NEW YORK TIMES: Managing Student Loan Debt as an Older Adult

Career College Central Summary:

  • Continuing your education is a lofty pursuit, but it could become an albatross if you get too deep into student loan debt.
  • With the need to retool career skills or pursue new vocations, more Americans are taking on loans to finance education later in life — for new degrees, certificates or course work called continuing education units to improve knowledge in demanding professions.
  • According to the Government Accountability Office, student debt held by those 65 and older has risen significantly in recent years, growing to about $18.2 billion in 2013, from about $2.8 billion in 2005. While it’s not known how much of that is the result of college loans co-signed for children or grandchildren, a good portion is for continuing education. Before the last recession, the working-age population pursuing “re-entry” courses jumped 27 percent over a decade, according to the Education Department.
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  • With all that borrowing by older people, some loan trouble probably can’t be far behind. So how do you avoid it if you’re a present or future retiree, since Social Security or wages could be garnished if you default? One answer is your employer might help pay for your education. Many employers will pick up some or all of the costs of a graduate degree.
  • If you’re paying for all of your education, look at it as an investment, said Tom White, chief executive of iQuantifi, an online financial advice service. In addition to asking yourself the reason for going back to school, he said, “Do a cost-benefit analysis. How will it maximize my earnings? Will I be able to service the debt?”
  • Andrew Weber, a certified credit counselor in Athens, Ohio, went back to college after obtaining a bachelor’s degree. He advises those returning to school to carefully consider their financial situation and career before going into debt.
  • “Evaluate your postgraduate payment plan,” Mr. Weber suggests. “What will your salary be after graduation? Will there be an immediate payoff in terms of a higher salary?”
  • For example, in some companies and professions — like teaching — getting a master’s degree leads to a guaranteed pay raise. Will your employer reward you for a higher degree? If so, will your raise offset the cost of the degree and debt incurred? Mr. Weber says in a previous job he could have received an immediate $2- to $3-an-hour salary raise after earning a graduate degree.
  • You can overpay for a degree or certificate that will yield little career advancement or salary increases. Mr. Weber warns against for-profit colleges that market aggressively and says their programs and graduation rates should be carefully vetted.

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