January 30, 2011
When Life Gets in the Way of Paying for College
Bad luck exposes cracks in one family's financial foundation
Kelvin Ma for The Chronicle
Diane Schillinger, a freshman at the U. of Massachusetts at Amherst, sorts through loan forms and other paperwork. She always expected to go to college, though her plans for paying for it were hazy. "We'll manage to find something," she says.
By Beckie Supiano
Amherst, Mass.
In many ways, Diane Schillinger is having a wonderful freshman year. She quickly learned her way around the sprawling campus of the University of Massachusetts here: where to go for fun, which dining halls offer the best meals. She aspires to be a veterinarian and has made good grades in her science-heavy coursework as a biochemistry major.
But not everything has been going well for Diane. Both her father, a painting contractor and handyman with a high-school diploma, and her mother, a registered nurse with an associate degree, lost their jobs in 2009, and Diane, the youngest of five children, has had trouble finding the $23,000 she needed to pay for her freshman year. She has found the student-aid system a lot harder to navigate than the campus.
Diane entered the university in the fall with enough scholarships and federal loans to cover about $10,000 of the tab for this year. Piecing together the rest took months of paperwork, phone calls, and frustration, and she ran into more than one dead end.
Enlarge Image Kelvin Ma for The Chronicle
Diane Schillinger goes over some financial-aid information with her father, Mark, at their home in Easton, Mass. "My philosophy always was go to the best school you can get into," he says.
Kelvin Ma for The Chronicle
Diane Schillinger goes over some financial-aid information with her father, Mark, at their home in Easton, Mass. "My philosophy always was go to the best school you can get into," he says.
Enlarge Image Kelvin Ma for The Chronicle
Kelvin Ma for The Chronicle
By November, Diane had found a loan to cover the rest of her bill. But she couldn't register for spring classes until the money was in her account, and in the meantime, some classes filled up. As the fall semester came to a close, Diane was on a wait list for her chemistry class and couldn't find an open biology lab that fit her schedule. And she was on track to borrow more than $18,000 for her freshman year alone.
Diane and her parents have always assumed that she'll get a college education, just like her sister and brothers. Her mother and father, she says, "figured they made it so far, but we can make it farther." But the Schillingers' fourth child, Jim, a senior accounting major at Western New England College, has also had trouble paying for his education. Their middle child, Andrew, unable to find a job since graduating last spring from Northeastern University with a computer-engineering degree, is living at home with them in Easton, Mass.
Andrew and his oldest sibling, Dan, who both completed five-year programs at Northeastern, borrowed more than $150,000 each to pay for college—leaving them with current balances that more closely resemble a home mortgage than the typical amount of undergraduate debt. And while the second-oldest Schillinger child, Mary, borrowed much less to go to Brandeis, about $90,000, that's still more than three and a half times what the typical undergraduate with debt takes out in loans.
Not long ago, the Schillingers were living on something like $100,000 a year. Recently, they have had to get by on about half that, plus $20,000 pulled out of retirement funds. Many families are worse off than the Schillingers and, since the economy tanked in 2008, colleges have been besieged with pleas for more student aid—requests that they cannot always meet.
The Schillingers know they could have done more to plan for college costs. But their recent struggles show how parents with every expectation of seeing their children through college can quickly exhaust their options for footing the bill.
A False Impression
Diane has a warm smile and long brown hair she wears in a ponytail. She gets along well with the neighbors in her high-rise dorm and has become especially close with her roommate, Jessie Prucnal. But over dinner on a December evening, the two women say they didn't get off to the most auspicious start.
When Diane got her roommate assignment and sent Jessie a friend request on Facebook, Jessie, who grew up on a farm, wasn't sure what she was in for: Diane's profile picture showed her in a stunning red dress, standing next to a uniformed Marine in front of a limo and a big house. As she looked at Diane's profile and talked with her on instant messenger, Jessie learned that Diane's family owned horses and a second home. She thought Diane was rich and wasn't sure they'd get along.
Jessie's impression wasn't quite right. Diane did get a nice prom dress and is dating a Marine, but the house in the background is across the street from her family's smaller home. And while the Schillingers do own horses and a house in Florida, they were purchased at a time when the family's situation was looking very different.
It was not long ago that the Schillingers felt secure enough in their income to find those expenses reasonable. Diane's mother, Pat, was making good money as a nurse: about $90,000 a year. She was working toward a bachelor's degree, which would increase her earning power further. Since the children were young, the Schillingers have lived in a family-friendly neighborhood in Easton, on a street where every house seems to have a basketball hoop. Their own home is modest, with five bedrooms, some of them quite small. Two are in the basement, which Diane's father, Mark, finished himself after the family moved in.
The Schillingers bought their house in Port Saint Lucie, Fla., in the early 2000s. They thought it would be a good place to retire, and in the meantime, they could rent it out. About the same time, Ms. Schillinger started buying horses for herself and Diane. They now own five.
