60 and Still Not Out of Student Loan Debt: Seniors Facing $36 Billion in Loan Debt

[Dave_Berry]

"Student loan debt is usually thought of as a young person’s problem. Those who earned their degrees in 2010 graduated with what was then a highest-ever average of $25,250 in student loans, and considering that education costs are rising, the jobs market is especially bad for young people, and parents feel less able to help pay for their kids’ college nowadays, student loan debt can only get bigger. It’s not hard to imagine a future in which an alarming number of Americans still aren’t out of student loan debt even as they become old enough to collect Social Security. ...

... The data indicates Americans ages 60 and over collectively owe $36 billion in student loans. About 5% of the $85 billion delinquent student loans in the U.S. is owed by borrowers ages 60 and over, and another 12% of the total is the responsibility of Americans ages 50 to 59. In some of these delinquent situations, Social Security checks are garnished in order to pay off student loans. ..."

Yikes.

Seniors Still Paying Student Loans | Moneyland | TIME.com

[sax]

I wonder how much of the student debt is counted twice: once by themselves and again by their parents or grandparents.

I do not doubt that there will be forgiveness for these loans and in the long run we will all pay for the loans of a few. Obama already has the 10% of your income for 20 years and then forgiveness law in place.

http://www.huffingtonpost.com/kaitly...b_1381460.html

"....The president has also lowered the cap on the yearly income percentage college graduates have to pay back. Starting this year, students will not have to make loan repayments of more than 10 percent of his or her yearly income. The repayment cap previously was 15 percent. Students will also be eligible for loan forgiveness after 20 years of repayment rather than the previous 25-year requirement. Workers in public service such as teachers, nurses and members of the armed forces are eligible for forgiveness after 10 years of consistent repayment. Students taking out loans in 2012 will also be able to consolidate federal loans at a lower interest rate. In addition to trying to ease the burden of student borrowing, the president has also allowed young adults to stay on his or her parent's insurance plan until age 26 under the Affordable Care Act. With an unstable job market where work is scarce, it is a comfort for many college graduates to know they will not have to scramble for health care coverage, or worse, go without health care...."



Once again those who postone what they cannot afford (expensive college educations and more house than they can financially handle) will be punished by the free spenders "for the common good."

The law of supply and demand would work if we allowed it to. If enough people cannot afford homes then the prices will drop until they can. If enough people cannot afford college educations the prices will drop to get students into the colleges.

As long as people can take out huge loans the prices will not drop.

[LadyHam]

Sax said: "Once again those who postone what they cannot afford (expensive college educations and more house than they can financially handle) will be punished by the free spenders "for the common good."

The law of supply and demand would work if we allowed it to. If enough people cannot afford homes then the prices will drop until they can. If enough people cannot afford college educations the prices will drop to get students into the colleges.

As long as people can take out huge loans the prices will not drop."

I do agree w/you that if people refused to spend the money on expensive college educations and expensive houses, then the prices would eventually go down. You also stated that those that aren't willing to pay for that now will suffer, and I agree w/that, too. However, it really sticks for those that have children that want to go to college now and get their degree from that expensive, prestigious school. I guess these kids are the sacrificial lambs for the kids that will go to college 10, 20, 30 years in the future. What's the solution for the kids that want/need to go to college now? I don't have the answer, but there has to be a better solution than what is happening now. Our oldest is a junior in high school, and in less than 2 years she will be at college. We have been saving in a 529 plan since she was a baby, but it is still not enough, even for a state flagship. We will have to send her to college w/the 529 plan, loans, and really cutting back for the years she is in college to help pay for expenses. If any merit scholarships get thrown in the mix, then that will be a wonderful bonus, but it is certainly not something that we are counting on. Then we have 2 more kids right behind her.

A little bit off topic, but the price of college is just getting ridiculous. I graduated from Purdue in 1989 and went there as an OOS student. My parents were able to pay for my college education. It was not easy, but it surely wasn't the tremendous sacrifice it seems to be today. My dad had a really good job, but not a better job than my husband has today. There is no way we could outright pay for Purdue OOS for our daughter, which is about $40,000 a year. My dad even told me the other day that he does not think he could afford to sent his children to college if the prices were this astronomical back when we all went. He sent 3 kids through and paid 100%. It was a tremendous gift to all of us. I went to Purdue, 2 of my siblings went to small, private colleges instate, and one sibling went to one of the service academies. He didn't have to pay for any of that, which did make it easier to pay for his other 3 children. I worry about what things are going to look like when my children start having children and they think about going to college. Something has to give here.

