NPR

Families Make Big Changes To Pay For College

Emily Macri looks over a college brochure with her mother, Maureen O'Brien, in Kingman, Ariz. Macri is transferring to Northern Arizona University so that she can pay in-state tuition. (Courtesy of Emily Macri)

Maureen O'Brien told her daughter Emily Macri: dream big.

She could pick any college she wanted and they would figure out a way to pay for it.

Macri chose the University of Vermont, which costs more than $49,000 in tuition and fees per year for out-of-state residents.

29%: Grants & Scholarships

28%: Parent Income & Savings

18%: Student Borrowing

12%: Student Income & Savings

9%: Parent Borrowing

4%: Relatives & Friends

Source: "How America Pays for College 2012"

O'Brien and her daughter co-signed a private student loan from Sallie Mae for $24,000 and a $30,000 Parent PLUS loan, a federal loan program for parents. And that was just for Macri's first two years of college.

"That was one of the compelling reasons why I asked her to consider coming to a state school here in Arizona," O'Brien says. "I just couldn't keep doing that. And with my son going to college, too, I can't do that for two kids."

A recent study by the research group Ipsos and the student loan giant, Sallie Mae, shows that approximately 70 percent of families are eliminating college choices based on cost. More students are also now choosing to enroll in community colleges, which is often the most affordable option.

This fall, Emily will be a transfer student at Northern Arizona University, which costs only about a third of the cost of the University of Vermont.

Her younger brother, Casey, will be starting as a freshman at Arizona State University, which costs about the same as Northern Arizona.

The family is expecting to borrow an additional $70,000 to pay for Emily's last two years of college and Casey's next four.

Emily says leaving the East Coast and having to transfer is tough.

"I loved it and it is a shame that I can't go back again in the fall," she says. "But then again, I have to look on the bright side of things, I'll be saving a lot of money."

She tried to offset college expenses by working part time. And this summer, she's working as a cashier at a frozen yogurt shop.

She says she's determined to finish her degree in environmental studies.

"I can't afford to go to college, but I'm taking out loans, I'm putting my foot forward and making sure I get an education so that I can get a really good job in the long run," Emily says.

Growing Debt

O'Brien isn't just helping finance her daughter's education, she's also juggling her own student loan debt.

In 2004, after her job at a technology company was outsourced to India, she decided to go back to school. She enrolled in a physician's assistant program at the Rochester Institute of Technology where she had to take out more than $60,000 in loans.

But her salary as a physician's assistant in upstate New York wasn't enough for her to make the monthly loan payments. Her home was facing foreclosure — so she sold it and moved out to Kingman, Ariz., with her son.

She was hoping to enroll in a loan forgiveness program by moving to an underserved region of the country, but she later found out that she was disqualified because she is working as a specialist in urology.

She is paid well now with a salary of $93,000 a year. Still, more than a third of her take-home pay goes toward paying off student loans.

"There's a feeling of satisfaction you get when you help people medically that you didn't get when you're working at a help desk or working at a cubicle," O'Brien says. "But at the same time, I think I've maybe mortgaged my future in ways that I couldn't have imagined when I went back to school."

She has no savings, no money put away for retirement and is thinking of taking on a second job to pay off her kids' loans.

And she even has a little bit to pay off in student loans from her first degree — from 1996.

Despite her family's growing student loan debt, O'Brien still believes in the value of a college education. She says it was her first degree — in French and international studies — that taught her how to think critically. And she wants the same for her kids.

The Promise Of College

Steven Maack, an English teacher at East High in Wichita, Kan., says he feels the same way. He and his wife make $110,000 a year. Ever since their daughter, Eden Maack, was born, they've been saving for college with help from grandparents. They've saved $16,000 so far — but that will soon disappear.

"In order to get her through the first year, we'll have to spend all the money we've saved," Steven Maack says. "It's conceivable for years two, three or four we'll have to borrow quite a significant amount."

Eden will be starting as a freshman at her first-choice school, Beloit College, in Wisconsin in a few weeks. It's also the school that offered her the best financial aid.

