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

Parents Forum
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<p>"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. ...</p>

<p>... 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. ..."</p>

<p>Yikes.</p>

<p>Seniors</a> Still Paying Student Loans | Moneyland | TIME.com</p>

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

<p>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.</p>

<p><a href=“HuffPost - Breaking News, U.S. and World News | HuffPost”>HuffPost - Breaking News, U.S. and World News | HuffPost;

<p>“…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…”</p>

<p>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.” </p>

<p>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. </p>

<p>As long as people can take out huge loans the prices will not drop.</p>

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<p>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.”</p>

<p>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.</p>

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

<p>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.</p>

<p>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.</p>

<p>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. :o)</p>

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<p>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</p>

<p>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).</p>

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

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<p>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?</p>

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<p>BC, its not the averages. Its crushing to some individuals.</p>

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<p>I know that. I’ve mentioned that several times. But it illustrates why $36 billion is a meaningless number.</p>

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

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<p>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.</p>

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<p>I’m sure that it is a big problem for some seniors. The question is: what percentage?</p>

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<p>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.</p>

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<p>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. </p>

<p>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.</p>

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<p>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.</p>

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<p>Get me the database and I’ll slice and dice it for you.</p>

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<p>I found the link to the version I read yesterday - written by Yuin Mui of Washington Post 4/1/2012 <a href=“Senior citizens continuing to bear burden of student loans – Twin Cities”>Senior citizens continuing to bear burden of student loans – Twin Cities;

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

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<p>But we don’t know the quality of the program she took out the loan to complete, or the quality of her other qualifications.</p>

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<p>Should financial aid and/or college loans be tied to the job market in some way? For example, if the U.S. is short on chemical engineers and high school math teachers, should more financial aid and loans be reserved for those majors and less for those majors where there is an overabundance of supply with weaker job demand?</p>

<p>There are surely quirks with the system. The only fool proof method I’ve seen is to work hard, save a lot in 529 plans, and send your kids to schools that you can afford that will push them the hardest in preparing for their futures. I’m hoping that for both my kids I leave them the gift of an education, with only a little skin in the game for them that is reasonable to keep them accountable (for us, that is $10K/year, which can be covered by any scholarship or merit aid they receive.)</p>

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<p>I am betting MathildaMae is on the right track. I fail to understand how 25K in student loan debt is not relatively easy to pay off in 2 years after graduating. I am willing to wager most of those kids went right out and bought a new car with their first jobs that are worth nearly that much - followed by marriage and babies and homes they also couldn’t yet really afford. </p>

<p>Maybe part of the flaw is getting degrees in areas where the earning potential is very low. Ratio of cost of degree to income potential was not well thought out…Also, just guessing. Like if you want an art history degree, don’t go to an expensive school to get it.</p>

<p>I am not saying college isn’t expensive, it is for sure! I knew this and made the decision to have only one child - was a very wise decision!!!</p>

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<p>It’s never difficult to come up with anecdotes, like the one kajon quoted above, to support whatever slant an author decides to write. I’m sure one could come up with plenty of anecdotes where people took out a loan, went back to school later in life and got a degree or advanced degree, got a better job and dutifully paid off the loan.</p>

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I agree with BCeagle that as a standalone number, the $36B has no significance. The figure is designed to get people’s attention but the only way it can be significant is to have it put into perspective - i.e. what percentage of seniors are facing crushing debt due to student loans, and I expect that number’s quite low, and then the average amount of student loan debt faced among those seniors who have debt. If the $36B is spread around enough it’s not a big problem. </p>

<p>Also for some perspective - I wonder how much home loan debt this same group is carrying, how much car loan debt it’s carrying, how much credit card debt it’s carrying, how much they spend on cruises as a group, or vacations, or golf, etc.</p>

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Was that a typo or meant that way? Funny!</p>

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<p>LaydHam. I agree with you. What is the point of working hard and scrimping your whole life to send your kids to college and then they will have to do the same for their kids. When do you get to enjoy the life you worked hard for? It is so depressing. The point everyone seems to miss is that college in the US is very expensive because people are willing to pay. Even mediocre colleges are charging 30-50K. This should not be… When I see D1 bill and all the fees on top of the tuition for nonsense. childcare.(for who), social activities, interest on their debt, etc…nickel and diming, it makes me sick. I feel like I am just throwing my money into a black hole, where they just make up fees for stuff.</p>

<p>Everyone tells you to save and not get into debt but the tuitions keep going up. No one tells you to save your whole life and pay cash for a $250K or 500K house. The majority of people would not do it and they would not sell. Hence, the mortgage. Anyhow, I feel that college prices have skyrocketed because people have been willing to pay for them. Those that borrowed and those that scrimped to save, both helped push the prices up. If you have more than one child, that could be anywhere from 100K to 500K, or more depending on the type of school. That could be retirement savings right there and we could retire earlier and enjoy life while we still can. Also colleges should charge according to the degree. When we looked at McGill in Canada, the tuition was slightly different according to the field of study. Never mind, that the whole thing was cheaper than some Tier 3 colleges here. Why should a degree with lower paying prospects cost as much as a STEM degrees? Not everyone has the ability or interest to become a Stem professional and we would not want to flood the market with stem degrees and bring those salaries down. We need people in other fields as well. Yet, many of the middle class jobs today, require at least a bachelor’s and not that many companies today are very willing to offer tuition reimbursement as they did in the past. I don’t mind paying but I feel I am running after a moving target and by the time my younger D goes to college, tuition will be in the 260K range for privates and around 100K for state.</p>

<p>Finally, why is the US willing to support generations of chronic public assistance recipients but immediately get upset when people get into debt to pay for an education? The chronic public assistance crowd will never get into debt and thus, we will never have to worry about forgiving their debt but we are paying for their entire lives. It would be great if we could get some of those people trained and educated and out in the workforce to be productive and pay taxes. I would rather bail someone out that wanted to get an education and be productive. However, we should be doing neither, we should be finding ways to get this generation educated and competitive without costing the parents a fortune. Even the tax break of $2K hope credit is ridiculous when tuition is sooo much higher than that.</p>