Education: Parents suffer under their kids’ debt
Many parents are “going deeper into debt to pay for their children’s education,” said Tara Siegel Bernard and Karl Russell in The New York Times. Students and parents are now indebted to the tune of $1.4 trillion, as millions of Americans enter adulthood “facing payments that limit their ability to buy homes and to start families of their own.” For students, debt has finally begun to level off. Unfortunately, that’s not because college has become more affordable, but because they “have borrowed as much as they can under the federal loan program.” So parents are increasingly filling in the gap and “feeling financially squeezed.” The average parent loan through the PLUS loan program, the main college-financing vehicle for parents, hit $32,596 for students who graduated in 2015-16, said Susan Tompor in the Detroit Free Press. That’s up 19.2 percent in four years and 40 percent over a decade. The parents are acting as a “pressure release valve” when their kids can’t borrow any more.
Many parents now face a daunting “financial triple whammy,” said Carmen Reinicke in CNBC.com. They’re balancing the need to help pay for their children’s college with “saving for their own retirement and often taking care of aging parents.” In addition to taking on debt themselves, many parents are helping kids with their loan payments; one-third of parents plan to help their children pay back the money they borrowed. If they cosigned their kids’ loans, they may not even have much choice about it, and could be on the hook for a lot more than they expected, said Nicole Pesce in Moneyish.com. One mother who cosigned a $20,000 veterinary school loan was stunned to see it balloon to $30,000 with interest. “I started crying,” the mother said, “I can remember the scene clearly: I’m sitting at my dining room table with my checkbook and just saying, ‘Oh, my God! Oh, my God!’”
“Students and their families may not be doing all they can to get financial aid for college,” said Delece Smith-Barrow in HechingerReport.org. Only about 61 percent of high school graduates completed the application for federal student aid. Parents and even lawmakers complain that the form is “difficult to complete and its complexity discourages students from applying.” But it’s not just the first step for federal aid; it’s also often a requirement for other scholarships and grants. Evidence shows that “a college degree is worth the cost,” said Aimee Picchi in CBSNews.com. But one important thing you can do for your children is to save for yourself so “that your kids won’t need to support you” in retirement.