Merrimack College student Katelyn Souers has suffered through many 8 a.m. classes after staying up all night, but not because she was partying or cramming for a big exam.
Rather, she was working the overnight shift as a dispatcher for the Groveland Police Department, one of the jobs she holds to afford her $30,000-a-year tuition.
"When you first do it and you get no sleep, you really do get pretty tired," the 20-year-old Haverhill native said of the 11 p.m. to 7 a.m. shift. "But if they call and need me, I'll go in on a school night."
She has classes starting at 8 a.m., and her work-study job in the school's admissions office keeps her busy in the afternoon.
"So, yeah, sometimes I get tired," Souers said. "But you get used to it."
Everywhere, students like Souers are navigating their way through the economic perfect storm that has hit college campuses this year: Tuition is up, the economy is down and the private loan market is in shambles.
"There is no question that the cost is a more significant concern than ever in the past," said Thomas Horgan, president and CEO of the New Hampshire College and University Council.
He said studies show that students are taking more loans and using credit cards at a much higher rate.
"I am worried about the tipping point, when families decide that college is actually not financially worth it or financially possible," Horgan said. "Where is that tipping point?"
The average annual bill to live and attend school full time at a four-year private institution was $32,307 last year, according to The College Board. That's $13,000 more than it was just a decade ago.
Currently, a record number of requests for financial aid are being processed. Nationally, 8.9 million students filed for aid during the first half of 2008, a 16.3 percent increase from the 7.7 million who applied last year during that same period.
Meanwhile, turmoil in the financial markets has driven many lenders out of the student business.
In March, the New Hampshire Higher Education Loan Corp. suspended its private loan program. Just last week, regulators in the state filed a civil complaint against UBS Securities, alleging the banking giant defrauded New Hampshire's leading provider of student loan financing.
And at the close of July, the Massachusetts Educational Financing Authority, which provided more than $500 million worth of college financing last year, suspended its private loan program.
State officials in both Massachusetts and New Hampshire are working on potential remedies. With fewer student loans available, however, thousands of students found themselves scrambling to cover first-term payments, which were due by Aug. 15 at many institutions.
Growth at community colleges
Despite the daunting numbers, there are plenty of determined students like Souers who are simply putting their heads down, rolling up their sleeves, and doing what it takes to afford that college degree.
For Souers, it meant obtaining her associate degree from less-expensive Northern Essex Community College while living at home before transferring to Merrimack College for her junior year.
After just one semester on campus, Souers lucked into a position as a residential assistant, which pays $6,000 a year toward tuition costs and allows her to live in a highly desirable single-person room on campus.
And every summer, Souers continues to live at home and take classes at NECC, the credits from which transfer to Merrimack.
Like Souers, more students are looking at two-year community colleges to reduce their educational costs. Merrimack alone has witnessed an approximate 10 percent increase in students transferring from a two-year public school.
At Northern Essex, enrollment of recent high school graduates for this fall is up 23 percent over last fall. And between the fall of 2005 and the fall of 2007, that number went up 32 percent.
"We're finding that a lot more high school students are interested in getting started at Northern Essex, where they can explore majors and make decisions about what direction they want to go in without spending a lot of money," said Nora Sheridan, the college's dean of enrollment services.
"By beginning at Northern Essex, students avoid having to take out large student loans to afford a college education," she said.
The savings can be significant. At Northern Essex, the average annual tuition is approximately $3,510, compared to more than $8,000 at a four-year state school and more than $30,000 at a private college.
While she did have to take out some Stafford Loans, Souers will graduate $25,000 to $30,000 in debt. She is now looking into one-year graduate school programs in London — made affordable by several decisions she made to finance her undergraduate college education.
"I really think I've cut my debt in half," she said. "Just by transferring alone, I saved $80,000. And because I got my associate degree with high honors, Merrimack gave me a transfer scholarship. Basically, I was trying to get four years into two financially."
Priorities and compromises
Incoming freshman Derek Sheehan of Haverhill decided to explore his musical interests at Northern Essex for his first two years of college before committing to a more expensive school.
His parents, Elaine and Mark, struck a deal with him, just as they did with their older son, Andrew. Financially, they could cover expenses for a four-year experience at a state school. But should either of the boys feel a private institution would better serve him, he could take on loans for the additional costs.
Andrew looked into private schools, but decided the debt just wasn't worth taking on and is now wrapping up his final year at UMass Lowell. In Derek's case, the money he's saving his parents by attending Northern Essex with a Presidential Scholarship for two years will go toward future expenses, like graduate school.
"Both my husband and I went to state schools and both came out debt free," Elaine Sheehan said. "And we know people who came out of there at UMass Lowell and then worked in places doing the same job as others who had gone to much more expensive schools and had 10, 12 years of loans."
Lawrence native Shalimar Quiles, 20, loved her freshman-year experience at Southern Connecticut State University. But her time there didn't last long because of the substantial debt she took on in just one year.
