University of Hawai'i graduate student Nolan Kido says he's lucky "Granny" loves him.

"She allows me to live in her basement so I can afford to eat," said Kido, 29, of 'Aiea, who is in his second year pursuing a doctorate in accounting at UH-Manoa.

He relied on scholarships to pay for his undergraduate studies at UH but couldn't go for a master's degree and doctorate without borrowing.

"Unless you have outside money, I can't see how you would graduate on the graduate-student level without debt. It's almost universal that you have to take out loans," Kido said.

Rising tuition and living costs are squeezing college students while a declining economy is reducing parents' ability to help.

College officials in Hawai'i said they expect more students to seek financial aid as the recession takes deeper root.

"We saw a rush of students with the layoffs and closings of ATA and Aloha airlines," said Francisco Hernandez, UH-Manoa vice chancellor for students. "We expect more of that as the economy shrinks and access to investments decreases, and parents are no longer able to rely on borrowing on their homes. We expect them to come searching for more assistance in grants and scholarships."

The Project on Student Debt said the class of 2007 graduated from Hawai'i colleges with an average debt of $14,911, up 6 percent from the previous year. That debt load is second-lowest in the nation, behind Utah.

The same report also showed that Hawai'i had the lowest percentage of college students graduating with debt, at 34 percent.

Hawai'i students' default rate on federally subsidized loans also has been low: 4 percent in fiscal year 2006 compared with the national rate of 5.2 percent, according to the U.S. Department of Education.

The low debt numbers can be attributed in part to bargain tuition at the University of Hawai'i system, according to Hernandez. Other reasons are that local students can commute to campuses rather than pay for student housing, and that part-time attendance allows students to pay as they go, taking only the number of credits per semester they can afford.

FREEDOM FROM DEBT

UH-Hilo student Kendra Tidwell, 21, of Puna, said she is determined to avoid borrowing to pay for college. That means working 30 hours a week at a grocery store while taking a full load of classes, living at home "and pretty much no social life."

Tidwell, a communications major, won a four-year chancellor's scholarship but will have to pay for her fifth year before graduating in 2010, so she's already saving for that.

"I really want to graduate debt-free. If I could work more, I would but I have to have a full-time class schedule to keep my scholarship," she said.

Despite scholarships, Katie Kamelamela, 25, of Waimalu, graduated from UH-Manoa this summer with bachelor's degrees in botany and Hawaiian studies, and $20,000 in student loan debt.

Even with the money she's making this semester as a botany graduate student and teacher's aide, she is coming up short.

"I wasn't sure about where I was going to be living, and I took out loan money for rent. And we have to pay lab fees and for projects and paper and ink, and all these unforeseeable costs. I just had to pay $300 because my computer screen broke," Kamelamela said.

With salaries in her field at only about $30,000, she isn't confident about being able to make her loan payments when the time comes.

"I don't really see me having a job after this that's going to make it possible for me to pay off my loans. It costs more than that just to live in Hawai'i," she said. "I don't really know what's going to happen."

In the meantime, "I'm going to apply for as many scholarships and grants as I can to offset my college costs."

Amber Spaulding, 23, of Soldotna, Alaska, will have $66,000 in student loan debt when she graduates from UH-Hilo in December. "My mom's disabled, so there was no other way to pay for school," Spaulding said.

She will likely rack up more debt when she attends graduate nursing school at UH-Manoa.

"I know I'll be able to get a job, but I'm still not sure what the monthly payments will be and whether I can afford it."

FAMILY LIFE DELAYED

Looking ahead to the loan payments he'll begin making when his studies are over, Kido said he is resigned to having to start his career on the Mainland.

"It would be impossible to start a family and settle down and buy a house in Hawai'i until you've been working for 20 years. It's something I don't think is realistic."

Graduate students in his field work for the university in exchange for tuition waivers and a stipend of $12,000 to $14,000, he said. Kido estimated that graduate students need an additional $8,000 to $12,000 a year to cover living and job-hunting expenses.

For many graduate students looking ahead to careers as college professors, it's essential to attend Mainland conferences and other networking events, he said.

"The main issue for us is not the cost of living in Hawai'i but that it costs a lot of money to get a job in our field. You have to go to conferences to even have a shot to get an interview," Kido said.

Students often finance those trips using credit cards, accumulating even more debt.

Carrying a large debt also can affect career decisions, he said. Kido said he knows medical students with debt exceeding $100,000 who feel pressure to pursue more lucrative specialties to pay off their student loans instead of becoming lower-compensated family practitioners.

"It really affects your choices when you start your career if you have debt when you get out of school. In my field of accounting, there are lots of government opportunities where you can prevent things like Enron, but the private sector pays twice as much," he said.

Hernandez said UH will be increasing its financial aid staff to address the expected increase in demand and will try to raise more money for scholarships, earmark more tuition dollars for aid to needy students, and lobby for expanded federal tuition aid.

AID IS UNDERUSED

Amy Takiguchi, associate director of financial aid at Chaminade University, said parents and college students will have to work harder to investigate the numerous scholarship and financial aid programs that remain available, many of which are underutilized.

"There are still a lot of scholarships and aid available. It's on the students and parents to take the time to do the research and find scholarships they may be eligible for and do the applications," she said.

Takiguchi also advised against automatically dismissing private schools, such as Chaminade, with higher sticker prices.

"Even though the initial tuition figures of private colleges seem more than public schools, once you consider the mix of scholarships, special discounts and endowments, the figures are quite good in comparison," she said.

Chaminade, for example, offers incoming freshmen substantial discounts based on their high school grade-point averages.

Hernandez said parents should file financial aid forms early, attend workshops and "aggressively" pursue information on financial aid opportunities.

"Think about it as an investment. Every dollar they get from a scholarship or grant or a loan point savings can be quite a bit of money," he said.

For those who must take out student loans, both Takiguchi and Hernandez said to borrow only as much as you need.

"Most important is to maximize the loan by taking as many courses as you possibly can during the time that you have borrowed money," Hernandez said. "Use it wisely for tuition and real education costs, and not for living enhancement costs. This money is not so you can have a better iPod. It's for tuition and books, and you need to get the most out of it."

Although the prospect of financing a college education can seem overwhelming, he said, parents and students should keep in mind the ultimate reward.

"They should consider not whether they can afford to attend higher education, but can they afford not to. This is the time to invest in a degree and in the job at the other end of the degree," he said.