<p>be able to afford a 45k a year college. I know there are plenty of other factors such as savings, assets, etc., but do you think it is reasonable for a family that makes 165k to afford 45k. I just want to hear your thoughts.</p>
<p>It depends on where you live.</p>
<p>Connecticut</p>
<p>I would think so as that income level puts the household in the top couple percent nationally. Families with 1/3 that annual income can have EFCs that are half or more. But the question is being asked in a void as you well know as it does not put perspective on “how” that 3 digit income is spent. It could be consumed quite easily by large mortgages from houses, vacation homes, new vehicles, retirement account contributions and other lifestyle choices that precluded saving for colleges or annual cash flow. There’s an old saying that the more money one makes, the more one spends. Saving for retirement and saving for college educations takes financial restraint.</p>
<p>I could do it easily on that income. However, that is because I don’t make anywhere near that amount. If I did, I suppose I’d have a hard time parting with the money. </p>
<p>The more shelves we have, the more stuff we buy to put on 'em. That seems to be the way it is. I have a lot more than the homeless people I pass on my lunchtime walks, but I struggle with feeling “poor” compared to my best friend. </p>
<p>As for your question, though, if it is prompted by a calculated EFC - all I can say is that it is what it is. Your job is to figure out whether or not you feel comfortable taking that on as a family. There is no right or wrong answer.</p>
<p>I guess it would depend on how long you’ve been making that and what you have saved…but probably could “afford” it if you stop taking vacations, eating out, put off buying a new car, take out loans. I don’t think it’s easy for a family earning $165 (and take into consideration fed and CT taxes) to pay $45,00/yr.</p>
<p>BTW, our family of 5 could easily do $45,000 on that income given that we do $25,000 for one on significantly less income LOL with a Stafford loan, old cars and we do get to “eat out” every now and then! Ask your parents what they planned for if you haven’t already. I’m assuming they know where you’ve applied and can give perspective better than all of us “guessing.”</p>
<p>Need-based aid is not out of the question for that income and size of family.</p>
<p>This is something the FAMILY needs to decide. Some families would decide that they could afford $45K annually of tuition, and others might decide they cannot. </p>
<p>What will the EFC be on the FAFSA? Run your numbers through an EFC calculator and see.</p>
<p>Re: need based aid not being “out of the question”, that would only be true at the very few HIGHLY competitive colleges (the ones that accept about 10% of applicants) that have generous financial aid policies and huge endowments. It would not likely be true at most of the 3000 or so colleges in this country.</p>
<p>Bosox…if you are a student…you should have this conversation with your family. Only YOUR family can determine if THEY really can make that financial obligation.</p>
<p>Think of it this way…it’s like asking if your family can afford a cruise around the world. No one can answer that question but YOUR family.</p>
<p>As Thumper says, that question can only be answered by the family. There are families who make twice that who have every dollar earmarked to a fixed expense and cannot afford anything towards college without making some drastic changes in lifestyle. </p>
<p>On a personal basis, I am saddled with an expensive house that is taking a good part of our income. Had I gone into something less expensive or been able to sell my home in the last year or so, or in the next year or so, I would have a lot more free $s than I currently have. It all depends on where the income is committed and how difficult it is to get out of those commitments. </p>
<p>I have known families who have been able to live debt free and accumulate a nice nest egg on much, much less. They live on a fraction of that amount. If you have every dollar already earmarked to a commitment, college is going to be impossible to budget in there without something giving way or loans.</p>
<p>For the OP and kids reading, cpt is trying to illustrate a very good point. As adults pass through life they make decisions that have impact far down the road. As an illustration, we have many “families of 5” as friends. We all had “nice” homes when we were young, double incomes, no kids and as the kids came, the homes got alittle bit tight. Some friends jumped up into bigger homes starting new mortgages and a few of us hung tight. We are all in the same place, now, with kids leaving the nest but our disposable incomes are very different depending on those decisions that were made twenty years ago. The economy has changed and while our friends may have planned on selling and down-sizing cannot do that right now when they might have originally planned on it. Same for how families saved: some bought IRAs or annuities, some bought bonds, some bought mutual funds, some bought real estate, some bought stocks, some diversified, some used only 401Ks…we all might have had ideas about how those savings would be in 20 years, but the outcomes of each individual decision can be wildly different and we are all in different positions today because of those decisions. If your parents say “no” they can’t afford the $45,000 it is not necessarily because they made bad decisions it could just be the outcome of old decisions that did not pan out the way that was originally planned with good intent. I say this because simply knowing how much money your parents make (income) does not give a total picture of what the cash flow day to day or month to month or liquidity (how quickly they can convert to cash) might be. The big picture is often complex and I don’t think this is something that many parents particularly share day to day with their young adult children. Often the “college” process is the first time that these kinds of discussion are had between parents and their kids. It’s a milestone for parents, too!</p>
