The Upper-Middle Class Has Itself to Blame for Student Debt

[xchrom]

http://www.theatlantic.com/business/archive/2012/08/the-upper-middle-class-has-itself-to-blame-for-student-debt/261010/



When it comes to paying for college, upper-middle-class families often get the worst of all possible worlds. They're not wealthy enough to treat the cost of tuition as an afterthought. They're not needy enough to qualify for big discounts. But they're often status conscious enough to pay whatever's necessary for their kids to attend an elite college.

And so somewhat unsurprisingly, the Wall Street Journal has found that in this age of rising student debt, its risen most of late among the upper-middle class. Between 2007 and 2010, the percentage of households taking out loans to pay for college grew fastest within the group earning between $94,535 and $205,335 a year.

As someone who grew up in what the WSJ would describe as a solidly upper-middle-class family and attended a private university, I'm the first to admit that this is probably not a first-order public policy problem. But the phenomenon does provide a window into why private colleges have been able to raise their tuition at such extraordinary rates over recent years.

In a sense, this is a tragedy of the (university) commons -- the phenomenon where the rational behavior of an individual can create problems when repeated over and over by a group. It's entirely reasonable for well-off families (we're talking about households within the 80th-to-95th percentile here) to try to send their children somewhere with ivy on the walls, even if it means taking out a bit of debt to do it. Researchers have found that, even though it's certainly not the only factor that counts, where you go to college really does seem to matter when it comes to future earnings. By paying up for prestige, parents are doing what's right for their sons and daughters, who may well make back the extra investment over the course of their careers.

[forthemiddle]

1. Not just elite colleges

We are lucky enough to be on the low end of this income group ($94,535 and $205,335 a year), and we also fall into the catch of "not rich enough -by a long shot- to be able to not worry about the cost of tuition, and not poor enough to qualify for any aid, outside unsubsidized loans".

Through very heavy budgeting we have been able to pay for 1/2 of our sons education, and he is responsible for the other half - mainly through student loans, although he provides ALL of his outside expenses (food, entertainment, gas, etc) through his summer job, and working at school. With room and board, and a meal plan his tuition exceeds $17,000 a year at a State school.
He will graduate next spring (Praise the Lord, HA-HA), but will continue to pay for years to come.........

I don't know if there is a happy medium. We want the lower income students to continue to be able to get and education, the upper income student always could get a great education, but it is the middle class families that fall into the not poor enough, not rich enough sink hole.

[seabeyond]

3. i am right there with you only we have not stepped into it yet.

the bummer. i read a study saying after a decade where the kid went to college didnt matter. it only got them in the door. now this article i am reading it does matter. i had just gotten husband past the damn ivy schools (his family are snobs so college matters). then son will need a couple years after the bachelor.

we are talking more creative instead of paying all. student loan and son can have that part of it.

and scholarships. athletic and academic. but.... damnit, needs a higher sat

state UT is at about 25k or a little higher.

[elehhhhna]

74. My daughter got a huge (almost half the cost) scholarship and fin. aide

package from a great private college in Chicago...but we simply can't cover the difference. We actually don't qualify for a parent "PLUS" loan due to some recent financial difficulty - and private loans for parents and students are tighter now -- so she's going to a 2 year jr. college with a campus and dorms, etc., - a very good one, btw., about 80 miles form here.

Here's part of the problem, imo - once the feds grant student aid (most people make too much to qualify for grants now) which is about 55oo in loans for a freshman, you MUST apply for parent loan. MUST. IF you don't qualify, they'll then give your kid an additional 4,000 yr./ in loans.

ALL SCHOOL LOANS, fed and private, are undischargeable in bankruptcy, and the private loans are a ripoff interest-wise. The fed will take your social security to pay them back . Loans to parents are not even writtenoff if the student DIES. It's a huge trap.

[seabeyond]

76. that is sad for your daughter, ahving accomplished and then cant do. but, that is what i am seeing

happening to my oldest. i hope she is good with it. i dont have issue a 2 yr or even the 4 yr by us. and then a good school for law degree. we will have to work it out. we have the money and can pay. hubby has a over 200k sittin in something or other. but he sees it for retirement. i see it as an option, lol. we will see. it is keeping the retirement going and paying for the college.

my youngest i think will be more fine, staying at home even, and going ot the local college. different children.

[HiPointDem]

79. it matters for the connections if you know how to use them.

[elehhhhna]

82. like politics. you can meet the "right" people for 200K

[HiPointDem]

84. pretty much. it's depressing to learn that real life is just like high school.

[lovuian]

83. They can repossess your car and house

but an education ....how do you repossess that one

the issue is that America needs to step up and educate their children
which means giving them affordable colleges

other countries do it and so can we

I think the banks and government is realizing that student loans can not be repossesed

and we don't have debtor prisons

So America capitalists feel they have enslaved us
when in reality we got an education .....on the cheap ..with the dollar that is dying

I think these young people are BRILLIANT and what a score on the banksters and the US GOVERNMENT

they can't repossess your KNOWLEDGE and EDUCATION

you will have that forever ...the US dollar may not survive but your education will

I know the value of education .....do you

if our country allows brain drain then God help us ...we are looking at a dying empire

they think they can buy genius ....soon the doors will close and noone is coming to work in a dying Empire
if their smart

[ananda]

35. Ermm...

A family that makes 300k a year should be able to save for their child's
education without that child having to assume loans. Geez.

