What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
Jim Roach never expected to be struggling with student debt in his 50s. When his daughter Lauren got accepted to Northwestern University, the Dallas-based serial entrepreneur and father of six was making too much money to qualify for certain kinds of loans. So he made the seemingly logical decision to take out a loan directly from the university. By the time Lauren graduated in 2006, the principal balance was down to $40,000–steep but manageable.
Learn more about education reform on Giving Compass
That’s when a series of unfortunate events struck: cancer, an expensive divorce, a new child born with a severe hearing impairment, a business going belly-up. Years of wrangling over payment ensued, with the end result of the school demanding the principal and an additional $27,000 in fees and interest.
Roach didn’t know it at the time, but he was part of a microeconomic wave, one that could easily turn into a macroeconomic tsunami. The baby boom generation is increasingly being sucked into America’s student debt crisis, and no one seems to know what effect it will have on the economy.
Student loans are generally thought to be a concern for young people. And they are: As of the end of 2015, per the latest available data from the New York Fed, Americans aged 18-34 held a massive $601.53 billion tab for higher education. But that same data also indicates that mom and dad (or grandma and grandpa in some cases) are shouldering more and more of these debts.
It’s long been known that buying a house is increasingly out of reach for younger adults, but millennials aren’t the only ones losing their grip on this core aspect of the American Dream.
The observation inspired some hard research revealing that about 70% of homebuyers with student-loan debt aged 52 to 61 said their loans were $10,000 or more, with a median burden of $18,000. That’s only $7,000 less than the median amount owed by those 36 and younger.
The AARP has studied its members’ attitudes toward debt, using data from the Employee Benefits Research Institute, but not with a specific focus on student loans. Its analysis of a 2016 survey of Americans 50 and older paints a picture of workers and retirees worried about debt in general: Half of the workers reported having a problem with debt, while a third of the retirees reported the same. One in nine said debt was a “major problem.”
Roach offers a hint at what we might be seeing more of in the coming years. “I work with guys in their 70s and they’re out there swinging,” Roach says. “College is the reason a lot of people are still out there–we’ve got educations to pay for.”
Read the source article at fastcompany.com
Visit GivingCompass.org for related information on higher education