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Student loans sink Mom and Dad

Some are still paying off their college loans, but a growing number of parents are saddled with student loans they took out to pay their kids' tuition.

By MSN Money Partner Jul 19, 2012 4:03PM

This post comes from AnnaMaria Andriotis at partner site SmartMoney.


SmartMoney on MSN MoneyA growing number of middle-aged Americans are struggling with student loan debt -- not all of it from their college days.


Image: Portrait of young man in graduation gown with father on campus (© Thomas Barwick/Digital Vision/Getty Images)While borrowers over 40 account for about a third of the nation's $900 billion in student debt, they appear to be struggling with their loan payments more than other age groups, according to a report in The Wall Street Journal


For example, the delinquency rate -- the percentage of debt on which a payment has not been made for 90 days -- for Americans aged 40 to 49 was 11.9% in March, compared with 8.7% for borrowers of all ages.


Experts say many of those borrowers over 40 are still paying off balances from their college years. But a growing number of parents are saddled with student loans they took out to pay tuition for their kids. Roughly 17% of parents whose children graduated from college this past spring held federal Parent PLUS loans. That's up from about 10% a decade prior, and less than 6% in 1993, according to (Post continues below.)

The average balance on these loans: nearly $34,000, up 123% from a decade ago.


Meanwhile, more private lenders are demanding parent co-signers on their student loans. Because most students don't have a credit history, lenders say they turn to their parents' credit to determine whether to approve them, and at what terms. Both the parent's and the student's name appear on the loan, and the lender expects payment from either party.


Missed payments will affect both borrowers' credit scores. And if the student can't pay, the parent is on the hook for the payments.

Since the financial downturn, more than 90% of college loans from private lenders have co-signers, says Mark Kantrowitz, the publisher of, which tracks financial aid and student loans. That's up from roughly 50% prior to 2008.


The ballooning of student loan debt for older Americans highlights a key downside to student loans, say consumer advocates: There's no way out. Unlike all consumer loans, federal and private student loans cannot be wiped out after bankruptcy.


More on SmartMoney and MSN Money:

Jul 20, 2012 12:19PM
wow, tried to say kudos to man who used debt as inheritence, and kept getting flung off. Too many draw the line of cutting kids off no matter how badly they act. You make better adults for the future when you cut the ties that hold little baby up, and those that won't apply themselves thinking they will get mom and pops money later are going to be users their entire lives. I would have warned the kids to start paying or else first, but given the stories of kids killing to get at the money, this man did it right. GOOD for you!
Jul 20, 2012 12:09PM
Noliabed, when are we going to stop the high and mighty "if I can do it, you can,too!" attitude? Does not help these people at all. Some live in better areas for jobs... getting your job years ago is not in any way comparable to getting a job NOW... and some just had caught lucky breaks such as friends or family putting in a good word for you. Yes, many times it is more the kid just doesn't want jobs they think are beneath them, coupled with parents too easily willing to carry student debt for the child, but sometimes it is a matter of just too many people out there for the number of jobs where they live. And no, people just can't pick up and move, it is expensive and never guarantees anything will be better. If more kids would stop going into fields everyone else is studying for, then they would have a better chance of getting a job later. One microbiologist can find a job much more easily than the endless tech field graduates out there, I would imagine. Stop thinking popular fields, kids, and think little known and necessary fields of work.
Jul 20, 2012 11:38AM
So far my Master's degree hasn't been worth the cost, but maybe it will be one day.
Jul 20, 2012 11:32AM
I see these "average" loan amounts, and all I can think is BIG DEAL!!!  That is the price of a car, and no one thinks buying a car is scary.  I think the amounts are actually much higher.  I have a niece with almost 90k and a niece-in-law with over 100k.  My recommendation to all future college students, do as much in community college as possible, as cheaply as possible.
Jul 20, 2012 11:23AM
My daugthers loan is in default because she couldn't find a job and I can't afford another bill. At this point I'm waiting for the court to step in and depending on how that goes, I may have to file for bankruptcy. I cannot stress on something that I have no control over. Such is life. One pays bills and then they die.
Jul 20, 2012 11:08AM
A college education is an investment.  All investment involves risk.  No college guarantees a job upon graduation or any other time in the future. 
Jul 20, 2012 10:57AM

Wake up, people. This is what will happen: The USA will become a society of "haves" and "have nots."  What about someone who took out a student loan twenty years ago, studied hard in college, but there are simply no jobs to be had?  What if this same individual developed a debilitating illness since then, something that person never asked for or planned on?  Such as, parents who smoked during pregnancy and children's formative years, causing even more damage?


What's it going to come to?  Execute people for things they never planned on, did, or asked for?

In the 21st century, Smokers, druggies, and boozers need to think about what that sh*t will do to their children.  With today's knowledge, addicts unwilling to clean up should be rendered sterile.


Oh, yeah -- Those of you running this "Life is so lonely" garbage need to GET A LIFE.