Also, many very good schools offer non loan packages, scholarships and deals
for undergrad education. Graduate school is a bit different, though, and that
can get pricey for the name.

[riderinthestorm]

49. Errmm, $300k falls into the wealthy category. Forthemiddle said they're closer to the $90k category

Ie, making too much to qualify for needs based scholarships but struggling to pay for college.

I presume that most of us would agree that someone making $300k should pay their children's college costs but that's not what this convo is about.

[seabeyond]

51. thank you. i did not want to correct and state the obvious. nt

[leveymg]

61. Public college costs need to be contained. There's no one to blame but legislatures for shifting

an increasing percentage of post-secondary costs onto students and their families. That's a way of shifting the overall cost of education downward onto the middle-class, as outlays on State schools are cut.

Sliding-scale tuitions tied to a family's net worth are one excellent approach to this problem. Another is a surtax going to education on upper income tax payers.

[seabeyond]

64. our taxes are going up for our jr college, significantly. state had cut them in budget. a very good

school, and all for paying the extra, but we should not have to.

[smokey nj]

69. I graduated from a shitty state school in Jersey City in 1998. Tuition for my last year was about

$1,500/semester. I commuted to school, so dorm fees and meal plans weren't a concern. For the 2011/2012 year the tuition was over $5,000/semester, excluding dorm fees and meal plan. The cost of my shitty college has more than tripled in the 14 years since I graduated.

http://web.njcu.edu/sites/controller/Uploads/2011-2012_tuition__fees.pdf

[FarCenter]

70. Need-based grants and loans effectively implements a sliding scale tuition.

Keep nominal tution high for those from which it can be extracted, and then "discount" the nominal tuition with grants and subidized loans for those that can't come up with the money.

It maximizes revenues for the university. It's similar to "yield-management" by the airlines.

The solution would be for states to set tuition lower and then control university budgets to prevent overspending on grounds, buildings, athletics, student centers, dorms, arts venues, etc.

My kids lived better at university than they did at home or will ever live again during their careers.

[leveymg]

72. The effective cost of higher education continues to rise faster than anything other than health care

Grants and loans would be an okay approach if the grants kept up with rising student costs, which in many cases they don't. So, middle-class students and families continue to go further into debt or abandon a traditional college education and become bait for private on-line diploma mills.

[forthemiddle]

89. my problem is who decides "needs" based?

My son is 22, so legally an adult, yet because his Dad and I make "too much money" he is not considered needy.

I am more than willing to pay 1/2 his tuition, yet the state doesn't give me an option. Many of his friends are in roughly the same income level as we are, yet, for reasons only they know, they are unwilling to give anything towards their child's education. They are old school, and figure once a child is an adult, they are on their own. Now the child (or adult) suffers. Financial aid rules are so rigid that this child can not say "My parents aren't helping out, give me more". To me that isn't fair. Once they are adults, kids should not have to rely on their parent's for help.

I don't have an answer though. Because, regardless of the reason, our Country is broke. This is outside politics, we can agree on why (Wars, taxes, etc) but as of today, there is no more money to shell out, so what is the solution?

[FarCenter]

92. The US Department of Education decides.

The colleges all use the FAFSA and the data that is collected by it.

http://www.fafsa.ed.gov/

http://www.fafsa.ed.gov/fotw1213/pdf/PdfFafsa12-13.pdf
See section 3, which sets out the criteria for determining whether the parental data in section 4 must be submitted.

[FarCenter]

2. Upper middle class families with this problem have not saved for education

If an upper middle class family lives at the standard of average middle class families, they can pay for their childrens' education.

Keep the car for 10 to 15 years. Don't trade up to the McMansion. Don't install the pool. Don't take the cruises. Don't go to Las Vegas.

[seabeyond]

4. it isnt that simple. for the last 3,4 yrs we have lost about 40%

of our income in one way or another. college has gone up 43%. while saving for retirement, too.

this would be a matter of pitting against each other. there is more to it than the easy, do not put in the pool.

[FarCenter]

10. You have to start when the kid is born

For a baby born this year, saving $20,000 / year for 17 years at 5% return on investment will get you $516K for college, which is about what it will cost for 4 years for a private college.

You may be able to get by with half that for a public college, as well as get some scholarships and grants.

The math is easy. Just use the "future value" function in the spreadsheet program to calculate the future value of an annuity.

Had three kids. One went to an Ivy, one to a pseudo-Ivy, and one went to an excellent state university. Two have graduate degrees.

[seabeyond]

15. sure. isnt that ideal. and the costs of living, saving for retirement, insurance, and wage were

significantly different just a mere handful of years ago.

[FarCenter]

19. The present seems very much like the '70s

Two oil crises, the stock market went nowhere for 10 years, and inflation finally went through the roof.

[riderinthestorm]

33. Tuition at Harvard in 1975 was $2500 per year. That would be @ $10,500 in 2012 dollars

even factoring in inflation.

