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Because it's absolutely the norm for higher-income professional parents to pay for their kids' tuition.

I just assume that I will pay for my kids' undergrad. It's the norm where I live.

Is it? I graduated two years ago, and this is of course anecdotal, but the only kids I knew that actually got their tuition paid for had trust funds, didn't pay for anything themselves, and had never held any kind of job.

How do you imagine you're going to be able to even as a likely relatively well-paid individual, if tuition rates keep climbing?

I'm in Canada. When I went to University 1991-1996, tuition + books + etc., but not board at a top Canadian engineering school was $2500 per year. These days it's about $14500.

My wife and I currently pay about $25000 / year for daycare for two kids. Can't save too long for daycare, but can for Uni. We have minimal debt, and the house will be paid off by the time the kids go to University.

EDIT> Daycare is as expensive as University. I did not anticipate this.

> $14500

This seems rather steep and definitely not the norm at Canadian universities. Take a look for example at UBC [1]. It's about 2-3 more than the actual number for most programs for domestic students. And also rather low for international students. It's similar for U of T [2] and McGill [3].

> $25000/year for daycare for two kids

Wow more than a 1000 dollars per kid? That's quite a bit. Is that typical?

[1]: http://students.ubc.ca/enrolment/finances/tuition/undergradu... [2]: http://www.adm.utoronto.ca/cost-of-university/ [3]: http://www.mcgill.ca/student-accounts/tuition-charges/fallwi...

University of Toronto, Engineering Science Winter 2014-2015: http://www.fees.utoronto.ca/Assets/Student+Accounts+Digital+...

EDIT> And Waterloo (see CS and Systems Engineering): https://uwaterloo.ca/find-out-more/financing/fees

I was referring to top engineering programs that are competitive with top US engineering and CS schools.

EDIT2> I doubt that the daycare rate is typical, in general, but it's typical for the area of Toronto that we live in. Overall, though, daycare is very expensive.

I'm pretty sure UBC is pretty competitive, at least from a rankings perspective. It's just one of the few schools that has a cheap engineering program.

>> $25000/year for daycare for two kids > Wow more than a 1000 dollars per kid? > That's quite a bit. > Is that typical?

It's cheap.

We pay 700 EUR/month for 2 days/week daycare for one child here in The Netherlands.

In France we pay about zero per month for three kids.

Wow. Is the subsidy available to all or is it salary-based? The government here removed the subsidy here for higher incomes (~$100k+ year combined). What they didn't remove was the extra tax that both employer and employee have to pay to "cover" childcare for the first child. The second/third children are heavily subsidized (90%).

So in my situation, I'm just above the threshold and have 1 child; so am lucky enough to have almost no subsidy whilst still paying extra tax for the privilege. Double dipping.

Luckily for the government here I can't vote (British citizen), and I'm a compassionate capitalist so generally agree with the idea of spreading wealth around (we just do a horrible job at taxing capital gains and inheritance; I'd happily pay progressive 70-99% on the top of my net-worth if the tax was applied consistently, fairly and accounted for income over time in a fair way (so taxes are normalized over years; for sports people and the like))........

$200/month for 5 days/week daycare for one child... Here in South Africa.

I'd chalk it up to "cost of living" differences, but I'd say there is a whole lot more to it. Certifications, licenses, insurance, minimum wages. All these things affect the price, so we can't entirely compare the prices as apples to apples.

South Africa's a strange comparison: labour utilization there is low and the gap between poor and middle class is large.

If I was to live there I'd pay much more in healthcare, but housing, childcare and laborer is really cheap.

(source: family who live there).

I think it's just a difference in culture. The majority of people I went to high school with had their tuition paid for by parents as well. I'm from southern California if you're curious

"How do you imagine you're going to be able to even as a likely relatively well-paid individual, if tuition rates keep climbing?" (proud) Parent here - We just put two kids through top-tier state schools paying almost all expenses. Expenses worked out to about $20K per year, per kid. Luckily for us, there was little overlap in their college years. Each had well-paid summer internships for at least the last summer so that helped as we really never specifically saved for college expenses. Now they've both graduated and are gainfully employed with Google and Lockheed respectively, starting their adult-life with no debt.

"Absolutely" the norm? Maybe in your neighborhood, but some parts of the country actually expect their kids to show some work ethic and gumption rather than expecting parents to pay for everything. A kid ought to have some skin in the game or else they end up majoring in women's studies or some such nonsense.

You seem to be engaging in black-and-white thinking. The numbers don't add up any more. This might have made sense in an era where graduates were basically guaranteed jobs and a house cost 3x a graduate's yearly salary (and mortgages were frowned upon).

