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.
This post comes from AnnaMaria Andriotis at partner site SmartMoney.
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 FinAid.org. (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 FinAid.org, 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:
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.
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
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!
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..
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!!!
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