NEW YORK—Recent Wesleyan University graduate Zach Wallace confided to reporters Thursday that he has no clue how his parents are supposed to earn enough money to settle his $40,000 in student loan debt. “My God, they’ll be lucky if they’re able to pay this off while they’re still in their 70s,” said the 23-year-old film studies major and unpaid intern, noting the minimum monthly payments his father and mother will need to make just to keep their heads above water. “The student loan system takes advantage of a lot of parents who simply don’t realize what they’re getting into. Then four years later it’s like, ‘Welcome to the real world, Mom and Dad!’”…
Wallace worries that his parents will be forced to claim bankruptcy by the time he has completed his Ph.D.
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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 FinAid.org.
“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 FinAid.org 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.
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.
Not so funny after all.