So many school x elite with costs vs solid school b but more financially savvy posts than ever. These decisions are life changing for families. Don’t be flippant or immature with elite at all costs. Shocking and scary
Sorry all. The post above didn’t include the data originally intended.
Information that came across desk today from Wealth Advisor Magazine.
—6.3 million College loan borrowers are over 50 years old and the level of debt for this group alone mushroomed to over $290 billion dollars up from $47 billion dollars just 15 years ago.
—$290 billion dollars with a b ! and they are predominately middle class families !!
—Borrowers over 50 years old account for 25 percent of all student debt. Crippling retirement plans.
—29 percent !!! of the of these 6.3mm borrowers 50 to 64 years old are in default. Over 270 days past due. Ruining credit and opportunities. With large unexpected payments due.
—870,000 people over 65 have student loan debt!
—37 percent of those over 65 are in default. Grandparents in retirement. Good lord.
This is craziness. Many people come here with no access to information and rely on us. They love their family and wants what best.
Remember out definition of best school is not always the best idea.
This is not a beauty pageant. These are real lives and real consequences. Rankings and outcome surveys don’t pay real bills.
Let’s be careful as a voice of reason and sound advice. This is serious stuff.
Do they even include loans co-signed with the student? Those are cropping up when the students fall behind.
Invite billionaire as Commencement speaker! 
Yes. These are arranged as such. Co signed and then student doesn’t pay. Unexpectedly large bills then fall on them. Or if the child becomes disabled or unemployed.
It is very avoidable in most cases. The numbers are staggering to me.
The billionaire commencement speaker - the amount he plans on paying for one graduating class of one college is reported to be $40 Million! If we multiply that out it proves @privatebanker is right to be worried about what this means for all of our futures. What are the odds of the next generation being financially fit enough to pay their own way. IDK what the solution is aside from a lot more financial
education a lot sooner.
private banker:
do you have the source for this report?
Yes they are, but does the source separate grad & undergrad debt? (GradPlus loans have been growing exponentially.)
Here is the most recent trends in student aid report. Busy right now so can’t highlight the takeaways, but this is much of the cold hard data, with some good interpretation. Loan data and charts sprinkled throughout.
https://trends.collegeboard.org/sites/default/files/2018-trends-in-student-aid.pdf
This report by AARP seems to have the data referenced in post #1.
https://www.aarp.org/content/dam/aarp/ppi/2019/05/the-student-loan-debt-threat.pdf
Does it specify whether the debt is for their education or for their children’s education? I know a number of people who got caught by interest capitalization and are still trying to pay off their own students loans in their 50s.
I’m seeing this hit families that can’t afford this burden. Kid takes out loans, parent gladly co-signs like it’s a car Loan or for an apartment.
Then the parents hit a job or health slump. Or divorce or other crisis. They retire, maybe early maybe on disability. Then these loans come up when the former students hit hard times. They can even go after social security , tax refunds, etc for these loans.
Far too many people treat loans as if it is free money. Of course this applies to more than just student loans.
One think that worries me about a billionaire paying off one class’s debt or politicians proposing to pay off student loans, is that it makes it seem as if it is okay for the rest of us to spend, take loans, and assume that someone else is going to pay it off.
This is not going to end well.
How much of these loans are for professional school (e.g. medical, law, dental, etc.) versus undergraduate?
Most of that debt for the crowd over 50 has to be on their kid’s college. Sure there is some of it for their own college that maybe they did later in life or can’t get over the hump to pay it.
About 4 weeks ago we were at a dinner for top students for D19 HS. They were announcing where the kids were going to school. I know many of those kids and families are going to be taking out over $50K in debt to get through the 4 years. In some cases much more.
After going through the process we as a family have decided for undergrad that the normal $27K is tops for loans with the caveat of going up to $40-70K for certain schools with certain majors. That would be the advice I would give to anyone.
The rough part of many in the corporate world they get pushed out of their good job sometime in their 50s and have trouble finding a new one with the same salary. I have seen it happen. It can be rough if you have a lot of debt.
@“Erin’s Dad” That link answers my question. It looks like most of the over 50 crowd with debt are dealing with their own debt. From the AARP article:
‘Most older borrowers hold loans taken out for their own education rather than for their children’s education. In 2015, 5.3 million student loan borrowers ages 50 and older had outstanding federal student loan balances for their own education, compared with approximately 2.2 million Parent PLUS borrowers ages 50 and older.’
Ones I know signed for their kids.
I often say that the Direct Loan for the kids and limit the parents to the same amount at most. And to take it from PLUS and start paying on it ASAP.
Also. If you have student debt at age 50 when prices where so much lower. What do you think the future holds.
When we say save money for med school and attend the thriftier option. So many here advise against this like there’s a money tree. “So many don’t finish premed, think about that “. Well apparently some are in fact finishing.
“Save money for grad school”. Invariably someone brings up paid PhD programs as an example to choose higher. or whatever.
I don’t care when or how this is incurred. It starts with the same cycle. Over pay undergrad and nothing left for grad school. If it’s an option . Or embark on a major requiring grad school with no economic rationalizations.
And the 870k debtors over 65 with such high defaults have to be grandparents.
There’s no perfect answer other than please be circumspect with the financial advice we render here. And understand that the “no brainer” comments can really hurt people if not truly constructive.
I bet many of those older folks with their own debt were returning to get a college degree due to hitting a ceiling at their job or wanting to switch jobs. I know a fair number who hit that ceiling - no idea if they took out loans or not, but considering oodles of Americans can’t afford a $4-500 emergency it wouldn’t surprise me.
“And the 870k debtors over 65 with such high defaults have to be grandparents.”
There are some parents over 65 with kids in university. Also, a parent that takes on debt at 55 to put their child through university might still have some debt at 65.
I would however agree that quite a few of these are probably grandparents. Of course it is a problem either way. Paying off a significant debt after retirement is not likely to be practical.
@creekland. That could be.
However. To be motivated enough to take on take on significant debt that late in life to attend college or grad school and then default. I don’t know.
My guess is many are grandparents co-signing loans for bright children they love and neither understanding the long term issues that it can cause.