Student Loans: New Survey Finds College Grads Carry Large Debt Into Middle Age

There's a good chance college graduates will still be more than $20,000 in student loan debt by the time they reach the age of 45.

Four-in-ten adults above the age of 35 who took out student loans are still paying them off, according to findings in a new survey conducted by Harris Interactive on behalf of CouponCabin. Nearly half of adults ages 35-44, 47 percent, said they have outstanding student loan debt above $20,000, with 34 percent of adults ages 45-54 saying they have $20,000 or more left on the balance they owe.

With that much trouble trying to pay off college loans, it's no wonder half of all adults wish they studied something in college with more earning potential, according to the survey.

Young adults between 18-34 also feel the pinch. Of these respondents, 83 percent are carrying a balance. Some 16 percent say they still owe over $40,000.

According to the Project on Student Debt, two-thirds of college graduates in 2010 took out student loans to pay for school, with an average debt of $25,250.

Student loan debt now tops $1 trillion and exceeds both credit card and car loan debt. The cost of attending a public college can easily exceed $20,000 a year, and the cost keeps rising.

State governments have scaled back their financial support for public colleges by more than a third nationwide, between 1991 and 2008. And as states have chopped away at appropriations for their universities and cut need-based grant aid for students, the Government Accountability Office has found both public and private schools are becoming increasingly reliant on what students pay in tuition for funding.

Earlier on HuffPost:

What Is Congress Doing About Student Debt?

Loading Slideshow

• Ryan Budget Whacks Pell Grants, Makes Federal Student Loans More Expensive

  Pell grants are the financial aid packages given to low-income college students which they do not have to pay back. Students who receive them are not required to attend a public college or even stay in their homestate, so that freedom has made it a fairly popular program. However, Rep. Paul Ryan's <a href="http://www.huffingtonpost.com/2012/03/27/pell-grants-paul-ryan-budget_n_1383178.html" target="_hplink">proposed federal budget would cut $200 million</a> from the program, and potentially eliminate help for more than 1 million students. Currently the maximum Pell grant award is $5,645, which only covers about a third of the cost of attending college. Ryan's budget would cut Pell grant eligibility for students who attend classes on less than halftime. His budget would also make it so college students with federal student loans would have to start paying interest on their loans while still in school.

• Student Loans And Bankruptcy

  Thanks to the Bankruptcy Abuse Prevention and Consumer Protection Act in 2005, virtually no student loans can be discharged in bankruptcy. So in practical terms, if you have $200,000 in debt for credit cards, car payments, or mortgage payments from a private bank, they can all be wiped away in bankruptcy. However, student loans from the same private lender cannot. The argument is that you can take away someone's car when they file bankruptcy, but you cannot take away their education. The Senate <a href="http://www.usnews.com/education/blogs/student-loan-ranger/2012/03/28/looming-student-debt-crisis-hits-the-senate" target="_hplink">heard testimony</a> on March 20 about whether or not this should be changed. Sen. Dick Durbin (D-Ill.) is <a href="http://www.bloomberg.com/news/2012-03-20/durbin-urges-private-student-loans-be-discharged-in-bankruptcy.html" target="_hplink">leading the charge for bankruptcy reform</a> that would allow students to get rid of their student loan debt when and if they file bankruptcy.

• Student Loan Forgiveness Act

  <a href="http://www.huffingtonpost.com/2012/04/10/student-loan-forgiveness-act-2012-hansen-clarke_n_1415910.html" target="_hplink">HuffPost Detroit reported</a> on the Student Loan Forgiveness Act, put forward by Rep. Hansen Clarke (D-Mich.): <blockquote>H.R. 4170 would forgive student loan debt for those who have paid 10 percent of their discretionary income toward their loans for 10 years and would cap interest on federal student loans at the current rate of 3.4 percent. Individuals who go into teaching, public service or practice medicine in underserved areas would have their debt forgiven after only five years. "Everyone tells us to go to school and work hard and we'll be rewarded for our dedication," Clarke said. "But the promise of a dream can turn into a nightmare for so many people."</blockquote>

• Petition For Student Loan Forgiveness Act

  An <a href="http://signon.org/sign/support-the-student-loan" target="_hplink">online petition</a> hosted by MoveOn.org has nearly reached its goal of attaining 875,000 signatures in support of the Student Loan Forgiveness Act. The Forgiveness Act would allow students who make payments equal to 10% of their discretionary income for 10 years to have their remaining federal student loan debt forgiven. According to talking points included in the petition, "If you have already been making payments on your student loans, your repayment period would likely be shorter than 10 years. The amount you have already paid on your student loans over the past decade would be credited toward meeting the requirement for forgiveness."

