Still paying down student loans when you’re middle aged or older

by Grace

Still paying on student loans when you’re middle aged or older can certainly dim the outlook for a financially secure retirement.

Student loan debt amassed by parents is growing faster than loans taken out by the student.

Parents’ loan debt has more than doubled over the last decade — exceeding $100 billion dollars or 10 percent of all outstanding student loan debt, according to the independent research firm

“Parents of every income level are increasingly borrowing for their children’s college education. It doesn’t matter whether the parents are low income, middle income or upper income. There’s been dramatic growth in the percentages of parents who’ve been borrowing,” says founder and publisher Mark Kantrowitz.

Many parents who co-signed loans or borrowed money on their own for their children’s education now face the loss of their retirement nest eggs, homes and other assets….

Parents have an average of about $34,000 in student loans and that figure rises to $50,000, including interest, over a standard 10-year loan repayment period.

Aging Americans 60 and older owe about $36 billion in student loans.

Some of these older Americans are still grappling with their first wave of student loans, while others took on new debt when they returned to school later in life in hopes of becoming more competitive in the labor force. Many have co-signed for loans with their children or grandchildren to help them afford ballooning tuition.

It’s probably best to avoid the twenty-year plan for paying student loans.
I recently read where a 40-something mom explained that since she and her husband were still paying down their student loans, saving for retirement and for her children’s college education had taken a back seat.

11.8 million borrowers aged 40 and older owe $278 billion in student loans, averaging almost $24,000 per debtor.


It’s relatively easy for a parent to qualify for a student loan:  Qualifying for a parent Direct PLUS loan

8 Responses to “Still paying down student loans when you’re middle aged or older”

  1. If the kid stops paying on the loan mom and dad cosigned for (even if there is true financial distress), this has the potential to turn into a real relationship killer.


  2. Amy – I’ve heard stories about situations like that. I think I’ve heard Suze Orman advise parents NEVER to cosign on loans for their kids, or for anyone else.


  3. One of the problems with cosigning that I’ve heard about is that if the primary borrower stops paying, the lender does not immediately notify the secondary borrower. So the cosigner (i.e. mom) has her credit destroyed by stuff she doesn’t even know is happening.


  4. Yikes, I didn’t know that about delaying to notify the cosigner!

    On a somewhat related note, I just heard that a study found that 10% of children were identity theft victims. I need to get credit checks on my kids.


  5. “On a somewhat related note, I just heard that a study found that 10% of children were identity theft victims. I need to get credit checks on my kids.”

    On the bright side (so to speak), a lot of the perpetrators of identity fraud on kids are parents (we’ve got the little darlings’ birthdays, SS#, and mother’s maiden name handy!), so if you and your husband don’t impersonate your kids, they’re less at risk.

    It is possible to freeze kids’ credit. That isn’t 100% effective and you might need to thaw it out later, but it’s a nice option.

    Here’s a sad tale of woe involving parents who took advantage of a naive daughter the minute she turned 18 by getting her to take on legal responsibility for their business and then ceasing to pay taxes:

    A more common scenario is to put the utility bills in children’s names once the parents’ credit is trashed, not pay the utility bills, and thereby trash the kids’ credit. The child may only discover this history once they are on their own and trying to get utilities hooked up.


  6. Ooh, I didn’t know it’s often the parents who ruin their children’s credit. No, we’re not that desperate, thank goodness!



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