Except of course Harvard's tuition in 2012 is actually closer to $55,000.

College costs today are nothing, NOTHING, like the 1970s.

[seabeyond]

39. harvard is only 55k? (ya, i know) when smu, perdue, NW are 55K

i would think the Harvard and yale higher. that must be without the dorm, ect...

[riderinthestorm]

41. Yup, that's just tuition, not the rest. nt

[seabeyond]

45. thanks. that sounds more right. not better, lol. just right. nt

[FarCenter]

46. I was reflecting on the stagnation of the economy. You are right that college costs are out of hand.

The only hope that I see is for on-line education to take off and leave the bricks and mortar institutions stewing under their debt load.

A ray of hope is that Amazon has gone into the textbook rental business.

Amazon Joins College Textbook Rental Arena, Students Looking For Deals Turn To Online Options

http://www.huffingtonpost.com/2012/08/08/amazon-textbook-rentals-online-campus-bookrentals_n_1756077.html?utm_hp_ref=college

[seabeyond]

50. my hubby found this article, for used books. this is good.

http://lifeinc.today.msnbc.msn.com/_news/2012/08/08/13106123-for-students-on-a-budget-4-web-sites-offer-cheap-texts?lite&__utma=14933801.1536484884.1342921156.1344481483.1344514474.37&__utmb=14933801.10.10.1344514474&__utmc=14933801&__utmx=-&__utmz=14933801.1344514474.37.3.utmcsr=nbcnews.com|utmccn=(referral)|utmcmd=referral|utmcct=/&__utmv=14933801.|8=Earned%20By=msnbc%7Cbusiness%7Cbottomline=1

[grasswire]

62. Harvard costs nothing for anyone who can get in and is in need.

The endowment is staggering -- so large that Harvard is able to cover the tuition for any student who is accepted but isn't able to pay.

And Harvard is not the only university with that policy.

[seabeyond]

65. if parent makes a certain income. and i am all for this. but.... this income is not gonna get a

free ride.

[riderinthestorm]

77. I only pulled that out as an analogy for rising costs, nothing more. nt

[riderinthestorm]

16. You obviously didn't have anyone in your household with medical issues.

Or you haven't suffered a catastrophic life event like a house fire or other major emergency that decimates your saving ability. My husband's medical condition has meant we must allocate a significant portion of income to ensure he lives. That doesn't mean we haven't saved for our kids' college but saving $40k/year for college is pretty high (I have 2 children) - impossibly high for some on the "low end" of upper middle class. Multiply that times several kids... saving $40k, $60, $80k/year isn't possible.

I'm glad for you and your family that you were fortunate. Most of the rest of us aren't so lucky.

Regardless, NONE of our most talented young people should have to take on this much debt. University should be heavily subsidized by the state as a necessary part of ensuring a country's future prosperity.

[Egalitarian Thug]

34. This poster is always and firmly in the so-called "personal responsibility" corner and when the

situation doesn't fit into the "conservative" fantasy, the reply is invariably "Too bad, so sad. Sucks to be you".

[riderinthestorm]

44. Thanks. Pretty obvious now that we're deep into this thread/convo

I'm really uncomfortable with those ASSumptions. They really are fantasy land.

I don't begrudge anyone their success. I just hate when they assume that everyone else's lives are so fortunate, and that if they weren't it must somehow be their "fault" (like the thread title says. Grrrr)

[Egalitarian Thug]

59. Over my life one of the few things I've consistently found is that those that "make it" are

nearly pathological in their need to discount/deny the enormous role that luck played in their lives. The more successful, the more adamant they are that their accomplishment are entirely due to their imagined superiority to those that aren't.

The single most important factor in success is birth into "the lucky sperm club". That's just a fact, well documented for centuries. Those few that do manage to rise above their station at birth are also invariably the recipients of great good fortune, patronage, picking the right major at the right time, marrying into the right family, walking through the door at the right time, overhearing the right conversation, etc.

Ironically, my personal experience has been that the people most likely to acknowledge their luck are those born into the super-wealthy, but they are still a tiny minority of a tiny minority.

[FarCenter]

68. Without foresight, planning, and setting of priorities, you're unlikely to get lucky.

A baby born today will cost about $500 k to raise and educate. So plan ahead before you stop the birth control.

[riderinthestorm]

78. Or when the child is 12 you can get cancer and face $200k in medical bills

with insurance (an 80/20 plan without RX coverage, travel expenses to hospitals etc.).

So you have 12 and 5 year old children and you suddenly have no savings anymore. At all. Its either use the savings to stay alive or save them for your children's college? Really?

Jeez, you do know that sometimes LIFE gets in the way of the best laid plans? We had a barn struck by lightening - the cost to repair was staggering. Our liability coverage paid some but we had to cover the rest. That barn is our primary business - it wasn't as though we could NOT fix it - it was imperative to continue on with our business.