• Student Loan Interest Rates: They May Double

  A 2007 law that kept federally subsidized Stafford loan interest rates low will expire this summer, <a href="http://www.huffingtonpost.com/2012/03/21/student-loan-interest-rate_n_1371236.html" target="_hplink">meaning the rates would double</a> from 3.4 to 6.8 percent. Students have already gone to Capitol Hill to protest and most Democrats are in favor of keeping the interest rates low. Sen. Jack Reed (D-R.I.) and Rep. Joe Courtney (D-Conn.) proposed a bill that would get rid of the expiration date on the discounted student loan rate. However, Republicans argue it would cost the federal government $5.7 billion, which they say is way too much. If Congress does not act, the interest rates for federal student loans would increase on June 30, 2012.

• No Definition Of Credit Hours

  Republicans passed a bill out of committee that would repeal minimum standards for a credit hour and removes the need for a state to authorize higher education institutions in their state. Rep. Virginia Foxx (R-N.C.) <a href="http://edworkforce.house.gov/News/DocumentSingle.aspx?DocumentID=281565" target="_hplink">contends this would allow</a> greater flexibility for schools, Democrats counter that it opens the door for fraud. The federal definition of a <a href="http://democrats.edworkforce.house.gov/blog/overturning-accountability-and-integrity-measures-higher-education-programs-facts-hr-2117" target="_hplink">credit hour is the basic unit</a> underlying the distribution of federal student aid. Rep. Tim Bishop (D-N.Y.) <a href="http://www.insidehighered.com/views/2012/03/15/essay-argues-against-bill-overturn-us-rules-higher-ed-oversight#ixzz1qXWVjWPA" target="_hplink">wrote on Inside Higher Ed</a> that the bill represents a threat to the government's ability to police institutional fraud in the higher education industry. In regards to eliminating the requirement for state authorization for colleges, Bishop said "the bill would make it impossible for states to guarantee the quality of programs operating inside their borders."

• Pell Grants Are Now Semester Limited

  A rule from the Obama administration <a href="http://www.wtva.com/news/local/story/Longtime-students-may-be-shocked-at-new-law/nDgQP5Yu9ES5KSkIJJYXiw.cspx" target="_hplink">will limit the use</a> of Pell grants to 12 full-time semesters, or approximately six years of studying. The new rule goes into effect July 1, and the Department of Education will contact students in April who have used up their allotted time in school.

• Investigate The Federal Loan Programs

  Congressional Republicans <a href="http://www.businessweek.com/news/2012-03-28/republicans-call-for-congressional-probe-of-student-loan-program" target="_hplink">recently sent a letter</a> to the Government Accountability Office urging them to investigate the federal student loan program and whether they are "appropriately managing student debt." The federal government has turned to private debt collectors to collect money owed for student loans, while $67 billion of student loans are now in default, according to Businessweek. Those contractors out there trying to get students and graduates to pay up are paid on commission. The GOP <a href="http://edworkforce.house.gov/UploadedFiles/03-27-12_-_GAO_Letter_on_FFEL.pdf" target="_hplink">letter said</a> they were concerned borrowers who have defaulted are not getting adequate assistance to get back on track repaying their loans. The letter was signed by Rep. John Kline of Minnesota, chair of the House education committee; Sen. Michael Enzi of Wyoming, the ranking member of the Senate education committee; Reps. Virginia Foxx of North Carolina and Judy Biggert of Illinois; and Sens. Lamar Alexander of Tennessee and Tom Coburn of Oklahoma