Jul 20, 2012 10:51AM
My son just stopped making payments on his student loan. He had a decent income but for some reason felt no responsibility to pay it off, Really pissed me off as I did not raise him to be a deadbeat. I was not on the hook for the loan but decided to pay it off. Money was borrowed and needed to be repaid. Still love the kid but was really disappointed with him. Sat him down after taking care of the matter and told him, "that was and will be your inheritance". Left him stunned when I told him our will has been revised to leave any and all that remains when we leave this world to charity. I hope this wakes him up!!
Jul 20, 2012 9:46AM
Just another fine idea that the dopes bought into in this country. Remember you were going to be all rich if you kept "investing" in your home cause heaven knows home prices never drop. But got to hand it to the school system they sold you the biggest load of bs that any and all college degrees would get you the job you will just love. And the cost, no problem it has gone up faster than anything else in this country, and who got rich, yea the teachers did. As your kids got those worthless degrees, and found themselves at some liberal progresive swamp, and now your stuck with not only the kid with the degree. Living and moaning and bitchin she/he can't beleive that the rest of the country can't see their inner greatness, because that what you and the public school system told them for the last 20 years. But the 100k student loan bill, but don't worry I am sure that some Dumbocrat will formulate a program to bail you out, say around Sep or Oct of this year.
Jul 20, 2012 9:22AM

Someone started a campaign to help those struggling with student Loans you can sign up to receive donations or you can donate... if you search at indiegogo for studentloanlist


Jul 20, 2012 9:19AM
Some of you are saying student loans are a scam or that the gov. needs to do something about it like relieve you of your dept. WTF are you talking about. If you can't afford the loan then don't get it. And if your kid can't get a loan on his own, then maybe he should get a job for now, save some money and then go to college. We really are living in a society where everyone wants to blame someone else for their problems and stupid decisions. I couldn't afford college either so I got a job and worked full time while in school at the same time living on my own. Was it easy??? Hell know. I ate ham sandwiches and canned meat and noodles but I did it. And eventually I quallified for loans "without" my parents help and got them. Now I didn't go crazy and borrow more than I could ever pay back but I did what I needed to do and I made it. So if I can do it along with millions of other people who did it the smart way, why should the "gov" bail you out or cut you a break just because you were stupid or your kid was lazy?
Jul 20, 2012 9:00AM
What is going to eventually happen is - no one can afford a College or University Education due to the rising costs of such education.  Student Loans will be extremely difficult to get due to interest rates or not qualifying for the loans (just like Mortgages).  Colleges and Universities will either shut their doors eventually or they will have to lower their rates for people!  The bad part - you spend $50,000 (maybe more, maybe less) for a 4 year degree or higher.  The student graduates and can't find a job.  Or, a potential employer wishes to hire these new graduates for substandard wages.  So, WTH?  Is paying $50,000 (more or less) truly worth it now?  Maybe our 12 year education system should start teaching better so you don't have to go to college and spend a fortune and get weighed down with huge student loan debts?  Or, more trade schools need to appear that specializes in an industry where you don't have to take all those undeeded hours of classes!  It is going to be a lose-lose situation.
Jul 20, 2012 8:51AM
I love how condescending some people can be. Until you've walked in my shoes, you have no idea about my situation or how it started. You have colleges telling students that they cannot get any help until their parents first apply for a parent plus loan. And the government is all too quick to approve those parents plus loans, even in situations where they shouldn't be approved. We were told that if we didn't apply for parents plus loans, then my son could not obtain loans, which I now know is a load of BS. The way interest is computed on these loans is outrageous. My husband is working part-time (cannot find a full-time job, but keeps looking for one), so I'm having to defer the payments at the moment, which only increases the amount of interest. It's a vicious cycle.
Jul 20, 2012 8:19AM

Student Loans are as big a scam of the American middle class as are mortgages and health insurance.

Until Congress actualizes the reality that the middle class is now dealing with, our economy will continue to stagnate...But they shouldn't wait too long, because there is a grass roots reaction to the inaction that the middle class will take: If the middle class stagnates so will the poor and the wealthy, and the middle class is much better adapted to cope with that reality than either of these two...That's the really great aspect of the Constitution- you can't control the individual for very long -no matter how hard you contrive or manipulate because the corruption of corporations and banks is also occurring from within their own institutions. LOL!

Jul 20, 2012 8:09AM
Only those who are qualified should go to college and not everyone meets these standards
Jul 20, 2012 8:02AM
What idiot, when becoming unemployed, thinks it a good idea to go THOUSANDS of dollars in debt with no foreseeable way of paying it off?!?!  These idiots deserve to have their financial lives ruined.

I'm glad student loans cant be wiped out by bankrupcy. I dont believe in bankrupcy anyway. If you have a debt, no one should repay it but you. does no one have any integrity or honor anymore? I am 50 and still have student loan debt for when I went back to school at 40. If the liberals voted to wipe out all student loan debt I would still pay it back because it is my debt..

Jul 20, 2012 6:19AM
paid off my student loans -150k in ten years. never bought "new" cars and paid for them cash. bought a small home that i could afford and lived way below my means. 
Jul 20, 2012 5:34AM

Here is another reason why we are in such financial trouble.  Great example for your kids!  If you can't afford their education at the front end, go to a state school and have them get a job and pay for it themselves!!!

Jul 20, 2012 2:58AM
sage your telling me your still paying debt off yet you had kids and now after 20 years you still havent paid it off and your sons in debt? wth fu#3 this " problem with posting please try later " fu## you
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