In the era of massive student debt it makes no sense to cripple your children (and therefore your family) financially, if you can afford not to. Especially not to prove a point that can be learned any number of other ways.

In this era, I believe that "don't go into debt (unless you can afford to service it)" is a much more useful lesson.

As far as I'm concerned, my children's job is to learn, and to figure out how to excel. That requires time and breathing room. If they look like they're turning into dilettantes, then of course I can decide not to pay for things. I just wouldn't prematurely handicap them (and myself) financially if I didn't have to.

EDIT> Basically, I object to your casting this in moralistic terms. Of course, we all know people who don't know the value of money. You'd be surprised at how often these are poor or uneducated people, though. If anything, having wealthy parents gives you more chances to learn how to deploy money intelligently.

I don't get it, either. My siblings and I were legally adults, so why were our parents responsible for anything? We got loans, worked jobs, and were responsible to no one else for bad grades or extra semesters.

The other responses say, "Because it's expected." That doesn't answer the question. Have attitudes shifted? As education's become more expensive, I wouldn't be surprised if colleges have marketed the idea that good parents pay for their adult child's education, in order to make sure that they have business as they jack up prices.

If your goal is to help your child get the best outcome they can get from college, its way more beneficial to have them focus on doing well in school and having the time to network as well as possible (especially in a school like Stanford) than trying to make them work what's likely a shitty job while they're in school to help pay for their tuition.

I think the goal is to help my child get the best outcome from life. Even though I think college today is a bad deal, I'm not going to go full Thiel - I agree with you that networking is the critical function of college, and there's exposure to a variety of fields. I think college is at its best as a petri dish for serendipity.

You shouldn't have to settle for shitty jobs in school, and focus on schoolwork is overrated. I honed graphic design, salesmanship, and web design skills from the three I had. The last actually was a distraction from school, but then "web" became a paying job for me when it wasn't in the school curriculum. The constraint of needing to work created a bunch of opportunities.

>though cosigned by my stepdad (who made it clear he would in no way take on any of the financial obligation of the loans)

Co-signing is taking on the financial obligation.

Only if signer is delinquent. People often cosign because they are family (without stepdad cosigning he wouldnt have got the loan). But also then you dont make them pay because they're family.

It's extremely difficult to gain admittance to a place like Stanford if your parents are not supportive of your educational ambitions. This is both because your academic results earlier in life (upon which admittance would be based) will tend to reflect an unsupportive family, and a place like Stanford wants students with supportive families. That's why parental support matters.

Because kids with bad parents don't deserve good educations. Sigh.

Of course they do, but most won't get it. It's one of life's many crappy realities. There's a line from a song..."Where it ends...usually depends on where you start". There are of course exceptions, but this generally holds true.

Curently an unfortunate reality: https://medium.com/@opirmusic/why-software-developers-should...

Or, maybe Stanford counts on parential guilt? They have quite a big savings account. (Stanford’s $21.4 billion endowment (as of Aug. 31, 2014), and grateful donors give the school close to a billion dollars a year. I don't know how many full scholarships Stanford gives away per year, but I hope it's a lot?

(http://facts.stanford.edu/administration/finances)

Supportive of one's educational ambitions ~= having the money to pay for one's educational ambitions to be realized.

Sure, which is why Stanford has programs like this one. But for parents that do have the money it makes sense to expect them to spend some of it.

Hey I have a sob story too. My parents own a 3 million dollar house and sent my sister to Harker for 20 grand a year, but only give me 20k total for college.

I mowed lawns, washed dishes, and worked retail before finding internships. But you know what? I still have more built in advantages than kids on need based scholarships. I'm luck my parents raised me well enough to get into good schools.

If he co-signed then he 100%, absolutely took on the financial obligation. If you don't pay, he's legally, 100% on the hook for it.

...legally, yes. However, he couldn't afford it, and I haven't gone delinquent, ever. In practical terms, he made it clear that he was cosigning because without that action I wouldn't have been able to afford college.

He could not, and does not to this day, have the money to pay down those loans (which I am currently paying down). However, he did have one thing he could offer: a reasonable credit history.

Essentially he lent me credibility. (And then told me nobody would ever find the body if I didn't pay down my debt.)

I was incredibly bitter too when my parents left me hanging and I had to pay for most of tuition and rent. But then I realized lots of people pay for their own education. I certainly didn't achieve the impossible.

Think of your stepdad's stance as tough love and motivation.

I am not bitter in the slightest, I'm just astounded that so many people expected their parents to pay for their college (and in turn expect to pay for their adult offspring's education). Simply put, it doesn't compute.

Charming gentleman...

Why should it be the parents' income that anyone cares about?