• The CFPB Will See You Now

  The newly created Consumer Financial Protection Bureau said it will <a href="http://www.huffingtonpost.com/2012/03/05/student-loan-complaints-cfpb_n_1322037.html" target="_hplink">field complaints</a> about billing, confusing advertising and collection by private student lenders, and relay complaints about federal loans. "Getting a higher education can mean taking on significant debt - a big decision with a lot of consequences," said CFPB Director Richard Cordray. It's safe to say the CFPB is pretty concerned about student debt among American college students. Rohit Chopra, the student loan ombudsman for the CFPB, had a grim forecast recently in a <a href="http://www.huffingtonpost.com/2012/03/22/student-loan-interest-rate_n_1372506.html" target="_hplink">blog post about student debt</a>: "Students continue to borrow private student loans, which lack the income-based repayment and deferment options of federal student loans. If current trends continue, there will be consequences not just for young people, but for all of us."

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Comments

[ageofknowledge]

01:30 PM on 06/26/2012

Twenty million middle-aged Americans are laboring under student loan debt they cannot repay without any protection. All the student loan movements concentrating on JUST the new graduates have MISSED THE POINT! It's self-centered denial and age discrimination that needs to change in the movement because the vast number of middle-aged student loan debtors will not support reform that leaves them out. You can have twenty million more supporters or twenty million less young people. Right now you act like you want less. Do you want more or do you want less?

[Geri93940]

05:35 PM on 06/15/2012

So.. the 20-somethings are getting a taste of reality huh? 'Bout time. Long ago, in a time far, far away, people actually didn't go to college if they couldn't pay. We didn't expect the Government, or our parents, to pay for us... Whiners! Did they really think they could borrow all that money without consequences?

[Christine Mann]

12:28 AM on 06/01/2012

then u have all these ridiculously expensive online schools when the person could have gone to a JC and gotten a better education!!! This is OUTRAGEOUS and seniors should wake up and lobby against this because its coming out of your pocket.

[Christine Mann]

12:27 AM on 06/01/2012

And a ton of student loan money doesnt even go to tuition or books, it goes to living expenses. Seniors shouldnt have to pay your rent. There are alot of options for higher education. This is about the banks.

[Christine Mann]

12:25 AM on 06/01/2012

This is a BANK BAILOUT people!!! and the money will not come from the rich it will come from seniors and social security. Stop being so damn selfish. If you took out a loan you have to pay it back. Community college is $15 a unit and you can complete your 1st 2 years of a degree and at JC. State schools are also cheap.

[Melissa Irlandez]

11:14 AM on 05/14/2012

College tuition is a bubble just waiting to explode. Parents can't get home loans anymore because their homes are not worth that much. Society demands a college degree just to get a job. Society dictates the college cost will be 80-100k total ( in state university) at an interest rate congress can't seem to make its mind about. The only way to keep from paying the loan back is to stay in school- get that masters. What will happen when all the colleges are so dumbed down- so "everyone " can have a diploma? Local college should be 5-8k a year- cash, or if this is not possible then a loan at a higher clip. Students will need a job paying 100k a year, is this so easy to obtain? Really? When all people make 100k a year I call that inflation. Businesses want that degree now because kids come out of high school barely able to write a memo. If high schools churned out better kids maybe "everyone" would not need that degree. Do you really need 4 yrs of college to be a secretary, bank teller, phone operator, etc? Not everyone can be a dr, lawyer,engineer. But all need a job!

[kellygrrrl]

03:55 PM on 05/06/2012

clearly they didn't get the memo to just borrow from their parents ;/

[Helena Williamstom]

08:22 AM on 05/06/2012

I can not help but hold the parents partly responsible. A college education is not a want, its a necessity.

If today's couples want to have children, they should keep in mind they need to also include a college fund plan.

If the republicans get their way, student loans, pell grants etc will become a thing of the past. I graduated owning $3,000 in college loans. My parents help out immensely and I also worked full and part time jobs while attending college.

If I decide to have children, starting a college fund for the child will be part of the decision making process.

Its very irresponsible not to have a college fund for your child.

[FleecedParent]

04:56 AM on 05/27/2012

This sounds good in theory, but in an economy like ours it is difficult to make ends meet without savings. For parents without a college education the problem is compounded.

