<p>The subsidy existed before. People with no money and no insurance before just went to the emergency room, adding overhead costs to the hospital, which then resulted in higher costs trickling through the system to be borne by everyone else.</p>
<p>True. But that was the sick. Now it’s everyone. And it’s subsidized insurance not health care. Meanwhile, the the ER thing is still happening. But, this is about individual families budgets not the big picture which is still a big unknown. Individual families who can pay more will pay more. They already are and the ACA is barely even enacted. Also, hospital write-offs are not quite the same thing as government subsidies. </p>
<p>We all subsidize others for things we don’t need or want, Flossy. And in any case, employers have been shifting healthcare costs to employees for decades.</p>
<p>Back to the topic at hand–no one making $200K a year is unable to put their kid through college because of increases in their insurance premiums. Now, if they have large uncovered medical expenses, that’s another story…but hopefully those people will be few and far between now.</p>
<p>Can we not bring the ACA debate over here? There’s already an ACA thread where these issues are more than fleshed out. </p>
<p>I was just going to say the same thing, romani.</p>
<p>2018RiceParent must be wrong then. Nevermind. And, sally knows what would have happened without it, of course. lol. I do agree that 200K should be plenty to pay out of savings, income, and some loans. We know a few families who are refinancing their homes to pay for very pricey programs in the arts, no less.</p>
<p>thumper, I think I paid less than $200 a month for music less for 8 years. This woman retired from teaching at a small college and she never raised price ever. She even let me pay every 2 months because I’m too lazy to write check often. She was like a grandmother to my kid and that’s the bonus.
In fact, there was another one that my kid rejected because she was so demanding, even before I hired her. I don’t know how we managed to avoid that one and got a really wonderful teacher in the end. I’ve always thanked my lucky star that I met these wonderful people.</p>
<p>DrGoogle, you are lucky that you found that woman. I had a piano teacher like that as a child (she only had one arm but that’s another story). Unfortunately for some activities there is no affordable “nice grandma-type lady” option. Think hockey, equestrian sports, ballet.</p>
<p>sally, even for the same type of music lesson, in the Bay Area we paid twice as much per month and the young woman kept raise the rate on us. So what if she graduated from Julliard, my kid was too inexperience in playing the instrument that it didn’t matter.
I thought for equestrian sports you have to be like Bill Gates, I thought I’ve read he spent millions for his daughter in Florida.</p>
<p>My DH and I make almost 300k per year. We live in the tri-state area and living expenses are very high. Property taxes of about 12k per year, a mortgage over 3k per month. Grocery bill of about $900 per month. Cell phone bill is $ 300 per month. We own 3 cars and were making payments on all 3 up until this month ( $1400 per month in car payments). Car insurance is about $4k per year. Then add in the gas and electric and other miscellaneous bills. I hardly use cash and put most things on a credit card so we have very large credit card bills every month- usually in the 3 to 4k range ( grocery, clothing, pharmacy, dinners out, gas, etc). We do eat out or order in a few times per week. We rarely take vacations. We had saved over 100k for college but it was wiped out in the 2008 market crash so we had to start saving again. The only way we could afford college tuition for our 2 kids was to refinance our mortgage and take a cash payout using the equity in our home. This will enable us to spend about 25k to 30k per year on tuition per child. Both kids will also take Stafford loans every year.</p>
<p>If I could do it all again I would have started saving for college the day the kids were born. </p>
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Why were you completely wiped out? The stock market dropped around 30% and we are now at all time high. Unless you had to liquidate when the market dropped, you should have recovered all you have lost. </p>
<p>The $ was in DH company stock which dropped significantly. Unfortunately, he had put all our eggs in one basket.</p>
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Well, it got wiped out if you sold at the bottom, but if you “stayed the course” you’d have been fine. Having too high an equity allocation is problematic too close to when you’ll need the money, or if you spook. Expensive tuition perhaps, but a lesson to keep in mind with your retirement money. </p>
<p>People in low or moderate COL areas just do not understand how expensive it can be in a high COL area. </p>
<p>Oops, just saw that you were undiversified. That’s another lesson. </p>
