Imagine paying off your student loans with your Social Security benefits.
That's the nightmare many older Americans are facing, as a growing number of parents take on their kids' students loans. The New York Times on Monday tells a deeply troubling tale of one mother forced to live with her adult daughter because she can't afford to pay back the daughter's loans.
The NYT points out that student loan debt is growing the most quickly among those age 60 and older, citing data from the Federal Reserve Bank of New York. Student loan debt for the 60 and older crowd spiked more than fivefold since the beginning of 2005, while student loan debt among those under age 30 has doubled.
Nearly 10 percent of student loan borrowers age 60 and older were delinquent on their student loans for 90 days or longer as of the end of March, according to the New York Fed.
As a result, a growing number of parents are losing part of their Social Security benefits to pay off delinquent student loan debt, according to Treasury Department data cited by The New York Times. This has affected nearly 119,000 seniors age 60 and older this year as of September.
Some parents with student loan debt no longer can afford to take care of themselves, according to the NYT. Michele Fitzgerald, 60, who is unemployed, now is living with her 35-year-old daughter Jenni in Hingham, Mass., because she defaulted on the student loans that she took out to pay for Jenni's college education. In a few extreme cases, some parents stressed by student loans even have committed suicide, according to the NYT.
More than 2 million seniors hold student loan debt, and they owe an average $19,225 in student loans, according to the New York Fed.
The cost of college is skyrocketing as it has become more essential for young people to get a college education to make a decent living. College tuition has risen three times more quickly than inflation since 1983, according to Bain. Meanwhile, the median family's net worth was lower in 2010 than it was in 1989.