College loans are bankrupting parents, reports the New York Times. Colleges encourage parents to take out Parent PLUS loans, which have more than doubled since 2000, to pay their children’s tuition. Others co-sign private student loans. If parents are hit by health problems, layoffs or divorce, there’s no repayment flexibility.
“You don’t want your children, much less your neighbors and friends, knowing that even though you’re living in a nice house, and you’ve been able to hold onto your job, your retirement money’s gone, you can’t pay your debts,” said a woman in Connecticut who took out $57,000 in federal loans. Between tough times at work and a divorce, she is now teetering on default.
People over 60, the fastest growing group of debtors,owe $43 billion, up from $8 billion seven years ago. More are defaulting. The government garnishes Social Security benefits to collect on unpaid student debt.
“It makes you feel like a failure as a parent, to be unable to help your children and to have all your hard work end in a pile of debt,” said one New Jersey man, who took out a second mortgage of $280,000 to help cover his children’s college costs. “I sent my older kids to private colleges, and I was happy to do it because it’s how you help them get started off. But I can’t do it for the youngest, and I haven’t even been able to start the conversation with him.”
Start talking, Dad.
A 27-year man about to complete his second bachelor’s degree — this one’s in Russian literature — tells the Times he doesn’t know how much he and his mother owe for his years in college.