Courtesy of Mish.
In my post Trends in College Tuition vs. Bachelor’s Degree Wages; Interesting Demographics of Student Loan Debt History I noted skyrocketing student loan debt, especially in the age group 30-39. See article for details.
Since 30-39 is not the typical school demographic, I asked readers 30 years or older who are sitting on a pile of student debt to share their stories and reasons.
A summary of reasons and email snips from readers follows.
Reasons for Skyrocketing Student Debt in Age Group 30-39
- Interest rates are so low they encourage not paying off loans
- Interest rates are so high and job salary so low that debts cannot be paid back
- Economic incentives for special ed teachers and others
- Divorce sends middle-aged mothers back to school to get a job
- Divorce and child payments sends middle-aged men back to school seeking better opportunities
- Pressure to get into management, and management requires additional school
- Exploitative ads
- Deferred payments
- Employers unnecessarily require college degrees
- Those who get married after high school decide to go back to school later in life
- Parents co-sign loans shifting debt responsibility to higher age group
- Job loss sends middle-aged persons back to school hoping for better opportunities
Email Anecdotes
Reader Steve, went back to school to become a special education teacher. He purposely loaded up on debt because “both our state and the federal government offered economic incentives in the form of student loan forgiveness to people entering that career path. Loading up on student loan debt was the only rational fiscal decision available to us.”
Reader Tom went into debt thinking it was a great deal because his loans were at a low rate for 30 years. He now has the cash to pay off his student loans but does not because he “bets that boring index/asset-allocation investing will average better than 3.6% nominal over the next 15-20 years.”
Reader Dave and his wife have a combined $90K in debt at a not so attractive rate of 6.8%. Right after he got his MBA Dave reports the “economy collapsed”. Dave spent 2 years unemployed, accruing interest. “We’d like to buy a house, but instead we are paying the government back at excessive interest rates.”
Reader Colleen mentioned the divorce factor. Women with kids and who did not work previously may need to go back to school as a result of divorce.
Reader Beth, age 30, says “I left undergrad with relatively little debt, but grad school killed me.”
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