People lose their jobs, or get salary decreases, or furlough days. Ever heard of that? Or a parent becomes terribly ill and your savings get tapped to provide them end of life care. My neighbor was in a terrible car accident. She and her 14 year old son spent months in the hospitals and rehab. It took everything they owned, including their house, to recover physically. She's a widow so there wasn't anyone to keep working and keep things going. How do you plan for a catastrophic car accident? Her spouse's life insurance (see they DID plan ahead), kept them in recovery but nothing more. His life insurance that was supposed to cover their son's college costs were eaten up in medical bills.

Your "compassion" is really short sighted.

[riderinthestorm]

81. I admit to being pretty flabbergasted at the willful and deliberate avoidance

in discussing how the vagaries of life will impact a person's finances.

Its just so simple - lay out the plan at the beginning and voila! It happens exactly according to that design. Life's tragedies are no obstacle.

LOL, in my experience, only those with significant family financial resources ("the lucky sperm club&quot have the capability to ensure that happens.

Unbelievable, on this thread alone.

[PassingFair]

25. When the "baby was born", we weren't EARNING "middle class" wages.

Hard to save $20,000 a year when you MAKE $30,000 a year.

[TwilightGardener]

27. Exactly, thank you. What you earn when your child is a college freshman is probably much more

than what you earned when he was a baby.

[FarCenter]

36. Wages go up due to inflation, promotion or job changes.

Inflation doesn't count, since college costs are going up faster than inflation. A $100 K salary now goes to about $140 K in 17 years at 2% inflation. On the other hand, that $120 K public university degree will go up to at least $250 K in the same time frame.

So to anticipate a higher salary when the baby is ready for college, you have to have a concrete plan to get promoted to a job with a higher salary or to change jobs to one with a higher salary.

Most of the increase in salary during my career was due to inflation.

[TwilightGardener]

42. Yeah, I'm sure everyone has a "concrete plan" to make shitloads more money every year as they

get older. Sometimes that concrete just never sets, ya know?

[seabeyond]

47. plus, wages are NOT going up and they are NOT adjusting to inflation. further wages are

decreasing.

[TwilightGardener]

48. Yes. Thank you.

[GreenPartyVoter]

29. Yes indeed! Or even $50k a year.

[riderinthestorm]

6. Really? Do you think you could save $120,000 for each child in your family?

Lets say you only have 2 children so you have to have saved a quarter of a million bucks in 18 years, PLUS paying for all the rest. Even as inflation has eaten into your salary to say nothing of wage stagnation. And the cost of living has increased etc. etc.

Its pretty easy to slam people without having walked a mile in their shoes.

Why can't we blame those who have shifted this much burden onto our best and brightest young minds? Why can't the real conversation be about why we don't subsidize higher education for our country's future (like virtually every other industrialized country on the planet)?

[seabeyond]

9. exactly. i told sons, work ass off, do what you are suppose to and we pay. now.... son did what

he was suppose to. has universities across the country contacting him since sophomore. all these wonderful universities. fun and exciting and 55k a year. with the law school after we are talking about 1/3 to 1/2 a million.

bad me....

fuck me.

[riderinthestorm]

11. My kids have always known they have to work and they would have student loans

because we could never afford to pay all of it. We told them we'd pay 2/3rds but they were responsible for their portion - either through work, loans or scholarships.

My older girl ended up with a master's degree and only $22k in debt while going to top "ivy league" schools. She got excellent scholarships but she worked 20+ hours/week while in school. It also helped that she finished her undergrad in 3 years and did her masters in a year which dramatically lowered her total bill but that hasn't helped her find a job in her field now. The economy has crushed her industry so even that much debt looms as a big problem.

There are no easy answers seabeyond and I grieve for our bright kids who are ambitious and talented yet are going to be hit with whopping bills at the end of their university training. It should never have ended up like this for them.

[seabeyond]

20. you are so right on. at least, my kids are young enough we are saying, not what you want to do

but, you have to look at our country and see what is going to be available when you get out of college and if it is a position that is going to stick around.

we are working on that. take all the dual credits you can in highschool. he has done wonderful.

i am much more pragmatic than hubby. it has taken a couple years to work him from us paying, .... son does not but succeed, and ivy school, to exactly what you are talking about with your daughter.

it is not all bad.

i tell the kids, we had it easy for a while. the nation is different and we have to adapt. i do not think it will ever be what it is. so the kids have to play it smart. i do not think it hurts a kid to work. i do not think a kid needs to go to a Harvard. it is good for my oldest to have to consider this.

now he is thinking about sat score for scholarships. and continuing with his running for scholarship. ect.... having to be a part of ownership in his future.

it was really funny the other day when i told him. wouldnt hurt for you to get a 7-10k student loan and have to pay back when you get out. and we pick up the rest. his eyes got HUGE. so cute.

i could send them to a perfectly good university here in our area. they could live here, on campus or even rent cheaply. but.... this oldest wants to get out of town, on his own and being approached by major universities.

i am worried for the kids with exactly what is happening to your oldest.

[FarCenter]

12. Forthemiddle gave an income range of "($94,535 and $205,335 a year)"

If your income is $150,000/year, you should be able to save $120,000 in 17 years for each child, assuming not more than 4 kids.

[TwilightGardener]

17. How many people make 150,000 for 17 or more years, consistently--even through their

childbearing years? Probably not many.

