For many Americans, thinking about living into their 60s means they are rapidly approaching the age at which they can finally stop working and begin enjoying retired life. But financial realities say that their efforts to help their kids pay for college often hinders these goals.
Recent statistics from the federal government show that the fastest-growing student loan debt demographic is among consumers over 60 years old, which surged to more than $43 billion this year, according to a report from the New York Times. That’s up from less than $10 billion in 2005.
Of course, student loan debt has surged across the board in that time, likely as a result of families being unable to afford the rising cost of tuition during the recent recession, the report said. As such, it is also important to note that the share of student loan debt carried by Americans over 60 has risen during that time from slightly more than 2 percent to just less than 5 percent.
More concerning may be that about 10 percent of these borrowers were 90 days or more behind on payments at the end of the first quarter of the year, up from just 6 percent in 2005, the report said. And in those seven years, the number of student loan debtors has doubled to more than 2.2 million.
But what isn’t reflected in those troubling statistics is that often, those debts are being carried not for baby boomers’ education needs, but rather for those of their children, the report said. Many young adults now leave their parents saddled with tens of thousands of dollars in debt at a time when they should be putting the finishing touches on their retirement planning and savings efforts.
These bills could end up costing the parents thousands of dollars a month, and they typically have to pay them in full, the report said. This is because, given the still-tough job market for recent college graduates, and the fact that parents may have assisted in getting their kids loans – particularly as a co-signer for those from private lenders – they are considered just as responsible.
Private student loans can be especially troubling for borrowers of any age because they come with less flexible repayment options than those from the federal government.
Image: Abdulsalam Haykal, via Flickr