University of Minnesota senior Spencer Anderson is taking time from his studies to oversee a small scale brewery with his identical twin brother, Colin, in their parents' Plymouth garage. The home beer-making operation involves sophisticated homemade equipment and intricate temperature and timing controls.
It's a hobby that appeals to Spencer's apparent interests in chemical engineering--his area of study--business, and college social interaction. As he clears big containers of fermenting liquid from the driveway, Spencer expresses his gratitude to his parents for paying for his undergraduate degree so he was able to zero in on his education and have some free time.
"It was nice they were so willing to help out with it. A lot of my friends have to get jobs all the time they always worried about loans. I didn't really ever have to worry about that. So it helped me focus on school and it allowed me to live a fun life while I was at school," he says.
It's always been important for students to be credit conscious but even moreso now.Annette Collins, assistant financial aid director for St. Mary's Unniversity
Spencer and Colin's father, Marc Anderson, wants his sons to have an educational experience unencumbered by finances because that wasn't the case for him and his wife, Elaine.
"It was important from our observation that our children have opportunity to go to one place with a four year building education with relationships that perhaps would go on the rest of their life," Marc Anderson said.
The Andersons income was too high to qualify for grants so they borrowed against their house to put Spencer through the U of M, where tuition and fees are now around $10,000 a year and Colin through Carlton College, with an annual tuition of $36,000.
But then Marc lost his job as a housing developer in November when new housing construction ground to a halt. He's piecing together real estate and mortgage broker work where he can to pay the bills. "Even though the economy's down we've got to be creative, we've got to be coming up with new ideas looking for opportunities to keep the cash flow up, because we have to pay off these loans," he said.
Elaine Anderson expresses slightly more worry about their situation than her husband.
"I am concerned how much debt we are in as parents--how much debt we're in for their education," she said. "Now, because the economy has turned down. Paying it back appears much more ominous than it did even one year ago."
Both Marc and Elaine say if they had to do it over, they would have saved more money for their sons' educations beforehand so they wouldn't have had to take out so much in loans.
As work becomes more scarce and the student loan market tightens, experts--like St. Mary's University assistant financial aid director Annette Collins--advise families to think carefully before they borrow.
"It's always been important for students to be credit conscious but even more so now. Being an informed borrower, doing that comparison shopping with the lenders and also really creating a plan for their educational needs--borrowing only what they need for school," Collins said.
Collins also urges students to shop around for deals. Some lenders of federally-backed Stafford loans offer to cover fees or other incentives like reducing the loan principal after 36 consecutive payments.
"The loan limits are the same, the interest rates are the same but the benefits that they offer, like say the origination fee or the guarantee fee, that is something that a lender can choose to cover for a student," Collins said.
Financial aid officials also warn borrowers to not take on more than their long range earning potential.
In the Andersons case, Spencer is entering the working world but is holding open the possibility of getting an MBA. Colin has been accepted to medical school. He plans on being a surgeon. Their parents say the boys will need to cover any additional education costs themselves.