[seabeyond]

22. exactly. and that is another good point. and how about 100k. i could grab from retirement

piece of cake.

i told son the other night. your choice. help with the college one way or another (options. where, loans, part time job, sport) or take care of us when we are old. your choice, lol.

[TwilightGardener]

26. My son is leaving this week to start his freshman year (just plain ol' State U)-

he's got GI Bill money from my husband's military service for his first two years (my other son will also get two years--they are splitting it evenly), but the rest is largely up to them--meaning loans or jobs. We just don't have the savings to foot the entire bill for their last two years. We will try to help (books, etc.) but they know they're going to have to come up with most of it. I don't feel too bad about it--my parents didn't give me a DIME for college, and I eventually paid off loans for two degrees. (Husband also eventually paid off HIS loans.) Took a long time, wasn't fun--but I felt it was my burden to bear, not my parents'. The point I was making above is that income fluctuates for most families, from year to year--you might start off making $30-$40,000 when your kid is born, and your first few years are paycheck to paycheck. Mom might take off a few years to stay home, and there you've lost income. Emergencies happen that wipe out your savings. Life isn't a simple math formula like FarCenter suggests.

[seabeyond]

28. the end of your paragraph... i agree.

i think the problem in our house, is my hubby's parents did pay all college cost and hubby saw it as his job. and now, he is talking to other parents and seeing, not many did or are able to do, what his parents did. so i am thrilled he is more flexible on this issue. i have tried talking it earlier. when son started high school. it is just recently hubby has really put thought into the huge cost.

but you are right on. it is not an easy mathematical formula.

[patrice]

54. That's the other piece of this. The group we're talking about doesn't want their kids working

through college, because that'd be a embarrassing to them.

My daughter worked all of the way through. We helped. She got scholarships and grants. After paying her dues in cubicle-world, she is school debt free now, has her own successful business in her own home, doing what she loves. Not rich, but definitely in control of her own life, which she made pretty clear from the time when she was about 2 years old, was always her objective to begin with.

[seabeyond]

55. you may be right. but i started working at 12 in fathers business. i think it is an excellent idea

and a must that a kid works. again, hubby more into that, .... parent take care off. i am demanding.... get a damn job, lol. son got one finally this spring. it has been of such value to the kid in org, responsibility, ect... confidence builder, looking at future.

i was right.

[patrice]

63. Even just a little job, perhaps with plenty of public contact, is good, but too many hours isn't goo

d.

[seabeyond]

66. he got a job at hastings coffee shop. books, customers. it is perfect. and he is well

thought of by management. if the town he is going into has a hasting, he is set with a part time.

the challenge is, with school, two practice a day with sport, meets.... not a lot of extra time. but that makes prioritizing important. and yes, stock up on hours in summer. drastically cut (he has no choice) during school year.

i hear ya.

[forthemiddle]

18. our income is not $150,000 a year.

The article gave out that range ($94,535 - $205,335) and my reply stated that we were at the LOWER end of that range.

I am in no means pleading poverty, I was merely stating that being in that range does not mean a family does not struggle to put their children through school.
I was stating that because we were in that range (again, at the lower end of it) our family does worry about the costs, yet because of it, our son does not qualify for any aid outside the unsubsidized loans (which we are grateful for).

[riderinthestorm]

21. That's if they go to a state school, college costs never rise,

your family never has expensive medical issues or a catastrophic life event that eats into those savings, you always get pay raises (and never pay cuts or a lay off - how many people average $150k for 20+ years????)....

You make a lot of ASSumptions about other people and their (in)ability to save....

Some of us are living extremely frugally - averaging $20k per year in real living expenses after putting money into savings, medical expenses, mortgage etc. (and that's taking ONE family vacation in 25 years) - and we're still never going to be able to cover all of our children's college costs even as we may be classified as "high middle class" income earners.

And more than a few people lost a ton of money in the 2008 crash. While that money may have now finally reached its previous levels, you've essentially lost 5 years of growth which is irreplaceable.

[seabeyond]

23. also, i had grandparents on both sides say they were putting money into a program for kids college

so, even though we were going to do a state university program i was told they were doing and it would be covered. guess what? 5 yrs ago, i find that did not happen. one set started late. may cover one year. but, we do not even count that until we know what it is. the other, i am assuming just dropped the ball. in family dynamics, certain things are not brought up. i do not want to hurt feelers. suck it up. there goes the when born.


so many unknowns come into effect.

[forthemiddle]

14. Thanks for the broad brush

Although we do have a 4 year old car (which we did buy "almost" new), it replaced a 10 year old car. We also have a 1994 pick up truck.

We don't have a McMansion, but instead a 40 year old ranch that is valued at about $125,000 that we will have paid off in the next 10 years (we have lived here for 15 years).

We certainly don't have a pool, nor do we take cruises. But I will give you the Las Vegas trip. We did go there 3 years ago, and I will admit to taking at least one driving vacation a year. We usually travel on that trip about 2,500 miles. Sorry about that. We are huge craft beer fans, and we have been taking microbrewery tours for the past few years. We start in one city, hit a two or three brewerys a day, -never more than one beer per place if we are driving.