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<p>I am having trouble imagining why you have $300 per month cell phone bill when four unlimited lines can be had for $180 per month (see <a href=“Prepaid Compare”>http://www.cellguru.net/unlimited_compare.htm</a> ) and there are other plans for much less (see <a href=“Prepaid Compare”>http://www.cellguru.net/prepaid_compare.htm</a> and <a href=“Prepaid Data”>http://www.cellguru.net/prepaid_data.htm</a> ).</p>
<p>Also, three cars with car payments implies that all are relatively new and expensive cars. From what I can tell, many high income people do not buy cars that often or choose expensive cars (although some do).</p>
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<p>Even in the expensive areas, the median household income is well below $100,000 per year. Most of those people do get by.</p>
<p>“Property taxes of about 12k per year,”</p>
<p>That equals 1/4 of our annual gross income. </p>
<p>I live in the expensive NYC on around $30k. We hit the jackpot on all the public schools my daughter attended and I believe that NYC was a great place to raise my kid. But now that she’s started college, I am thinking (like many other senior citizens!) of moving to a lower-cost area where life is less complicated. With merit and need-based aid, my daughter’s private college will cost me around $12k/year. I have the money put away and hope that she can finish her undergraduate degree without debt.</p>
<p>But even granting that it may be hard for some families to spend 60K out of an income of 200K, would they be any better off - not as a whole, but in terms of financing that particular college – if they were making any less?</p>
<p>Sometimes these conversations sound as if aid is an all or nothing proposition. But once you get past the income level at which you’re getting a full scholarship, the expected family contribution increase is at least roughly proportional with income until you reach the full payers. If you just miss the aid threshhold, you get nothing, but if you just make it, you don’t get very much either. Is being full pay for a family making 200K more or less of a stretch than paying 30K for a family making 120K?</p>
<p>The difference, it seems to me, isn’t so much that the family getting half aid is actually doing better, as that there’s less incentive for them to choose a cheaper option. If NYU is charging you 30K and SUNY is charging you 25K, you’re probably going to find the extra five thousand and go to NYU. If NYU is charging you 60K and SUNY is charging you 25K, maybe you think long and hard about whether or not NYU is really worth that much more money. But that isn’t an issue of affordability, it is an issue of priorities. </p>
<p>Now, of course, there are options cheaper than 25K as well, but I think there is often more of a qualitative difference between the 25K flagship state school and the directional giving you merit, or the CC + transfer option, than there is between the flagship and the expensive private school. But again, this isn’t an injustice, it is a matter of families assessing value in an intelligent way - although I would add that if that many families at a certain income made the decision not to spend full pay for a private college, they wouldn’t be charging them so much in the first place. </p>
<p>@apprenticeprof, to your question of is it better if the families were making less?:</p>
<p>In our experience, less income didn’t really help. I thought that was the definition of the “donut.” </p>
<p>My understanding that the reason @ucbalumnus chose the $200K number is it is the threshold for FA at the Ivies and other top 20 schools. And it is my understanding that the Ivies, etc are more generous with FA than the other schools. </p>
<p>So since the less elite schools are less generous with aid, that would mean their threshold income for aid would be higher, hence more of the “donut.” I’m not sure if my logic is correct.</p>
<p>None of the BusyKids applied to Ivies, etc. We don’t make anything near the amount under discussion and the local privates did not award us much financial aid, and in some cases, no FA, other than Staffords. So ours all chose merit.</p>
<p>In your example, you are right that the SUNY is less expensive, but it is still going to be “full pay” if you don’t receive any FA. I know that the OP discussion was for an elite school at $60K+/yr and an income of $200K, but for families with less income and who are applying to less expensive schools, it still works out to be the same question as @ucbalumnus asks in the OP:</p>
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<p>So I think you are right to ask:</p>
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<p>From my post above:
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<p>Correction - when I thought about it, the threshold should be “Lower” not higher, as I said above.</p>
<p>However, in actual reality, it must be low such that the average family in the middle, below $200K, in the “donut,” still doesn’t get much FA.</p>