Our state flagship is UIUC which is around $30,000 a year instate. But, even smaller schools in Illinois like Northern Illinois University and Illinois State University are priced pretty high, imo. NIU is $26,000 a year and ISU is $22,000 a year, which is a lot less than some schools. But even at ISU, 4 years could cost you $88,000 for a degree. What if you have more than one child to send to college? Even at $22,000 a year, you'll pay around $176,000 for 2 children to go there, $264,000 for 3 children to go there. This is just a conservative estimate because the price is going to be even higher than $22,000 a year for children 2 and 3. What if this reasonably priced school doesn't offer the major your child wants to major in? I know kids can go to CC and transfer to a bigger university down the road, but in doing so, I think one can miss a big part of the whole college experience by not being there all 4 years. My husband has a good job and we have been very conservative in terms of our house, our cars, vacations, etc. But you have to live, too. If you just scrimp and save your whole life just so you can one day send your own children to college, then what was the point of working so hard to get your college degree if you can't even really enjoy life? I just seriously think it really stinks to be part of the middle class. There just is no help for us. Okay, off my soapbox now. )

[MiamiDAP]

Just do not take student loans. They are very expansive. Go to college that you can afford and better yet go for free. Options:
-Merit Scholarships
-Employer foot the tuition bill and possibly some books

Our family used both. We paid only for one BA out of 4 + 2 MBA's. No loans, which allow us to pay for D's Med. School (there were other planning for that, like NO DEBT at all, no mortgage, no car loans).

Our approach to everything, goods, services, whatever: purchase only what you can afford. Why not?

[BCEagle91]

13% of Americans are 65 or older (2010 US Census). 13% of 300 million is 39 million. On average (we'll use >= 65 as a very conservative approximation to >= 60), those 65 and older have $1,000 in student debt. Is that a crushing amount?

[kayf]

BC, its not the averages. Its crushing to some individuals.

[BCEagle91]

> its not the averages. Its crushing to some individuals.

I know that. I've mentioned that several times. But it illustrates why $36 billion is a meaningless number.

[kayf]

36 Billion is NOT meaningless, imho. It clearly indicates a problem out there, if that much debt is still owed by seniors.

[Hunt]

That article is misleading, I think. It doesn't make clear how much of that debt is the senior's own student debt, and whether it was incurred back when they were college age or much later. If people are borrowing money to get more education when they are in their 50s and 60s, that's not really a crisis. And if it includes loans that grandparents take to help fund their grandchildren's education, that's not necessarily a crisis either.

[BCEagle91]

> 36 Billion is NOT meaningless, imho. It clearly indicates a problem out there, if that
> much debt is still owed by seniors.

I'm sure that it is a big problem for some seniors. The question is: what percentage?

> It doesn't make clear how much of that debt is the senior's own student debt, and
> whether it was incurred back when they were college age or much later. If people
> are borrowing money to get more education when they are in their 50s and 60s,
> that's not really a crisis. And if it includes loans that grandparents take to help
> fund their grandchildren's education, that's not necessarily a crisis either.

The source is Equifax so they have the loan information but it would probably be a lot
of work to figure out who the educational benefit actually went to.

[wis75]

Back in my day (older sister just turned 60- gulp, my turn is coming next year) tuition, room and board and other expenses were so much cheaper at public U's relative to minimum wages and other costs. We had no debts with minimum wages in the $1.85 range (my UW tuition was 10X my mother's and son's around 10X mine- rest of economy didn't increase 10 fold with the generations). Now even those who choose their cheapest options are likely to incur debts.

The article does address the issues of when and for whom the debt is incurred. The problem is the economy and that the debts, whether old or new, can't be forgiven or otherwise restructed even in the face of job loss, etc. The total amount means it is a large enough number to impact society.

[MathildaMae]

I would be interested to know whether the same people who have "crushing" student loan debt also have "crushing" credit card debt and "crushing" mortgage payments. Is it student loans that are the problem (that is, do otherwise responsible people borrow too much for an education) or is the problem just irresponsible borrowers, who would have too much debt even without student loans.

[BCEagle91]

Get me the database and I'll slice and dice it for you.

[Kajon]

I found the link to the version I read yesterday - written by Yuin Mui of Washington Post 4/1/2012 http://www.twincities.com/ci_2030482...-student-loans

Barnett, 58, of Illinois thought she was doing the right thing when she decided to pursue a master's degree in clinical psychology in the late 1980s.
She took out a loan of about $21,000 to pay for graduate school. But even after earning her master's, Barnett struggled to find a job that paid more than $25,000 a year and soon fell behind on payments. She suffered through a layoff and her loan debt ballooned to $54,000.

Barnett filed for bankruptcy in 2005, but she couldn't get out from under her student loan debt. A collection agency began garnishing her wages from her full-time job, and money is so tight she must choose between buying gas and buying food.

"I'm working for nothing," Barnett said.

I certainly don't know her full story, but it seems like she should have considered looking for a job outside of clinical pysch

[MathildaMae]

I certainly don't know her full story, but it seems like she should have considered looking for a job outside of clinical pysch

But we don't know the quality of the program she took out the loan to complete, or the quality of her other qualifications.