We are able to pay our half with out loans, but we feel that it is our sons responsibility to pay at least 1/2, and because of the inflated price of tuition, he must take out partial loans for that. As I said, he works every summer, and works part time during the school year at the front desk.

Oh, also, as for saving. We started a mutual fund when he was a small child for that purpose, and during the month that his first tuition bill was due (October, 2008) the stock market CRASHED. We were very stupid, and financially illiterate because we did not take the money out sooner, but to tell the truth we never thought of it. That is 100% our fault, and I will not blame anyone but us for that.

[seabeyond]

24. i kick your ass. we didnt go on a driving vacation this year.

we did however, the last three years. but but but, they were hubby families reunion and we had to.

ok, we had fun.

i refuse to fly. so we have to drive and hotels... ya, i am a snob and very particular.

[forthemiddle]

32. according to some, maybe we should be camping out instead

The one thing I hate about forums (any of them, not this one in particular) is some members want to pit one member against the other. In this case it is money, or ability to go on vacations for goodness sakes.

I am very careful to state that we are grateful for our income, and ability to send our son to college, but apparently I make to much money to be able to complain about it.

Good luck to you and your family as you are just starting out on the next faze of life (college age children). Please know that although it will probably kill you the first couple of months on missing them, within a year or two, you will also be counting the days until they return to school when they are home for summer vacation. HA HA, that's where we are now, it is 11 days until he leaves again, and although I will miss him, I look forward to getting my house back!!!!!!

Empty nesting isn't nearly as bad as I thought it would be!!!!!

[riderinthestorm]

40. The REAL conversation is why we have allowed this system of student loans to balloon

in the first place.

This isn't the "fault" of middle class wage earners! Here we are - pitted against each other trying to defend how we are struggling to pay our fair share. The thread title makes me crazy.

When the real conversation is why have college costs escalated this much, this fast. And why has the student loan situation been allowed to become this boondoggle. Even more importantly why haven't we addressed the real issue - which is that bright students should be ENCOURAGED to get higher education and we should be subsidizing that as a nation to ensure our future national growth and security.

[forthemiddle]

52. how do you decide who the "bright" students are?

You can't really use class ratings, in my son's class there were 10 kids competing for the top spot, with two of them taking "Chef Class" types students, while others were taking AP Courses. My son made honor roll every single semester during high school, qualified for National Honor Society, and took 12 credits worth of AP courses, yet he was still only in the top 20% of his class.

Another problem is having true need scholarships. I am in no way saying that we shouldn't have scholarships based on need, it is the fact that they automatically base need on the parents income. I don't think my son should have gotten any, because we agreed to pay 1/2 of his schooling, but many of his friends that had parents that absolutely refused to pay anything, but because of the parents income the kids still can't go to school. Even loans are based on the assumption that the parents are paying a portion of the tuition. In my experience that isn't usually the case.

How do we get to a point that we subsidize the "bright students" but not leave out the above average, but not quite there students? And why do we assume, as a whole (not you) that middle class parents are paying for their kids education?

[riderinthestorm]

57. I believe anyone who can get into college should have the majority of their tuition subsidized.

We can quibble over whether that subsidy should apply only to state schools or include private colleges. But bottom line, I believe college should be subsidized for anyone who can get in, to the tune of 75 - 100% like virtually all other industrialized countries.

I'm Irish and university tuition there is almost 100% subsidized. Doesn't matter if you go to Cork or Trinity. If you are/were smart enough to get accepted, your tuition is covered.

[forthemiddle]

85. Great answer

It is a difficult position that we are in though. I don't know how we get to there, from here?
I am one of the lucky ones that can subsidize my own son's college education, but it isn't easy, and I just personally know too many parents, even within the same income bracket as us, that aren't willing to help out their own kids? I refuse to question their reasons, but should we be subsidizing all, or only the ones that parents don't want to help?
I will tell you, if the Country did it for me, it would be awful tempting to allow them too, even though I can theoretically afford to not take the help.
My son is 22, so an adult, but I am still supporting him, in my own way. Should that be mandated though? I am not sure of that answer.

[seabeyond]

53. exactly. sons just wandered in. i was telling him about this conversation and read the title

to him and said.... wait

not the issue, lol

[seabeyond]

43. i am afraid of bears. i like showers, my bad. lol.

i love your post. so funny, funny. i dont believe in doing empty nest, stuff. lol. and kids are good and easy. i am older. have a life. thrilled they get to have their life. i am sure a little. the loss of that energy. i have thought about them gone. but, we get to adjust with high school.... the more they are out of house with job, gf, friends, ect.... i hear ya. and i too, am counting days, lol, for back to school. kids are easy too. in ways summer is much easier than school year. dont have to ride their ass about grades, ect....

thanks

[forthemiddle]

86. I was really young when my son was born

I married my high school sweetheart when I was only 19 years old. I had my one, and only child at 21, so I was quite young. I am only in my mid 40's now.

