Middle-aged borrowers piling on student debt

Tue Dec 27, 2011 3:50pm EST
 
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By Mitch Lipka

(Reuters) - Middle-aged borrowers are piling up student debt faster than any other age group, according to a new analysis obtained by Reuters.

Educational borrowing is up for every age group over the past three years, but it has grown far more quickly among those between 35 and 49, according to the analysis of more than 3 million credit reports provided to Reuters by the credit score tracking site CreditKarma (CreditKarma.com). That group saw its school debt burden increase by a staggering 47 percent, according to the analysis.

The average student loan debt for those aged 38 to 41 was the biggest of that group -- about $12,000, up from just under $9,000 in 2009. Young people still carry the biggest student loan burdens; those aged 26 to 29 have an average of $14,000 in student debt. But the increased levels in middle-aged student debt is a new phenomenon.

Credit Karma CEO Kenneth Lin says the reason is obvious: The tough economy has pushed people to seek mid-career training.

"More and more people are going back to school," he says. "High unemployment, rising tuition costs, artificially low interest rates from the government, and increased for-profit school advertising... (adds up to) consumers taking on student loan debt at an alarming pace."

For-profit schools tend to saddle more debt on older students with poorer credit than traditional institutions, he said.

For example, Atlantan Janice Derrick might be typical. She was 47, with 25 years of work experience when she got laid off nearly three years ago as an executive assistant. She applied for about 200 jobs without getting a single call.

"Not even temp agencies were taking on people," she says.   Continued...