With the jobs market looking bleaker than ever, more older Americans are gambling on additional education resulting in enough of a wage increase to pay back the cost of that education before retirement.
You?ve heard all about the rising student loan debt that threatens to keep today?s graduates out of the housing market and in mom and dad?s basement indefinitely, but seniors with student loan debt are getting far less attention. Older borrowers who have invested in education later in life in order to garner a promotion or make themselves more competitive in a challenging jobs market are now finding that they not only cannot afford to repay that debt, but that their social security could be seized, in part, to pay off that debt. In fact, 15 percent of social security benefits can be seized on a monthly basis to pay down debts like student loans, which cannot be discharged even through bankruptcy[1].
The problem is only going to get worse, in all likelihood, as many older students are returning to college thanks to the economic downturn, hoping that additional degrees and certifications will make them more employable. In fact, student loan debt among borrowers ages 35 to 49 increased by 47 percent in the last three years from $9,000 to around $12,000. These borrowers are betting that their increased education will result in enough higher wages that they will be able to pay back the debt before retirement.
Do you think that social security should be used to pay back student loans?
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[1] http://www.dailyfinance.com/2012/05/01/student-loans-meet-social-security-seniors-stuck-school-debt/
About the Author (Author Profile)
Carole VanSickle is the editor-in-chief of the Bryan Ellis Investing Letter.
Category: Personal Finance
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