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Homeless college student ditches housing to afford tuition

Mandi Woodruff
Photo: Jake Stevens

Jake Stevens isn’t a typical college student. When the 19-year-old mechanical engineering major isn’t in class or working a full-time job at an automotive company, he spends most of his time worrying about where he’ll sleep next.

“It’s kind of stressful,” says Stevens, who grew up in Tampa Bay, Fla. “If I’m working really late at school, I’ll just take a nap in one of the computer labs or something. If I can get out early enough, I’ll go to a friend’s house.”

Even after he maxes out his federal student loan allotment, Pell grant, scholarships and the college fund his mother painstakingly built from the time he was in diapers, Stevens is still thousands of dollars short of meeting tuition requirements at his private Flint, Mich., engineering school.

His school of choice, Kettering University, is known for its unique curriculum, in which students alternate between two three-month terms in class and two three-month terms working full-time jobs in the field of their choice. Stevens earns $16 an hour (double the national minimum wage) and gets free housing from his employer while working. After each three-month stint on the job, he should be more than capable of affording an apartment back on campus. Instead, he has to save 90% of his pay to cover the next term’s tuition.

“I didn’t want to give up my dreams just because I couldn’t afford tuition,” he says.  

So he decided to cut the only expense he could — housing.

When saving isn’t enough  

Photo: Jake Stevens
Photo: Jake Stevens

From the time he was 12 years old, Stevens has been planning his career as a engineer.

His mother, a schoolteacher, made sure he knew his ambitions wouldn’t take him far without a proper education. So when Stevens wasn’t tinkering with household appliances and running rogue chemistry experiments out of the family bathroom, he was researching the best engineering programs in the country and bookmarking scholarship applications.

After years of research, Stevens finally settled on two top-choice schools – Harvard and Kettering University. Kettering, formerly the General Motors Institute, is known as a feeder school for both Stanford and Harvard’s graduate programs.

While Stevens packed his schedule with enough extracurriculars to rival any Ivy League hopeful, his mother opened a college savings plan in his name, along with funds for his three younger siblings. Even after the 2008 financial crisis all but destroyed her husband’s business as a commercial real estate investor, Stevens’ mother took on two part-time jobs and kept saving.

“We told him we’d give him as much as we could,” his mother, Gina Christian, says. “We want all of our children to go to college and be successful."

Stevens was waitlisted at Harvard but gladly accepted an offer from his No. 2 choice, Kettering. For his parents, who would have much preferred for Stevens to stay in state, it was a bittersweet moment.

His college savings fund would have been been enough to pay for tuition at a state school, but it covered only a fraction of the yearly $37,000 tuition at Kettering ($43,000 if he wanted room and board and a meal plan).While some parents could have offered to help by co-signing private student loans or taking out federal Parent PLUS loans to fill in the tuition gap, their credit was so badly damaged during the recession that they were unable to qualify.

Obviously, I do not want my son to be homeless, but at the same time I don’t know how else to help him,” Christian says. “He wants a school that’s $200,000 for four years. I don’t even make that in a year.”

To his credit, Stevens is pretty pragmatic about his living situation. He doesn’t have a car while he’s in school, so it’s important to find places to stay that aren’t far from campus , usually at a friend’s apartment. He stores his clothing in a friend’s basement during the months he’s working (his job is based in Kansas). Most everything can fit into a suitcase and backpack.

Knowing that friends wouldn’t always be available, he turns to his fraternity when he’s truly desperate for a place to crash. He is a member but hasn’t paid dues (about $2,000) since his first term.

“It’s definitely a bit rough considering I work full-time six months of the year and I have to hand it over to my school,” he says. “But it’s a blessing and a curse. Otherwise, I wouldn’t be able to afford school at all.”

Filling the tuition gap

National student debt has surpassed $1.2 trillion, with an average $29,400 debt load per graduate. Private college graduates arguably benefit from more generous financial aid packages than their peers at public institutions, but private tuition can be more than three times as expensive.

In 2013, private colleges charged $30,090 for annual tuition and gave an average of $17,630 in grants to students. Public universities charged about $8,890 a year and gave an average $5,770 in grant aid.

As the cost of college has risen, students and their families have increasingly turned to debt to bridge the affordability gap. Between 1989 and 2010, the number of households reporting student loan debt doubled (9% vs. 19%), according to the Federal Reserve Bank of New York.

Despite the risks of borrowing, evidence still supports the notion that a college degree is worth its weight in future paychecks. The average graduate stands to earn nearly twice as much in salary as someone without a degree.  

Kettering itself boasts a pretty solid track record for graduate success — 98% of graduates are either employed or accepted into graduate school within 6 months, a spokesperson says. The school’s financial aid office tries to help students from low-income families. When Stevens’ parents were denied a Parent PLUS loan, the school was able to grant him additional money in need-based grants.

“We have to work really hard with families and students so we have all the [financial aid] pieces in place so they can do well here,” says Kip Darcy, Kettering’s vice president of financial aid and enrollment communications. “And we do have students who end up being stressed in the process. Our objective is to mitigate that as much as possible.” 

Like many institutions, Kettering offers “need-blind” admission, meaning students aren’t denied or offered acceptance based on their reliance on financial aid. However, not all need-blind universities offer financial aid packages that meet 100% of students’ needs.

Chart: New America Foundation
Chart: New America Foundation

In a 2013 study by the New America Foundation, a nonpartisan policy think tank, researchers found private institutions routinely charge low-income students much more than their families can afford. Nearly two-thirds of 479 private institutions analyzed charged students from the lowest-income households (earning $30,000 or less) a net price of over $15,000 a year. What’s more, private institutions have increasingly turned to merit-based financial aid models, rather than need-based aid, putting low-income students like Stevens at a steeper disadvantage. Between 1995 and 2008, the number of students receiving merit-based aid nearly doubled -- from 24% to 44% -- while need-based aid remained flat (42% vs. 43%).

In some ways, the fact that Stevens has been unable to secure private loans for himself may be a blessing in disguise. Private loans typically have much higher interest rates and worse repayment options than federal student loans.

“Everyone in school seems to joke about [their debt],” he says. “They’ve been able to take out loans and some of them will graduate with $100,000 in debt and they don’t even know what they’re paying.”

If anything, his situation has been a free crash course in financial planning.

“I use Mint.com all the time,” he says.  “And I’ve gotten pretty creative [to earn extra income].”

Stevens figured there had to be other students who were feeling just as cash-strapped as he was.  So he bought a few dozen cheap T-shirts, had the phrase “I Am Massively In Debt’ printed on them and sold them for $10 each on campus. He was wearing one when he paid the balance of his second term’s tuition — $3,350 worth of single dollar bills, delivered in person.

I sold out [of the shirts] by the end of term,” he says. “It was my way of silently protesting the cost.”


Do you have a story to share or a personal finance question to ask? Send us an email at YFMoneyMailBag@yahoo.com.


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