dad, mom and aunt are all chipping in so I can make it through with a masters degree. On the other hand, my two cousins (US citizens), combined, are paying less than what I’m paying, to attend Purdue.</p>