Skip to comments.Senior citizens continue to bear burden of student loans (Many are co-signers with their children)
Posted on 04/02/2012 1:07:59 PM PDT by SeekAndFind
The burden of paying for college is wreaking havoc on the finances of an unexpected demographic: senior citizens.
New research from the Federal Reserve Bank of New York shows that Americans 60 and older still owe about $36 billion in student loans, providing a rare window into the dynamics of student debt. More than 10 percent of those loans are delinquent. As a result, consumer advocates say, it is not uncommon for Social Security checks to be garnished or for debt collectors to harass borrowers in their 80s over student loans that are decades old.
That even seniors remain saddled with student loans highlights what a growing chorus of lawmakers, economists and financial experts say has become a central conflict in the nations higher education system: The long-touted benefits of a college degree are being diluted by rising tuition rates and the longevity of debt.
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.
The recent recession exacerbated this problem, making it harder for older Americans or the youths they are supporting in school to get good-paying jobs. And unlike other debts, student loans cannot be shed in bankruptcy. As a result, some older Americans have found that a college degree led not to a prosperous career but instead to a lifetime under the shadow of debt.
A student loan can be a debt thats kind of like a ball and chain that you can drag to the grave,
(Excerpt) Read more at washingtonpost.com ...
This drumbeat of MSM stories about student loans is not a coincidence.
Obama is preparing a massive loan forgiveness for just before the election.
And so proceeds the build up for bailing out student loan debt.
I am presenting my own Presidential Campaign issue to whoever wants it:
- Cite the growth of non-teaching administrative positions in public universities
- cite ridiculous salaries and perks of specific college administrators, Presidents (and even coaches).
- cite the growth of tuition costs over the last 40 years
- cite the growth of Gov’t grants to higher education over this time
- compare the growth of tuition costs to growth of health-care, inflation, oil, wall street salaries
- show growth of student-debt over last 40 years.
THEN - call on universities, both public and private, to sign a pledge to reduce tuitions 10% by 2014.
Of course, few or none will agree to the pledge, but its a page from the Alinsky playbook, that will put the focus on these fortresses of socialism.
He'll probably come up with something that SOUNDS LIKE student loan forgiveness (i.e. student loan equivalent of HAMP and other mortgage loan modification) but still leaves borrowers or private lenders on the hook. I practice bankruptcy law, and one of the main principles in the bankruptcy code is that, with rare exception, the federal government ALWAYS gets paid. Most of the debts that are specifically nondischargeable in the code are those that are owed to government entities.
If you want to help Junior with his college costs, you are much better off taking out a regular bank loan than co-signing a student loan. If worse comes to worse, you can get out from under a bank loan in bankruptcy. With a student loan, you're on the hook forever.
Didn’t Obama recently decree something to the effect that student loan repayments were to be limited to 10% of disposable income? If that’s true (and I don’t know for a fact that it is), does it only apply to loans taken out after the decree...and does it apply only to the loan recipient (vs. the co-signer)?
I’m not sure. Obama talks a lot of about helping student loan borrowers, but there’s not much substance to anything he says, and he never goes into specifics. Which is why I figure any plan of his will be a whole lot of nothing.
There are several repayment plan options with federal student loans, some of which are based on income. Essentially, you pay what they say you can pay for 25 years; at the end of that time, the remainder is written off and you get a 1099 for that amount.
Individuals with ambition to run a manor house are slowly winding ropes around Mr. and Mrs. American citizen with the intent of making us serfs.
Power corrupts, and absolute power corrupts absolutely. That is why man cannot, is incapable of, governing at all. And conversely, that is why Jesus Christ the rightous, the man from Galilee, The Word who was with God in the beginning and is God, will govern this world justly from the Israeli city of Jerusalem when He comes back, for the first time in history.
Why won’t He be corrupted by power? All men are who touch it. Because, unlike you and me, He is meek and lowly.
Come, Lord Jesus!
I love all my kids but am not stupid....my parents taught me well.
My parents didn’t let us get our licenses until we were 18 for the same reason; kill somebody when you’re 17 and your parents are liable.
Getting the older generation to co-sign loans was a great way to speed up the wealth re-distribution; people that should have been free & clear of the debt crisis will now watch their assets be added to the pool for re-distribution to welfare recipients & unions. So many people are being left with nothing (those that have savings are losing value every day as the dollar plunges, while many who had investments already lost much of the value in them more overtly), the left’s wealth re-distribution is nearly complete. There is little for anyone 40 and over to pass on to their children.
This won't work. On Dec. 31, 2013 at 11:59pm they will raise the tuition fees by 20%, only to drop them by 10% on Jan. 01, 2014 at 00:00am.
The problem is not caused by universities ripping students off. (They do, but that's a different story.) The real problem is in availability of credit that can't be repaid.
If a university charges $50K/yr and nobody comes - because they have no money - then the university will have to lower the fees or to close the doors.
This credit is inflation by another name. Monies are created out of thin air and given to people; however the people will not be able to ever be productive enough to back that money with equivalent productive labor.
The fact that we have set up a system where young financial neophytes who have barely attained their majority are encouraged to take out student loans that lock them in forever regardless of ability to pay is reprehensible. The reasons we have so many problems with this system are plain, and yet we’ve built up a huge edifice around this practice.
The amount you have to withdraw is based on how long statistics say you will live and (don't ask me why this is relative) the age of your oldest child.
They want to make sure you have nothing left for your kids when you croak....When you make the last withdrawl, it should be just before you die....but I do love to help out the grandkids and send them money from time to time. (like when they are in college)
Its taxed at a lower rate, but if you take out more than they determine, your taxed at a higher rate.....It takes a genius to figure out your federal taxes....I have a CPA that has done my taxes for years, but can remember when you could do it yourself, and the booklet from the government to do your own taxes was only 30 pages long and the long form was relatively easy...
I understand; it is ridiculous; I think the original logic was that it wouldn’t create a hereditary upper class, but it seems that it only stops the middle class from reaching the upper class with a head start.
Keep in mind that CPAs are designated as such to audit publicly traded companies; I’ve known people with high school diplomas who work at H&R Block doing taxes. The “tax industry” certainly has grown...
When I was getting ready to go to law school (a prestigious and expensive one), my Dad tried to explain this to me, but I was sure he was wrong and I'd make plenty of money to pay back my loans. Fifteen years on, I'm still making payments and I know Dad was right. I got a good legal education, but I should have gone to a state school or a less fancy school that would have offered me a scholarship.
I’ve a younger friend (mid 30s) with a Vandy law degree and a relative mountain of student loan debt still that he is working off. That partner track big law firm salary never appeared. He probably should have gone the route you suggest as well.
many of these are worthless degrees.
Students who can not find employment based on these degrees SHOULD be able to bankrupt out of them and the burden fall back on the university that “educated’ them.
Edowments should not be exempt from attachment.
I like the law grad who sued his NY university for false advertising.
Law degrees are essentially worthless these days.