Beloit costs about $46,000 per year for both in-state and out-of-state students. Eden earned a $20,000 presidential scholarship and grants from the school, which will cover about half the cost each year, but her family will still have to take out more than $5,000 in loans to pay for her first year of college.

And once her parents' savings are spent on funding her freshman year, they'll have to think about how to fund her next three years of college.

For the Maacks, it's a family affair. Steven Maack says his parents paid for his undergraduate education many decades ago under the condition that he would one day pay for his children's. Eden will also try to take on a campus job to help with costs, but her main job is to finish school.

"It's my responsibility to finish college and make their burden worthwhile," Eden says.

Eden also has a sister just two years behind her and says that if she ever has kids, she knows her obligation is to one day pay for their college educations.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

RENEE MONTAGNE, HOST:

It's MORNING EDITION from NPR News. Good morning. I'm Renee Montagne.

STEVE INSKEEP, HOST:

And I'm Steve Inskeep.

In the coming weeks, many students and their parents will be cosigning big loans in order to start college this fall. Here at MORNING EDITION we've been paying close attention to how families are pulling together to finance their lives in this tough economy. It's a series we call Family Matters. And today, in our latest installment, NPR's Tasnim Shamma has the story of one family that has made big changes to achieve their dreams of a college education.

TASNIM SHAMMA, BYLINE: Maureen O'Brien told her daughter Emily, dream big. Pick any school and they would figure out a way to pay for it. Emily chose the University of Vermont. Price tag for out-of-state residents, over $49,000 a year. Emily took out a loan to pay for about half of it. Her mom, who's single, borrowed the remainder through a federal loan program for parents. Together, Maureen and Emily co-signed more than $54,000 in loans for just the first two years of college.

MAUREEN O'BRIEN: That was one of the compelling reasons why I asked her to consider coming to a state school here in Arizona, now that we're residents, because I just couldn't keep doing that. And then with, you know, my son going to college too - I can't do that for two kids.

SHAMMA: This fall, Emily will be a transfer student at Northern Arizona University. It's about a third of the cost of the University of Vermont. Her younger brother, Casey, will soon enroll as a freshman at another state school. They're expecting to borrow an additional $70,000 to pay for college. Emily says leaving the East Coast and having to transfer is tough.

EMILY O'BRIEN: I loved it and it is a shame that I can't go back again in the fall.

SHAMMA: She tried to offset college expenses by working part time. And this summer, she's working as a cashier at a frozen yogurt shop. She says she's determined to finish her degree in environmental studies.

O'BRIEN: I can't afford to go to college, but I'm taking out loans, I'm putting my foot forward and making sure I get an education so that I can get a really good job in the long run.

SHAMMA: Emily's mom isn't just helping finance her daughter's education. Maureen O'Brien is also juggling $60,000 of her own student loan debt. That's from when she went back to school to become a physician's assistant. She'd been laid off from her job in 2004.

But even after she graduated her salary in upstate New York wasn't enough for her to make the monthly loan payments. Her home was facing foreclosure, so she sold it and moved out to Kingman, Arizona with her son.

O'BRIEN: So he and I packed up a truck and the dog, and spent four days driving out here.

SHAMMA: She has a good salary now - about $93,000 a year. Still, more than a third of her take-home pay goes toward paying off student loans for her and for Emily.

O'BRIEN: There's a feeling of satisfaction that you get when you go home at night that you didn't get working at a help desk or working in a cubicle. But, at the same time, I think I've maybe mortgaged my future in ways that I couldn't have imagined when I went back to school.

SHAMMA: O'Brien laughs nervously when she talks about the future.

O'BRIEN: I don't know what I'm going to do.

SHAMMA: She has no savings, no money put away for retirement, and she even has a little bit to pay off from her first degree in 1996. She says it all feels heavy.

O'BRIEN: People really need to look at the fact that this is a burden to all young people and how it's eventually going to end up being a really drain on the economy, because people can't buy houses and they can't buy things. They can't put the money back in.

SHAMMA: Despite her family's growing debt, O'Brien still believes in the value of a college education. She says her first undergraduate degree - in French and international studies - taught her how to think critically. And she wants the same for her kids.

For NPR News, I'm Tasnim Shamma. Transcript provided by NPR, Copyright NPR.

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