I did the poverty thing when we were first married (we only made $11,500 combined that first year), so we have struggled. Through hard work, and perserverance we have improved our lot (as I said in my first post), so now we are finally able to enjoy the things we couldn't when we were first married. I refuse to not have a hotel room on vacation with a hot shower. LOL.

But even being an empty nester now, I am having the time of my life. It is amazing when you realize after 25 years of marriage, raising a child, struggling, etc. I have realized that I really LIKE my husband!!!! We are having a blast together, and I am still as happy, or happier than when I married him 25 years ago!!!!

I tell my son now, when looking for a lifetime mate, look for your best friend, and not the lust. You can never go wrong!!!

[seabeyond]

87. i love your post.

(i was going ot welcome you to du, but i see you have been here from the beginning, lol, just do not post a lot. )

and i was the opposite. i was 32 when i got married and had a lot of time to play. so this has just been a different kind of play. the other is, been there, done that. cool the way it works. maybe it is more, the people that are content in life.

i am always thrilled to hear people that are still going strong in their marriage. it feels good. right there with you

[forthemiddle]

90. Thanks for the belated Welcome

The system says I signed up in the beginning, but I honestly don't remember doing so.

I tried to sign up during the Wisconsin Walker recall (I am from Wisconsin), but DU said I already had an account opened, so I requested the password, and went from there. My husband may have signed up back when, but I honestly don't know, neither of us remember doing so.

I have been reading almost daily for years, but to tell the truth I am not a "me too" poster. I find others say exactly what I want to say, only so much better, that I tend to just nod in agreement at home, but never post. The Wisconsin recall is something I felt I could give my own personal reflections on, because to tell the truth, the majority of posters here were commenting from the liberal hot spots of Madison, or Milwaukee. In my opinion they weren't always giving the true "feel" of the ground. I live in Mid Wisconsin which is much more purple to red, and I was hearing on the ground that the every day citizen was not thrilled with the idea of recalling a Governor that did nothing illegal. That does not by any way mean that they were happy with Walker, they just didn't think that he deserved to be thrown out of office before the end of their term.

This was once again a subject that I felt I had something to say that hadn't been said yet, so I contributed.

So once again, Thanks for the welcome. Don't however feel slighted if I don't comment again for months. That is just the type of poster I will always be. Too bad, on this site, my low post count will always be looked at with skepticism, because I honestly can not think I will EVER get to the 1,000 post mark. Thankfully I have thick skin, and don't let that bother me. HA HA.

[seabeyond]

91. does not by any way mean that they were happy with Walker

i was just sure he would be kicked out. good to hear your reasoning. it makes sense.

sheeeit, i am still called a troll and puppet and many other things and well, you see how many posts i have, lol

[Occulus]

30. As usual, your "centrist" assumption doesn't hold water for most...

[riderinthestorm]

5. Costs for 2012 at the University of Illinois, a public state school for in-state undergrads is $30k

So the upper middle class family can pay $30k for a public college, or they can pay that $30k to a private university and their child can get some subsidized scholarships and loans to make up the rest for the ivy league education.

Which do you think the average family will select? If you are already paying out a fortune, why not go that extra notch and get the ivy league education?

Beyond all that is the larger question: why the hell don't we pay for higher education for our best and brightest young minds like every other civilized country on the planet that recognizes and values the contributions this will make for the country's very best future prospects??

[FarCenter]

13. Scholarships for the best and the brightest have been deemphasized

Need-based grants are used (as described in the article of the OP) in order to maximize the total revenues collected by the university.

This is done under the guise of furthering social equality and fair economic opportunity.

But it penalizes thrifty parents who save to fund their children's education.

[GoCubsGo]

7. Yes, but I think the cause may actually lie elsewhere.

The people in this income bracket strongly tend to vote GOP. And, as we all know, the GOP are the ones who have been steadily cutting state and federal funding for higher education, causing tuition rates to explode. They're also the ones who turned the college loan over to private banking all those years ago, essentially everyone to the wolves, including the upper middle class. Even tuition, books, room & board and fees at state schools are prohibitively expensive now. And, if you haven't been saving, or if you have more than one kid in college, even those making $200 K/yr will have a hard time. Never mind the laptops and other shit college students are required to have these days.

[coalition_unwilling]

8. Any doubt that we are now largely a mandarin (as opposed to meritocratic)

society should be removed by the evidence you cite. I would even wager that families in California will take on massive debt to fund their kids' matriculation at the UC system, as opposed to the less-well-heeled (but also less expensive) CSU or community college system.

[patrice]

38. 1+ I think most of the kids just want to get away, so they don't DRIVE this process.

[SickOfTheOnePct]

31. Oldest daughter leaves for freshman year this week

She's going to a well respected out-of-state state university, and God willing, we'll be able to get through to her bachelor's degree with no loans. We bought a pre-paid state tuition plan when she was born (paid $6,500 over 5 years), and it will pay about $6,200/year towards tuition and fees. She earned $10,000/year in an academic out-of-state recruiting scholarship (has to maintain a 3.0 cumulative to renew), and we had enough in a separate 529 plan to put $3000 towards first semester and pay for her laptop. I've cut back on what I put towards "emergency" savings, and retirement to be able to put $500/month in the 529, so that every semester I can have them send the university $3000. Finally, the university offers a monthly payment plan that pulls money out of my checking account in 10 monthly installments, and since I was already paying for Catholic high school, this is about $150/month more than I'm already used to paying.