Why did Willie Sutton rob banks?

The trouble with that logic is that it doesn't work when the effects stack.

This is a good case in point. According to the article families who make less than $125,000 pay nothing and those who make $225,000 or more pay the full amount, listed as $65,000. Now let's take the hypothetical family where one parent makes $125,000 and the other makes $100,000 and look at what happens. If the second parent keeps his or her job, this is where the $100,000 salary goes:

  28% federal income tax ($28,000)
  9.3% California state income tax ($9,300)
  Stanford annual cost ($65,000)
  Total: ($102,300)

In other words, that parent is working a full time job in order to lose $2300. And that's assuming there are no other taxes or loss of benefits that come from the higher income, which there are, and that there is only one child in college.

It seems like this can't possibly have been the intended outcome.

> It seems like this can't possibly have been the intended outcome.

It's exactly the intended outcome. Progressive taxes and regressive subsidies are designed specifically to disincentivize earning income. To think these policies are implemented without actually thinking about both sides of the coin would take Hanlon's razor to the extreme.

As more people stop to actually do the math, and realized the mind-boggling treadmill that is the middle-class, not surprisingly the middle class shrinks.

The only reason keeping many in the game while they have school-aged children is some professions don't lend themselves to just taking 5 years off. But some lend themselves surprisingly well to that, and frankly I don't see an ethical dilemma in not working if the work has negative expected benefit.

The real answer imo? Stanford is a luxury, and not even a particularly compelling one at that. Are there amazing professors and cutting edge research at the university? Of course. But is it necessary? In my opinion it would be really hard to make a case for it.

For example, the name on the paper when you graduate has to be one of the more cynical compelling reasons. The connections you'll hopefully make there as a student will be invaluable later in life. Some of the most ambitious people make it to these distinguished institution and those people go on even further after they graduate.

> families who make less than $125,000 pay nothing

Nope. Those families pay no tuition, but still may pay living expenses. The 'pay nothing' tier starts at $65,000

> Those families pay no tuition, but still may pay living expenses. The 'pay nothing' tier starts at $65,000

That doesn't actually make anything better. You're attempting to address the perverse incentive for one of the parents in the family making $225,000 to quit their job by pointing to a higher burden on the families making between $65,000 and $125,000, implying that it's less desirable to become one of those families. But the incentive is still there whether it preposterously exceeds 100% or only approaches it, and reducing it by making the burden on even less affluent middle class families worse can't possibly be the right solution.

The only thing that I was 'attempting to address' was that your comment contains a factual error.

Your calculation assumes a family could deliberately reduce their income by $100,000 in order to save $65,000 on their Stanford term bill, resulting in a (net gain of $2,300) but this is not correct. The savings are more like $45,000 (the cost of tuition).

You're quite correct that I didn't account for the cost of housing paid by those making between $65,000 and $125,000, which certainly reduces the marginal rate on those making over $125,000 (not by reducing the actual burden on those people but rather by increasing the burden on those paying between $65,000 and $125,000).

But there are many, many things I didn't account for. The point was not to make a full accounting, the point was to present a back of the envelope calculation demonstrating what can hypothetically happen when programs are structured this way. If you want better researched numbers I encourage you to read this:

http://johnhcochrane.blogspot.com/2012/11/taxes-and-cliffs.h...

Those numbers also point out something else somewhat misleading about my example -- although it is possible (particularly with regard to education programs) for the upper middle class to be ravaged by excessive marginal tax rates, those most hard hit by means tested programs are really the working poor. Have a look in the first graph at the marginal rate on someone making minimum wage.

Your 'back of the envelope calculation' was in error, and in a way that affected the conclusions you drew. You claimed that the new Stanford FinAid policy introduced a 'cliff' (negative returns for increased family income), but it doesn't.

I'm not making any other claims about the merits of progressive taxation, price discrimination by universities, or economic policies affecting the working class. I'm just pointing out your error so that other readers don't rely on your calculations.

From the fine article:

  "Stanford will expect no parental contribution toward tuition [~$45K for 2015-6] from parents with annual incomes below $125,000.... And there will be zero parental contribution toward tuition, room or board [~$65K for 2015-6] for parents with annual incomes below $65,000"

So your table should read:

  28% federal income tax ($28,000)
  9.3% California state income tax ($9,300)
  Reduced Stanford FinAid ($45,000)
  Total: ($82,300)

This is admittedly a very high marginal rate, but it is not negative.

