Parents Face The Student Loan Double Whammy
Career College Central summary:
Parents struggling to pay off student loans even as their children take on new debts to pay for their own schooling. Student loans were once thought of as temporary. But for some Americans, they're becoming a lifetime—or even a multigenerational—burden, as parents become unable to help their children pay for tuition, forcing the children to take on even more debt themselves.
The New York Federal Reserve, which tracks the data, reports that student loan debt is the only form of consumer debt that has grown since the peak of consumer debt in 2008. What's more, the amount owed in student loans is now greater than both auto loans and credit cards, making student loan debt the largest form of consumer debt outside of mortgages. It's all driven by relentless increases in the cost of tuition at a time when the country is struggling with sky high unemployment.
As a result, student loan debt is growing among an age segment many may not think of as students: Fifty-somethings. Americans 50 to 59 years old owed $112 billion in student loan debt at the end of 2012, according to the New York Fed—up from just $34 billion in 2005. And there are a lot of them. And the average balance per person has increased. Today, they owe an average of $23,820—up from $14,714 in early 2005.
Among Americans 60 and older, student loan debt is growing, too—although some of that may be debt taken on to help children or even grandchildren. Today, Americans 60 and older owe $43 billion in student loans—which is up from just $8 billion in 2005.
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