We were lucky, in that when we were still married, we lived below our means so that we could save for college for the two girls, but I know that most people aren't in that position. Like seabeyond, we always told our girls to work hard, get good grades, and we would take care of college. I can't imagine if we had to take out loans for the whole thing...we'd be paying well into our retirments.

[seabeyond]

56. ya, but....

what should be going to retirement goes to college now a days. that is the issue in our house. i can say, yea, we can pay for the college. my hubby is saying, i want to retire, lol. sigh.

i like the different choices given in your post. i have been becoming more informed to see different options. that makes it less scary.

the real bummer. i had grandparent tell me he was setting up that early pay college. and i didnt get back to him on that. we could have done it. i wanted to do it. and this parent has ALWAYS been responsible and trust worthy, so for a decade i thought it was being done.

that ship sailed.

[patrice]

37. "doing what's right for their sons and daughters"?? IF "right" is defined solely as bigger paychecks

What if "right" were defined as something different?

Like:
To discover and develop their own special skills, traits, aptitudes, and talents to their fullest.
To learn more about others who are different from themselves.
To become more intimately acquainted with the histories, cultures, and artifacts of humanity.
To learn more about how to be more independent of family and friends.
To learn more about how to govern one's self in all things.
To learn more about how to be happy.

The ivy league doesn't have a monopoly on any of that.

I used to teach high school seniors. All year long there was this STATUS bullshit about who was going to what university, driven mostly by parents and treating anyone who wasn't in that set as ir-relevant.

I tried sometimes to tell them that bigger-paychecks aren't the best, happiest, motivators out there. I usually put a directory of this country's intentional communities on my desk in the spring and sometimes mentioned how one of the most serene, most brilliant, most friendly of my under-grad professors said that a wide and deep reading habit was more valuable than a college education.

Review the last couple of decades; most of them did not listen to me.

[seabeyond]

58. i like the way you think. i believe, too. nt

[We are Devo]

60. Glad I didn't have kids!

Best decision I ever made. Too damn expensive!

[seabeyond]

67. ah, but the entertainment factor. lol. nt

[We are Devo]

88. My dog is plenty entertaining! n/t

[exboyfil]

71. I only recently got a promotion

that brought our family income to six figures. The last four years I have been putting our annual bonus and tax return into funding our state 529 to the maximum tax deduction limit of $10K/yr. It is a good deal since it is 9% off state taxes (the tax free earnings are meaningless in this market and I have already moved to money market for both kids - H.S. graduation 2014 and 2016 - I do not gamble with tuition dollars). I hope to keep it up until we need to replace a car.

I am using the 529 to fund my older daughters college classes while she is in High School (these are courses with High School "equivalents" so the school will not pay for them). Our state has PSEO which will pay for college classes up to 11 hours/semester plus one college class at the High School which applies (AP classes are pretty useless for her major and selected school). She is a dead lock for graduating in three years with this approach and possible 2 to 2 1/2 years (hard to do because some key courses not offered up here). Also summer classes are not covered. The approach is also easier than taking the Honors/AP grind her Junior and Senior year. Total expenditure of about $6K and she will have 55 hours usable for engineering (total college hours of 66). A year at Iowa is projected to cost $18K over living at home (tuition, room, differential in board, books, and transportation). That amouts to $562/credit versus $109/credit. Graduating a year early probably means another $20-30K when you net out her first year salary versus her greater expenses working versus going to college.

I don't see my older daughter needing to borrow to fund college. I am hoping she can get some intern sessions locally as well (good chance being a Computer Engineer). Even borrowing $20-$30K for an engineering degree is not out of reason (I borrowed $7400 for mine in 1984 and serviced it in less than five years). She will not have a car in college unless she needs one for her internships - that is an immediate cost savings. She will be going to our state university.

The younger one was planning on going to the local university and then off to medical school. She is rethinking some plans right now (possibly going to the flagship university like her sister). She will have to borrow for medical school - no other choice. She can't do the mad rush through college like her sister because of the need to preserve a 4.0 (my older daughter can take a few GPA hits and still be highly employable).

$72K is a lot of money for a B.S. degree. Anything you can do to reduce that amount will help in the long term. Servicing such a debt on a $30K/yr salary is hard. I can't imagine any middle class people going to colleges where the cost is double that amount. I am projecting absolutely no assistance for my older daughter, but she probably can get some merit aid as a female Computer Engineer (they are rarer than unicorns so to speak and she does really well in her classes).

[David__77]

73. "upper-middle-class families often get the worst of all possible worlds?!?!?" oh my.....

Whoever strung that sequence of words together is obviously living in la-la land.

[HiPointDem]

80. last week's article was: 'why it's impossible to live in nyc on $250K/year'

[NJCher]

75. cats, not kids, I say

That's one reason I never had any (kids).

Cats are curious and self-motivated. They don't need teachers.



The worst might be a $9.99 pair of glasses from the local drugstore.


Cher