[Pam Shuffield]

10:24 AM on 05/04/2012

Students are borrowing for things that are NOT educational expenses. They're living above their means while in college instead of attempting to live on their part time jobs. We have a generation of students who do not know how to live without their "wants" and instead borrow to satisfy those "wants." If they still owe at 40+ years of age, it's because they have requested one forebearance after another and paid only the minimum instead of making these loans their priority after graduation. I do not advocate a forgiveness program. If you make a debt, you pay that debt. Plain and simple.

[laaambchop]

06:52 AM on 05/05/2012

give naive people loans---naive, optimistic people with no credit history, no experience in the world

brilliant

for the bankers

[Michael Morrison]

09:19 PM on 05/05/2012

laambchop:

Actually, the brilliant thing was getting Congress to agree to guarantee the loans, no matter how absurd, and to prohibit their discharge in bankruptcy.

Think of it...I convince an 18 year-old to take out loans for everything, send 'em offers to charge more, get 'em to make a few payments, and then get the government to reimburse me. Now the young adult is the Government's problem!

[JonW007]

09:58 AM on 05/05/2012

All students or just a small fraction of students, Pam? Excessive borrowing is not the issue. It all comes down to the skyrocketing cost of college and that is the fault of the colleges themselves. There is an educational arms race in this country and current students have to foot the bill to pay for the development of non-academic buildings and programs designed to bolster the schools image.

Tuition costs are out of control and far beyond what an average family can afford. We have developed a higher education system that is built to rely on student loans. There are simply not enough grants and scholarships to cover everyone's needs. I agree that forgiveness isn't the answer but the system is clearly flawed. It is crazy to blame 20 year olds for simply having to cope with the mess that their parents generation has left them with.

Finally, don't peg the current college-aged generation as excessive and irresponsible. They are not the generation that caused the housing crisis and that carry the majority of credit card debt. I'm betting that you're older, so if you want to see an excessive and greedy generation, look at your own.

[Michael Morrison]

09:23 PM on 05/05/2012

Jon:

I returned to graduate school at the tender age of 48. I'm paying for graduate school on my own dime.

Your observations are on target.

[Pam Shuffield]

09:05 AM on 05/07/2012

Jon - the MAJORITY are taking out more than they actually need. I should know, I process student loans for a living. I am 48 years young. The majority of parents who are my age are also living above their means and are unable to help their children with college expenses. Most cannot even save enough to pay for the books. Not because of their own student loans, but because they have NOT denied themselves or their children anything material through the years. Even families with mid 6 figure incomes are in over their heads. They are not teaching their children the fundamentals of personal finance because they themselves cannot handle their own responsibly.

[montanasian]

10:01 PM on 05/03/2012

Last nite I listened to George Nori on coast to coast and learned from a guest what a scam the private student loan does to those who default or want to renegotiate a deal. DONT DO IT. They tack on fees and then sell your loan obligation to another company in which your total could possible double.

[John Staversky]

04:21 PM on 05/03/2012

I think that the real 800lb. gorilla in the room is that much of this debt will simply never be paid-- so there are a whole lot of investors and institutions holding essentially worthless paper-- the definition of a bubble.

Just a thought

[Mouse718]

11:18 AM on 05/03/2012

I don't advocate blanket loan forgiveness/bailouts, but student debt is going to be a major inhibitor of economic growth in our country for decades to come. It will stunt consumer spending, home purchases, marriage, and fertility (which both spur consumer spending).

[AWSDsmith]

12:22 AM on 05/06/2012

That's why H.R.4170 is a good solution. It is not blanket forgiveness, it is a manageable 10-year repayment plan that allows borrowers to both make SL payments and needed investments in our economy :)

[Christine Mann]

12:30 AM on 06/01/2012

BS

[Nick Ward-Bopp]

10:41 AM on 05/03/2012

Interesting article.. think loan forgiveness is definitely a policy that needs to be explored.. but there are other ideas for recent graduates to knock out their student loan debt. Exchanging labor for rent is a way save money, learn tangible skills, and get satisfaction outside of a standard white-collar job. Find an old building, or a cool old house that is in disrepair.. work with the owners and start rehabbing it in exchange for rent/equity. You can follow a project like this at http://www.jarboeinitiative.com/

[Christine Mann]

12:31 AM on 06/01/2012

Loan forgiveness is NOT forgiveness!!! Its tax payers paying the banks! You zero out a loan, you zero out the savings account of the people who bought that loan in their pensions.

