The Class of 2012’s college dreams are being battered by a perfect storm of skyrocketing college tuition and fees, tightening credit, and diminishing federal aid that is even making public universities a strain for recession-battered families.
“We’re seeing a lot of kids in tears,” said John Garofalo, guidance director at Silver Lake Regional High School in Kingston. “Kids feel like, ‘Jeez, I did my part, so how come I can’t go?’ Some parents are saying, ‘We’ll cover year one, and take it from there,’ but a lot of other kids are looking to start out at community college for a few years.”
It’s called the higher education bubble, and like the real estate and stock market bubbles before it, experts say that after nearly four years of recession, it’s at the bursting point.
“When everything hit in 2007 and 2008, families were completely overwhelmed, and they’re still concerned, and overwhelmed,” said Martha Savery of the Massachusetts Educational Financing Authority, which advises up to 25,000 families a year on college costs. Savery said she is seeing more families turn to cheaper community colleges, with plans to transfer to a university later.
“Things cost so much more than we ever expected,” said Ron Cronin, a postal employee from South Weymouth, whose son Michael and daughter Michelle are both college bound. Michelle will commute to Bridgewater State College; by foregoing dorm life at a more prestigious university, her family is only on the hook for $7,753 a year. Her brother Michael “insisted” on going to the University of New Hampshire for $38,022 a year, where he plans to study accounting — despite the risk of running up a high five-figure debt burden, his mother said.
“He said, ‘I’ll take on all this debt’ ’’ Maura Cronin said. “He says it’ll be worth it in the long run, but I’m worried about him. People have suggested that maybe he should hold off a year, but just the thought of that would crush him.”
Some federal grant programs have been level-funded since 2007 and others eliminated entirely, according to the National Assocation of Student Financial Aid Administrators. Student loan debt nationwide is now estimated at more than $1 trillion, as students have turned to expensive private loans to cover soaring college costs.
University of Tennessee law professor Glenn Reynolds, author of “The Higher Education Bubble,” said the strains on the system are starting to tell: “People are reluctant to go into debt, and that’s always the first thing that happens when the bubble bursts.”
Bay State universities counter that business is still booming, though they acknowledge a growing strain on the system.
Northeastern University boasted 44,212 applicants for 2,800 seats, a record high for the $55,533-a-year school. But Northeastern, like other private universities, reports that with less federal aid available, it is dipping into endowment funds at a record level so that students can afford to attend.
The University of Massachusetts at Amherst, which now costs roughly $25,000 a year and just announced a nearly 5 percent fee hike, received 34,700 applications for 4,500 slots, but officials note an uptick in those opting not to attend one of the least expensive nationally-ranked universities.
“At UMass-Amherst, we are making offers this year to students from our waiting list. Last year we did not do this,” UMass-Amherst spokesman Ed Blaguszewski said in a statement, in which he cited competition with other top schools and noted waiting list applicants have been taken in past years.