College for the kids was always in the picture. Pat and Mark believe deeply in the value of higher education. "I always thought," Ms. Schillinger says, "especially when they were young, if you go and get a degree, then when you go for your job you'll start at a decent pay and you won't be scrounging, and you know you'll be able to get somewhere."
She and her husband also wanted their children to go somewhere with a good reputation. "My philosophy always was, go to the best school you can get into, no matter what it costs, because that school's going to do the talking for you," Mr. Schillinger says.
But they did not have the most realistic idea of how those college educations would be paid for. Back when the kids were little, the Schillingers made efforts to save for college, but other expenses came along and drained those savings. So even when the family was in a stronger financial position, they planned to finance their children's college educations primarily with loans.
Ms. Schillinger felt that having her children pay for their own college was probably in their best interest anyway. She had friends who paid for their kids' college, she says, and the kids partied and dropped out. If her children had their own loans, she figured, they would take greater pains in their studies. She and Mr. Schillinger would help by paying for clothes, groceries, and other noneducational expenses that came up.
But she didn't know how much debt that would mean for her children. She had earned her associate degree while working and raising her kids—without borrowing. "I never realized how much—I'm thinking 20, 30 thousand—I never realized how much college costs until Dan graduated," she says.
While the older children have heavy debt burdens, their parents were at least able to help them by co-signing private loans and borrowing parent ones—two options they no longer have. Ms. Schillinger says she never imagined their credit would be too poor to do that for Jim and Diane. In fact, she says, she even hoped she would be able to help her children pay off their loans after they graduated. "It's not fair to them that they're the last two," she says.
Loans Denied
In 2009 the family's finances began to unravel. Mr. Schillinger, now 57, needed shoulder surgery that February, and his employer told him it could not keep his job as a handyman open. About nine months later, Ms. Schillinger, 56, lost her job, just before a double mastectomy to prevent a return of the breast cancer she had beaten a few years before. Her recovery was complicated, and for the next year she was too sick to look for a new job.
Diane's brother Jim, a slight young man with tousled hair, was a college junior when the family's fortunes declined. The Schillingers appealed to the college for more financial aid, and got some, but Jim still faced a gap. In December 2009, Ms. Schillinger took as much as she could from her retirement account, about $40,000, to cover that balance and pay some other expenses, but after paying penalties and a loan she had taken out for her daughter Mary's wedding, she was left with only about half as much.
For most of 2010, the family lived on that sum, along with Mr. Schillinger's unemployment and Ms. Schillinger's yearlong disability payments of $3,000 a month. By this time they had stopped paying the mortgage on the house in Florida—the home is rented out, but that income doesn't cover the mortgage.
Over the summer, Diane applied for a private loan but was denied. She also filed an appeal asking UMass for more financial aid, showing that her family's income was lower than would be expected from its 2009 tax return. In October her appeal was denied.
"We regret to inform you," said a letter to her parents explaining the decision, "that after careful consideration, we have decided that the information provided in your request did not lower the expected family contribution low enough to award a federal pell [sic] grant which this year is all that we have been able to award as there are many more needy families." In November her mother's disability ran out.
UMass officials say they will not comment on a specific student's financial aid, but like many colleges around the country, the university has seen a big increase in financial-aid appeals thanks to the weak economy. "Last year was probably the biggest increase in appeals that we saw," says Suzanne Peters, director of financial aid, "and I think what we're seeing now is families are still in crisis, they're still unemployed."
UMass has increased what it spends on financial aid, but there still isn't enough money to go around, even for the neediest families. And despite their troubles, the Schillingers are not among the neediest.
In October, Diane's father had applied for a federal parent PLUS Loan. The Schillingers expected that application to be denied; their poor credit history had already kept them from getting such a loan for Jim. But the government allows students to borrow more federal loans if their parents are denied a PLUS, so when the expected rejection came through, Diane was able to get an additional $4,000.
Still, she was nearly $9,000 short for the year, and it was almost time to register for classes. Finally her father suggested she try what had finally worked for Jim after he had been turned down for eight or nine private loans: asking their 86-year-old grandfather to cosign for an alternative loan from the Massachusetts Educational Financing Authority. That worked. It was too late for her course-selection slot, but at least Diane's bill was finally settled.
Diane's greatest worry, bigger than paying for college, has been what might happen to her family. Her parents have always avoided talking about their problems with her. "You just never think of what's going to happen next," she says. "I guess I think the worst is losing everything."
As the baby of the family, Diane has four older siblings to turn to for advice. But that doesn't mean she'll take it. When she was looking at colleges, she knew paying the bills wouldn't be easy.
