You Might Be 'Upper-Class' If You Pay For This Expense In All Cash

Being part of the "upper class" is an aspiration for a lot of people. But considering the ambiguity around the term, the different standards of living in different states, as well as the increase in the average median income of the country, it is often difficult to know who actually is "upper class" and who is not. In terms of pure numbers though, the Pew Research Center put the bar at $169,000 annual income for a three-member household in 2022. This is more than double the average median household income in the country.

However, being upper class is more about wealth than just income. There are some telling signs that mean you're officially "upper class" and how you spend your money (not just earn it) is a big part of the equation. One of the signs of an upper class individual is someone who is able to pay for higher education and private tutoring expenses with cash. While the middle class does not find itself in the position to afford this privilege and has to rely on loans, the upper class uses assets, savings, and cash flow to fund this expense.

Paying for college education is no joke. With the cost of college rising faster than inflation, the average student in the country is paying as much as $38,270 per year for college in 2025, per Education Data Initiative. This cost varies depending on the type of school and location. The average cost of completing a four-year college degree in-state is $108,584 for the entire tenure. For an out-of-state college, the figure is at $182,832; whereas private, nonprofit college attendees spend a whopping $226,512 over four years.

Expenses on private tutoring are rising just as quickly. Depending on tutor credentials, subject, and frequency, the annual cost of a private tutor for homeschool teaching ranges from $3,600 all the way up to $70,000, per Tutors.com. Considering the fact that student loan interest rates combined with the loss of income while at college can balloon the actual cost of education to as much as $500,000, the upper class is at a massive advantage for paying for college or private tutoring expenses in cash. And becuase most people do not have a quarter million in cash reserves, it is understandable that they are unable to fund the entire cost of education in cash and avoid debt.

For a sizable chunk of the upper class, higher education and private tutoring costs can be adequately covered with cash flow, especially for those working higher-paying jobs in the country. Such families are not eligible for financial aid, such as need-based aid grants, given their income level. Support through programs such as FAFSA (Free Application for Federal Student Aid) is calculated based on a family's income as well as the cost of tuition, and even upper class families can benefit. However other federal programs such as the Pell Grant are designed specifically for low-income and middle-income families, most of which make less than $50,000 annually.

But the upper class doesn't always pay for education costs straight out of their pockets either. One of the ways that the upper class pays for higher education is through tax-advantaged savings accounts, such as a 529 plan. A 529 plan allows money to grow tax-free. Money can also be withdrawn tax-free as long as it is for educational purposes. This includes expenses such as books, tuition fees, and room and board. Similar plans used by the upper class include Coverdell Education Savings Accounts or ESAs. These plans offer the flexibility of using assets for private tutoring as well as higher education. Some upper class families also use trust funds to pay for education costs, since it allows them certain tax benefits.