Of course the calculation was wrong. The correct calculation would require consideration of the entire tax code and every means tested benefit the hypothetical family might be eligible for. But your assumption that the loss of $45,000 rather than $65,000 makes it not a cliff is equally erroneous, because many of the other things not accounted for go the other way. The loss of financial aid may still exceed $45,000 for a family with more than one child in college, or if the housing expenses in question are eligible for some other source of means tested financial aid. The additional income may destroy various previously permissible tax deductions because of the Alternative Minimum Tax. There are any number of totally unrelated benefits that the family may lose eligibility for at the same time.

There is a realistic hypothetical family that loses more than they make in total regardless of whether the loss of Stanford financial aid is $65,000 or $45,000.

Even that part is a scam

"In either case, students will still be expected to contribute toward their own educational expenses from summer income, savings and part-time work during the school year. Students are expected to contribute at least $5,000 per year from these sources but are not expected to borrow to make the contribution."

So its really $5K/yr even at $60K/yr and below, despite the glorious headlines. Its quite a downer to start with a fantastic headline and realize its all BS, although the truth of the matter is a pretty good deal. The article should have been more honest. Under promise and over deliver, as opposed to the opposite provided.

Most jobs for kids at that age aren't going to pay all that well. $9/hr? After taxes, they'll need to be working almost 1000 hours per year to contribute $5k per year from those sources. 1000 hours.

Was comparing this to my own state school numbers from 20+ years ago. One year was < $5k. Min wage at $3. One could work a summer job (or two) and pay for a year of school. That just doesn't seem possible any more, or at least not without a lot of assistance programs.

Eventually, schools are going to start looking at grandparents' assets. It will become the norm to pay for school from their wills, after universities lobby to have an estate tax break if used for education.

This likely already happens (college costs paid from inheritance).

When my wife's grandparents passed, they put the entire inheritance into a trust fund for the grandkids' education. One of the reasons they did it that way was to keep the tax liabilities to a minimum. (I don't know the specific relevant laws, but I know they did it for a reason.)

This is exactly the reason progressive income taxes are unfair: the incentive to create additional economic activity is reduced because of higher marginal rates. I never understood the stupidity of people paying different percentages in a taxes; it's punishing hard work. Your exampke makes it clear that it would be better to not work as hard because it actually would be irrational to do so.

The other part of this is the inherent infairness of someone paying $65000 per year for Stanford. That's just insane. The price of something should not change based on someone's income. Why should someone making $225k per forced to subsidize everyone else? If the lower income kids want a BMW, should higher income families be required to pay for it? Going to Stanford isn't a right; it's a luxury.

Tuition, like tax rates should be the same for everyone. As it is now, the market responsiveness of higher education costs is distorted because of this cross subsidization scheme. If we eliminated all financial aid, Stanford would cost $8000 per. As it is now, universities have zero incentives to cut costs because many of them face no exposure to actual market forces. Whatever extra they want, they know students will just go deeper into debt.

It's a scam. How many Vice Provosts and Assistant Deans or "coordinators for diversity" does a university actually need? They could likely cut half of university administrators and it would make no appreciable difference to the quality of education.

The relationship between hard work and income is very slight. The price of labour comes from supply and demand. There's little shortage of people willing to work hard. Skill, knowledge, networks: that's what people pay for, not hard work.

Now turn your perspective around. How fair is the distribution of educational opportunity and, especially, networking opportunity with powerful people?

Progressive taxes don't do my income any good. But I wouldn't be in the position I am today without them; I grew up poor, too poor to own a family computer, never mind a family car. I still resent the lack of information I had about educational opportunities. And more than anything, I wonder what we could achieve if the impoverished of the world didn't need to scratch out subsistence living, and could instead apply themselves to the limits of their ability.

To be fair there are tuition deductions that probably make it slightly better...

That's true, although it doesn't really change the problem. That working can literally cause you to lose money is particularly outrageous (and can still happen by just accounting for more income-dependent taxes and benefits disqualifications), but even if you were "only" losing 80% of your salary, it's still totally unreasonable. Why is your marginal tax rate effectively 80% but someone making twice as much or more is paying less than half that percentage?

The right way to fund things like this is to give the same dollar amount to everyone but collect the same percentage from everyone. The rich still pay their share because a percentage of $20K/year is naturally much less money than the same percentage of $20M/year, but you discontinue the wanton destruction of the middle class, and as a happy consequence you also eliminate a lot of waste and frustration because if you give everyone the same benefits unconditionally then you don't need an invasive means testing bureaucracy.

The CBO has some great graphs on this. It literally starts at $0 and can go--obviously depending on a lot specifics--all the way up to $225k, where your marginal income is zero dollars. Every dollar you earn is taken, every dollar your don't is covered.

The basic income + flat tax system is ethically superior but politically impossible. What's worse is we're still actively going in the other direction, to more progressive taxes and more regressive subsidies.