[Michael Morrison]

04:00 AM on 05/03/2012

Something in this article doesn't add up:

1/3rd of all college students currently graduate without any loan debt.

Of the remaining 2/3rds, the average debt is about $23,000...It was a lot less 23 years ago when the 45 year-olds were graduating college.

Yet we're supposed to believe that a significant number of 45 year-olds still have $20,000 in debt?

Or is this just speculation on the author's part?

[AWSDsmith]

08:42 AM on 05/03/2012

A significant number of us over 45 have far more than $20,000. The practice of capitalizing interest causes these balances to grow to 2, 3, 4 times what we originally borrowed--this is the problem with the student loan industry. The system is geared against the borrower.

[Michael Morrison]

05:30 PM on 05/03/2012

I'm still dumbfounded by how you could have racked-up so much debt, and then been unable to pay it off.

Over the past couple of decades, I'll bet you have purchased cars, a house...But not paid down your debt?

That's your fault, and don't expect me to help you pay for it.

[Pam Shuffield]

01:46 PM on 05/04/2012

Loan interest should only capitalize once. The interest on unsubsidized students loans accrues while the student is still in school. At repayment it capitalizes. Then you pay on it. It you seek a forebearance, once again the interest is accruing while you are NOT making payments and capitalizes again when you go back into repayment. I cannot seek a forebearance on my home loan when times get tough so why should individuals be able to get a forebearance on student loans? The systems is NOT geared against borrowers. Borrowers are doing this to themselves.

[Cristy Wright]

10:26 AM on 05/03/2012

Not everyone went to college at 18 and/or graduated within 4 years. Also, not everyone was able to begin paying on their loan immediately upon graduation, or steadily over the years without periods of unemployment or otherwise.

[Michael Morrison]

05:31 PM on 05/03/2012

And whose fault is that?

Not mine.

Don't expect me to pay for it.

[misha1996]

07:28 AM on 05/07/2012

I agree with you. When my husband went back to school after separating from the military and being unemployed for over a year, he had no choice but to take private student loans. He had gained too many credits for any financial aid, yes he had the GI Bill but it was designed to give you income while attending school and it was only 1500 a month and even with me working full time we still had 3 kids at home to feed. Now he pays more than a car note in student loans and it is counted against me when applying for any loan. It was the best for him since he got a job with in 2 months of graduation, but not everyone is so lucky.
Don't assume all student loan borrowers are teenagers who are drinking their money away. We needed it to make it and still pay the price every month. He did more than "traditional college students".

[NoName23]

07:15 PM on 05/02/2012

I don't mind paying what I owe on parent plus loans, I do mind paying capitalized interest while I am on long-term unemployment, and not being eligible for help when I signed the parent plus loans, I was expecting 4% interest which is what I was promised.
Imagine my surprise when after graduation, the interest rate was 8.5%, and no consolidation because the amount was less than $30,000.
I'm disabled, on social security disability pension, and my payment is more than my check each month.
At some point, this is what we are all asking, bring back the rights of borrowers, bring back common sense interest at close to what it was provided to the school for, which is less than what we are repaying during our entire life time.
HR 4170 is a sensible plan of repayment. Check it out, support it!

[Cosmochick]

03:17 PM on 05/10/2012

Thank you, NoName! Why are we the only people who don't get to retain our Constitutional rights? Everyone else gets help but us. I mean, seriously. This is discrimination! Let me take the huge black mark on my credit score and put myself out of misery already. Lord knows I've already paid back what I've taken out at this point! But still, my balance is higher than it was when I started thanks to this interest!

[Christine Mann]

12:35 AM on 06/01/2012

Its not your constitutional right to take out a student loan and have taxpayers pay it back.