"When you grow up in a place like Lawrence and not everyone makes it out, it's a big thing to leave the state for school," she said. "I was very set on that. But I had to take out so much money to get out of here — it was $15,000 for one year. It was too much money, and when the time came to renew the loan, it just wasn't worth it."
Returning home was difficult, she said, as feelings of failure were hard to shrug off. But Quiles went on to complete her associate degree in journalism from Northern Essex with a 3.7 GPA — good enough to get her almost a full ride at Simmons College to complete her bachelor's degree.
Other students are choosing to live at home and commute to classes to afford the school of their choice.
Colleen O'Shaughnessy, a 20-year-old Haverhill native, graduated from the sign language interpreter program at Northern Essex this spring and will attend UMass Lowell this fall.
After examining all of the costs with her father, she decided to continue living at home to save the $7,519 for room and board.
"Basically, I can get two years at UMass Lowell while living at home for the same as one year living on campus. And I would probably just be sitting in my room reading all the time," O'Shaughnessy said. "I can do that here at home just as well as I would do it there. Right now, I'm just focused on finishing school."
And at the end of the day, that's what Horgan said every student should be focused on.
"You've got to be a savvy consumer," he said. "It may make more sense for you to go to a lower-cost school or a community college or live at home for a while. Tough times, tough choices. But at the end of the day, you're going to be so much better off having a college degree."
Staff writer Mike LaBella, the Associated Press and Scripps Howard News Service contributed to this report.
Tips for students and their parents
r Be proactive. Fill out the FAFSA (Free Application for Federal Student Aid) early in the calendar year. Apply for any and all scholarships and grants. And look into Federal Stafford Loans, said Tina Favara, interim director of financial aid at Northern Essex Community College.
r Think about the value of the debt. What do you want those student loans to cover — an actual education or four years of partying, asked Larry Siegel, dean of student affairs at UMass Lowell.
r When looking for potential lenders, see which ones local colleges recommend, said Merrimack College spokeswoman Heather Notaro.
r Be ready to work. At UMass Lowell, roughly three-quarters of the students have part-time jobs, on or off campus. Some kids work 15 hours a week; others log in as many as 40 hours, Siegel said.
r Mom and Dad, definitely apply for a Federal PLUS, a parent loan for undergraduate costs. Even if you don't qualify, your child will be offered additional Stafford Loan funding, said Tara Payne, spokeswoman of the New Hampshire Higher Educational Loan Corp.
r The best advice for any student panicking about paying for this coming year? Don't go this road alone. "Come to the financial aid office," said Erika Mantz at the University of New Hampshire.
College costs
% %Northern Essex Community College % UMass Lowell % UNH % Merrimack College %
General tuition and associated fees for this academic year % $3,510 % In-state, $9,181; out-of-state, $21,201 % In-state, $9,420; out-of-state, $22,900 % $30,060 %
General room and board fees for this academic year % $0 % $7,519 % Minimum $7,534 % $10,190 %
Average debt students graduated with last academic year % Information Unavailable % $17,869 % $26,304 % $39,000, including federal Stafford and alternative loans %
Percentage of students who received student loans 2006-2007 % Information Unavailable % 66 percent of undergraduate student for 2007 % 72 percent just through Stafford Loan Program % 69 percent total %
Source: All figures, which are approximate, were supplied by school officials.
Loan crisis turns legal
New Hampshire securities regulators filed a civil complaint late last week, accusing banking giant UBS Securities of defrauding the state's leading issuer of student loans, New Hampshire Higher Education Loan Corporation.
The Bureau of Securities Regulation said UBS knew the auction-rate securities market was on the verge of collapse in February, but was "actively encouraging" the lender to sell more of the bonds.
UBS had no immediate response, but spokespeople said a statement was being prepared.
The market collapse forced NHHELCO to shut down two loan programs in March, affecting about 6,000 students. Last week, it asked UBS for a line of credit so it could get loans flowing normally again.
NHHELCO President Rene Drouin said his company handles 80 to 85 percent of the student loans in the state, $250 million worth annually in the past. Using other banks and credit unions, it has continued handling federal student loans totaling about $90 million.
But New Hampshire students scraping together funding aren't alone. At the close of July, the Massachusetts Educational Financing Authority also suspended its private loan program.
When lenders like MEFA started looking a little iffy last spring, Merrimack College's Financial Aid Office evaluated about 25 lenders.
The school selected six reputable and reliable lenders to recommend to students. Borrowers were by no means required to finance through these six companies, but it helped reduce the number of students in the MEFA jam.
"Merrimack had about 350 borrowers in parent undergraduate loans and student alternative loans with MEFA (last year). Due to planning ahead, the college was able to steer those borrowers to more stable means of financing," school spokeswoman Heather Notaro wrote in an e-mail.
Last year, 436 of the 8,500 eligible UMass Lowell students received student loans through MEFA, according to college spokeswoman Christine Gillette. As a direct lender, the state school has quickly connected families with other loans
— The Associated Press contributed to this report.