Jim encouraged her to start at a community college, save some money, and then transfer, but Diane didn't want to. She knew she wanted to major in biochemistry and start taking her science classes right away. She also believed she'd need every possible advantage to get into veterinary school. And she wanted the experience of living on campus, away from home. After all, each of her siblings had done that. Diane shared the family optimism: "We'll manage to find something," she thought.
Diane did not try to get a job her first semester, so that she could focus on adjusting academically. She has saved some money by renting her textbooks and says she might try to get them online in the future. And her group of friends is good at having fun at no charge, she says. They have taken advantage of free activities the university puts on, like pumpkin carving at Halloween.
Diane also thinks she was being practical by choosing UMass rather than the more-expensive private colleges her older siblings attended. At first she had wanted to go out of state. But her marks on a state test were high enough to qualify for the John and Abigail Adams Scholarship Program, which covers the cost of tuition for Massachusetts residents at in-state public colleges. As Diane is quick to point out, the scholarship is not as great as it sounds— tuition at UMass is dwarfed by fees, and her scholarship came to only $1,714 for the year.
Diane also looked for outside scholarships, but the only other free money she ended up getting was from UMass. She had a good strategy, even if it didn't all work out: "You apply for the ones that you can and get the money you can," she says, "and just try to take as small amount as I possibly could out in the loan."
A Frustration, a Mystery
Sitting in their living room on a cold December morning, Diane's parents are still coming to terms with the vulnerability of their situation. Their belief that everything will work out persists, but it is obvious that they are overwhelmed.
The couple readily admit they have not always made the best financial choices, and they are both confused about some aspects of their affairs. But they always thought they would be able to work. "We've never been in a situation like this," Ms. Schillinger says. "We've always had money coming into this house."
As she and her husband contend with the financial decisions they made in the good days, cutting down their expenses is no small feat. They now owe more on the Florida house than it is worth and are trying to arrange a short sale. "I don't have a choice," Mr. Schillinger says. As for the horses, Ms. Schillinger is very reluctant to sell them. Besides, she says, with the economy so bad, it would be almost impossible to find good buyers. "If you go to an auction for a horse and you bring a trailer, ... your trailer is filled because people are abandoning these animals."
Some of the Schillingers' horses are used in lessons and leased by other riders to help earn their keep. Still, they end up costing about $1,000 a month. "I do have a very expensive hobby," Ms. Schillinger admits.
Although Diane is the fifth child the Schillingers have sent to college, the financial-aid process remains a frustration and a mystery to them. Mr. Schillinger, who only recently learned to use a computer, consults reams of binder-clipped papers to answer questions about the family's finances: previous years' taxes, Jim's financial-aid forms, paperwork from Ms. Schillinger's old job. But getting to the bottom of it all seems impossible, even with the help of a cousin with a background in insurance and finance, even with repeated calls to Diane's university.
UMass officials say they do a lot to inform families. "The campus does a range of things to educate students both before they come and when they're here," says Ms. Peters, the financial-aid director. "It's printed pieces we mail directly to students, through the Web site, face-to-face orientation sessions over the summer to help educate the family about the financial-aid process." And "the office is available for parents and students to come by anytime."
After getting a flier in the mail from a company called College Planning Strategies, Mr. Schillinger went to its presentation at a local high school. For a fee, the company helps families navigate the financial-aid process. The main tip the company divulged at the meeting, he says, was to apply early for financial aid.
The family's expenses and debts, Mr. Schillinger says, are "like an anchor around my neck, and I'm drowning. What can I do? I don't know what the answer is to a lot of it, and I'm really discouraged about the whole thing."
But despite everything—the difficulty of finding a way to pay for Jim's and Diane's educations, the debt that all of the children face, Andrew's not finding a job despite months of looking—the Schillingers maintain their belief that their kids will benefit from going to good colleges. When they learn that Jim suggested Diane try a community college, both Mr. and Ms. Schillinger are baffled.
Back to Work
Since that December conversation, things have started to look better for the Schillingers. Out of the blue, Diane got a letter from UMass breaking down her student aid, including an $800 grant she'd known nothing about. A footnote on the letter said, "You have been awarded a one-time Financial Aid Grant in response to your appeal for additional financial aid." No other explanation was provided, but Diane's bill is now settled and shows an $800 credit. And after repeated efforts, Diane was able to line up a full schedule for the spring semester.
Her father has healed from his surgery, and he is looking for work. Her mother recently landed a new nursing job, scheduled to begin in early February. She will work the night shift, which pays the best. The job doesn't guarantee how many hours she can work, she says, but she expects to make about what she did before. And once she is back on track paying her bills, Ms. Schillinger plans to resume taking classes for her bachelor's degree. She hopes that can happen this summer.
The new job is a big step in the right direction for the family's financial health, and one they needed to take. After all, Diane still has three more years of college to pay for, to say nothing of veterinary school.
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