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2016 July 20 - 04:27 pm

Mass. Families Grapple With Rising College Costs

More Students Consider Community Colleges To Avert Debt

WORCESTER, Mass. (AP) — Growing up next to the beckoning gleam of the city’s colleges, Rose Molina’s daughter envisioned herself going to one of those schools one day. “It was one of the things she’d talk about when she was very young,” she said.

Now an 11th-grader at Worcester Technical High School, Sierra Molina and her family are encountering a different reality, as dreams take a back seat to dollars.

“We’re going to struggle to send her to school. We’ll do everything we can, without drowning in debt — whether that means she has to commute or stay close to home,” Molina said. “We were just not equipped for this at all.”

The Molinas are not alone, as families across the country grapple with the rising cost of higher education.

Accounting for inflation, the average annual tuition and fees at a private, four-year institution has nearly doubled over the past 25 years, from $17,094 in 1990-91 to $32,405 in 2015-16, according to the College Board, a nonprofit created in 1900 to expand access to higher education. Student loans have subsequently become a larger part of how parents are affording to send their kids to college, leading to a nationwide debt crisis that is spooking families and worrying higher education officials and lawmakers. According to the U.S. Department of Education, the country’s collective student loan debt is now approximately $1.2 trillion.

But college financing experts believe the doom and gloom surrounding their industry is largely unwarranted, and that good planning coupled with realistic expectations will allow almost any family to find a campus that is a good fit. Some said they’ve also noticed more parents embracing that more pragmatic approach, especially since the Great Recession has changed the way many of them make financial decisions.

“I’m seeing parents be better consumers,” said Julie Shields- Rutyna, director of college planning for the Massachusetts Educational Financing Authority.

“And I’m so happy to see that trend.”

Shields-Rutyna and other college planners recalled parents having a comparatively less urgent attitude toward paying for college in the past. Some bad habits continue to linger, however.

“We really try to impress upon (families) to not take out a lot of private loans,” said Donna Connolly, director of youth access and career planning at the Worcester-based Massachusetts Education & Career Opportunities Inc., which helps students at Worcester’s public high schools plan for college. A rule of thumb, she said, is “don’t take out more than what your (student’s) firstyear salary should be. I think that’s very true.”

Despite that advice, the percentage of U.S. students with loan debt increased from 65 to 69 percent from 2004 to 2014, according to Institute for College Access & Success. Thanks to the average debt load growing twice the rate of inflation over that period, the typical Massachusetts college graduate had nearly twice as much debt, close to $30,000, in 2014 compared to a 2004 graduate with just over $17,000 in debt, the organization reported.

More families are turning their focus to public colleges and universities, however, Connolly said; in Massachusetts, they tend to cost less than private institutions. Community colleges in particular have started to get more attention from prospective college students, she said.

“I think for too long, community colleges have had a stigma attached to them,” Connolly said, “but I’m starting to see that shift.”

Other education experts said the state’s new price incentivized transfer programs launching this fall, which will allow students even greater freedom to move between community colleges and state universities, should make low-cost, two-year schools an even more attractive option.

But even with cheap options available, the conversation isn’t any easier for families like the Molinas, who recently toured Northeastern University, where full-time tuition is just over $46,000 per year.

“(Sierra) loved it, of course, but it’s very expensive,” Ms. Molina said.

“We’re definitely shifting focus to state colleges. But those can also be expensive. We’re just very anxious about this process.”

MShields-Rutyna said anxiety is typical — “families panic,” she said — but can also be an impediment. Like several planners interviewed for this story, she said parents don’t always realize how many options are available to them to pay for college.

One of the worst side effects of that desperation, she said, is that some families may give up trying to save for college, figuring whatever they could put away would hardly put a dent in today’s typical tuition bill.

With college costs continuing to rise, financial planners, college officials and lawmakers are looking more to college savings accounts as a possible solution to the affordability problem. “Families are definitely not saving enough,” Shields-Rutyna said, but it’s not entirely their fault.

The state Legislature, for instance, is finally addressing one of the ironic quirks in a state that is known around the country for its prestigious and plentiful colleges: Massachusetts doesn’t offer a taxincentivized 529 college savings plan, unlike 42 other states in the U.S.

“We feel it’s a really important tool,” especially for middle-class families just above the cutoff for most need-based financial aid, said Richard Doherty, president of the Association of Independent Colleges and Universities of Massachusetts, which has lobbied legislators to change the law.

A bill that would make contributions to 529 plans tax deductible was voted favorably out of the Committee on Revenue last month and awaits action with the House Ways and Means Committee.

“I think there’s a tremendous amount of support for it,” Doherty said. “I believe there’s an awareness that this is something we’re out of step with with the rest of the country.

And it’s a way to bring private dollars into the college affordability discussion.”

According to a recent survey by Sallie Mae, a publicly traded corporation that originates private education loans, among other products, families are already starting to save more for college. For instance, 32 percent of a typical family’s college payments came from savings in 2014- 15, an increase of 5 percentage points since 2012-13.

Even a little amount makes a big difference, according to Mark Bilotta, president of Massachusetts Education and Career Opportunities Inc.’s board of directors and author of “Paying for College: Before, During and After (2016 edition).”

“Especially for lowincome families, establishing a regular practice of setting aside some amount of money on a regular basis is important,” he said. “The reason? Families that are saving change the tone in the home from ‘if you go to college’ to ‘when you go to college.’ The amount saved is less important.”

College officials and financial planners also pointed out that the costs at private colleges in some cases can be whittled down to public college-level costs through grants, scholarships and other aid, some of which is often offered by the colleges themselves.

“(The notion) that colleges are doing nothing, that’s not the case. There are all sorts of programs that try to make it easier for students to go to college,” said U.S. Rep. James P. McGovern, D- Worcester. “I think everyone’s trying to grapple with this. And at the end of the day, government has a role, too.”

Families aren’t waiting to see whether Congress will act. Even some college students are starting to realize they’ll need to think a little differently in the future — Joe Metrano, a sophomore architectural studies major at Holy Cross, for example, said he and his family have had to take out several loans to afford his education.

“I think in the future, if I have a family of my own, I will actually try to start a savings fund,” he said. “I would definitely do something different.”

Information from: Telegram & Gazette

(Worcester, Mass.), http://www.telegram.com

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