Retired, or Hoping to Be, and Saddled With Student Loans

[Demovictory9]

https://www.nytimes.com/2020/02/26/business/retirement-student-loan-debt.html

Retired, or Hoping to Be, and Saddled With Student Loans
Americans older than 60 are the fastest-growing group of college loan debtors — the vast majority of them borrowing for others — a consumer agency says.

When Patrick Donohue retired in May after a 20-year career in customer service at AT&T, he and his wife, Kay, didn’t celebrate. Instead, they argued over which pension option was better: obtaining a large portion right away or scheduling small monthly payments.

At issue was whether the lump sum might free them from paying further interest on the $97,932 they borrowed from the federal government so their four daughters could attend college, or if doing so would mean sacrificing their long-term financial stability. Ultimately, they settled on the monthly payments, guaranteed for both their lifetimes.

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In all, more than 2.8 million Americans over 60 are contending with student debt, a number that has quadrupled from 700,000 in 2005, according to the bureau. The cost is swelling, too: Between 2012 and 2017, for those age 60 and older, the average amount of student loan debt almost doubled, ballooning to $23,500 from $12,100.

The Donohues’ situation is typical. According to that 2017 report, which uses the most recently available figures, 73 percent of borrowers over 60 are paying off student loans they either took out or co-signed to help children and grandchildren through college. Only 27 percent are chipping away at their own or their spouse’s education.

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A 2019 AARP Public Policy Institute report found that 15 years ago, borrowers 50 and over held $47 billion of the nation’s $455.2 billion in student loan debt. By 2018, that figure had risen to $289.5 billion of an overall $1.5 trillion.

There are big risks to taking on this debt, and painful consequences if you fall behind: A person’s Social Security benefits can be reduced up to 15 percent if the borrower defaults, not to mention serious quality-of-life issues.

https://www.nytimes.com/2020/02/26/business/retirement-student-loan-debt.html

The kind of issues Kimberly Weihl, 55, of Midland, Mich., is facing, for instance. When Ms. Weihl took out a loan for her daughter to attend Saginaw Valley State University in 2007, she was already paying down $60,000 of her own student debt. Now she owes $77,000. Her daughter, who dropped out after two years at Saginaw State and is living at home, is working as a waitress and not yet able to help with payments, which come to $500 a month.

Ms. Weihl cannot foresee a future in which she is able to retire from her nursing job. “I’m convinced I’m going to die before I resolve this,” she said. “I can’t sleep at night. My stomach is in knots.”

[handmade34]

1. IBR

the answer for most

[customerserviceguy]

2. Sounds like

the debt is less than $25K per daughter, surely their educations prepared them to get jobs commensurate with paying back what most people would consider a modest amount of student debt these days.

[MichMan]

4. What kind of children would let their parents get stuck with their college debts?

[customerserviceguy]

5. Agreed

And what kind of parents would finance an education that was less than likely to produce an income stream to pay back a student loan?

People do dumb stuff with money all of the time, this surely has to be one of the worst financial decisions a person can make.

[seaglass]

7. We paid for 1 year of my son's education and he dropped out. I would go into debt for him if he

would go back to school because I think it would improve his prospects and it would give me peace of mind.

Seems reasonable to me.

[Drahthaardogs]

3. Why do people do this?

One son went to community college, then worked, lived at home, and attended university. Business degree with no debt.

Other son is brilliant and has a full ride academic scholarship. I will pay his meal ticket. He should get out debt free.

You donr HAVE to go into debt.

[3Hotdogs]

6. + 1