<p>We have a similar base income and we are planning to spend $50,000 a year on tuition if needed (still waiting for admission results) for our two kids. But most of it will come out of savings. Both my H and I think of college as a high priority expense so we have been saving and investing for college since the kids were born. As others have mentioned, we didn’t buy a big house in the country or expensive cars along the way. We have also been fortunate not to experience medical problems or job losses. When the kids move out to go to college we are also planning to downsize to a smaller house or condo so that should free up more of our income also. Neither of us like keeping up the house and the yard.</p>
<p><<a cruise=“” around=“” the=“” world=“”>> </a></p><a cruise=“” around=“” the=“” world=“”>
<p>Oh my, that’s my fantasy vacation! and trust me, what I will have spent to pay for my son’s education would have put me at sea for many months, or it could have paid off my house, or it could have bought me a new car and whole lotta house upgrades.</p>
<p>But no, I scrimped and saved (never earning nearly 165K, more like 25-40% of that over the past ten years) and my son and I built up enough money for me to pay my efc without borrowing. He’s taking on all the perkins and subsidized stafford loans he is awarded and working to earn his work study money.</p>
<p>Nobody can say what your family can afford, but the planning process to pay for college hopefully started long ago when the 3 children in your family were very little or as soon as there was any extra income. If you were going on nice vacations and driving new cars, then perhaps that is how your parents chose to spend any extra money they may have had.</p>
<p>VERY few people can pay their EFC out of ONLY current income.</p>
</a>
<p>A family whose income is $165K is taxed on that income and so may be handing over $40K per year to the gov’t. So in reality, you are taking $45K away from an income of $125K. So the question is, can that family live on $80K year? Yes it is possible, but it depends on what their actual expenses are. You are talking a little more than $6K per month. If mortgage, gas, electric, property taxes, home maintenace and insurance all add up to close to $4K per month (and it easily can in the tri-state area), you can see there is not much more to live on if you want cars, clothing, gas, cable, and an occassional dinner out. It rules out luxuries like vacations for sure and does not leave much to put away in case of any emergency expense.</p>
<p>I would not feel comfortable making that commitment from income alone without having money in savings.</p>
<p>Correct uskoolfish, the assumption is that college is not paid for out of current income alone. That is every institution’s assumption, the problem is that some families (not necessarily the OPs family, we don’t know what their assumption is) did not make that assumption and now need to figure out the finances in the middle of another economic upheaval. There have been at least 5 recession periods since I graduated from high school and I had my kids late in life to boot plus the drilling we got from depression era parents. Many parents’ college age kids now may have only known as adults the go-go-go years and not have experienced the no-no-no and slow-slow-slow years and had financial expecations that just didn’t pan out. In some ways the oldster parents are more fortunate because of the bumps in the early years made us alittle more cautious I think. My girlfriend bought her first house at around a 20% interest rate, that alone will put the financial fear of G*d into you. Old parents might remember the year the Dow went over 1,000. Huge perspective difference between “young parents” and “old parents.” and yet we all have kids the same age.</p>
<p>easily…unless you are living beyond your means…one silver lining from this economic crisis is that hopefully people will realize the importance of saving.</p>
<p>Easy- do they have almost $4,000 left over every month now? or can $4,000 be trimmed from expenses?</p>
<p>my family makes a similar amount and our EFC is >60000. After taxes we have about $12k per month. with no college savings, my parents figured we can afford only $25-30k per year, about half the EFC. So in response, it is not easy if it is attempted from yearly income as my parents are figuring out. However, if there are savings then it is doable.</p>
<p>The way we do it is by dividing up the cost. Some from our savings, some from our son’s. Some from our income, he has to work too. We borrow some as does he. Also some merit money from the school and an outside scholarship.</p>
<p>mumurthigal…not sure how your family pays less than $20K a year in taxes on $165K/ income…that’s why these numbers are hard to project for someone else. </p>
<p>In the end, even if money had been saved, many funds (college, savings and retirement) have beeen greatly reduced due to the current economic climate. I would be afraid to make a commitment to pay full fare for a private college out of current income.</p>