by Pete Mazzaccaro

Rising student loan levels are a problem. More than 58 percent of all college graduates say they have student loans. Total U.S. student loan debt is approaching 1.5 trillion – more than double the $670 million Americans owe in credit card debt. And 57 percent of Americans believe that debt held by these college borrowers is a major problem, according to a recent study by Harvard University’s Kennedy School of Government.

Another recent poll of millennials found that 70 percent of young people believe student debt poses a more significant threat to the United States than North Korea.

What most people don’t realize, however, is the burden student loan debt poses to older citizens. Citing a study by the Consumer Financial Protection Bureau, City Councilwoman Cherelle Parker introduced a resolution last week to study the impact of student loans on people older than 60.

“We know that rising student loan debt is a national problem for borrowers of all ages, but research shows that many older borrowers are already facing other types of debt, which is compounded by student loan debt,” Parker said. “Furthermore, the majority of these student loans are because more and more parents and grandparents are now taking out loans to finance their children’s and grandchildren’s education.”

Those numbers show that 2.8 million Americans age 60 and older owe an average of $23,000. Older Americans hold more that $66 billion of the 1.5 trillion and 73 percent said that debt was taken out for a child or grandchild.

“This debt poses a significant threat to the retirement security of our seniors, and consequently, the stability of our neighborhoods. While there are programs that offer help to younger borrowers, many of them do not apply to older borrowers, so the goal of our hearing will be to come up with a set of solutions that will assist this age group.”

Parker hopes to hold hearings on the matter in City Council soon.

 

  • Publius

    This is absolutely a problem, and I am glad that somebody is increasing awareness

    • A. Grayson

      Agreed. This is a massive problem. The rapidly rising cost of higher education is forcing students and parents to think of college strictly as an “investment” that should only be undertaken if it will generate sufficient “yield.” As a result, we will have fewer students who pursue liberal arts degrees in languages, history, philosophy, political science, etc. Perhaps one solution would be to reduce government-subsidized loans. These loans create no incentive for colleges to control their costs because everyone is willing to pay their ever-escalating tuition demands. The unfortunate truth is that government loans will ultimately make college less accessible and increase the burden of substantial debt to more and more students. It really is a shame.

      • Publius

        While that’s all true, I was specifically referring not to the students and parents, but to borrowers now well into middle-age and seniors who are still paying off student loans. There has been much in the media about Millenials, students and younger borrowers and student debt, but very little about the older population. As stated in the article: “This debt poses a significant threat to the retirement security of our seniors, and consequently, the stability of our neighborhoods. While there are programs that offer help to younger borrowers, many of them do not apply to older borrowers, so the goal of our hearing will be to come up with a set of solutions that will assist this age group.”

        • A. Grayson

          Agreed, and did not mean to focus on current-student debt at the exclusion of senior-held debt, but it is the case that both debts are driven by financing of younger-students educations. It’s all essentially the same problem, if you will.

      • ArnoldSBoat

        While there is a core truth to the argument you pose along the ilk of – the denial of fair and equal pay for African Americans (mostly by the unions) post emancipation lead to the government just dolling out money in the form of welfare, which has kept an entire people in a horrible state of poverty, despair, substance abuse and violence… I sensed a very anti government tone, (maybe liberatarian, maybe far right conservative) that was further supported by some of your recent posts.

        The truth is, we cannot abandon these programs to hastily, as the effects could be very corrosive to the current generation seeking assistance. It unfairly makes them suffer. Again, although I believe we should lean in this direction, the pace needs to be slow and steady.

        • A. Grayson

          Yes, you bring up another good example of government trying to help and making things worse – welfare has been disastrous for the inner city. Federal student loans are doing the same. Sure, they make borrowing for education easier but they also accelerate the growth of tuition which dramatically increases the burden of debt that graduates must bear.

          I am not anti-government but I do think there is a very limited scope of government, particularly at the federal level, and in general government has proven itself to be not good at achieving its desired results. Intending to help people and instead making things worse is not virtuous.

...