Retirement Destroyed by Student Loans
An article I recently read startled me. The title was "Baby Boomers Beware: Many Paralyzed by Burden of Student Debt; Parents Sacrifice Financial Stability in Down Economy to Support Children Pursuing Degrees." (That is one exhaustively long title, by the way!)
The article was distributed by PRWeb, and bemoaned the fact that many parents sacrifice their own financial security in order to pay for their children to attend college. According to FinAid.org, the student loan debt carried by parents amounts to approximately 10% of outstanding total student loan debt. Often parents will continue to pay these loans for 15 to 20 years after their last child has graduated from college. This means that many Baby Boomer parents will be paying for their childrens' educations well into their 70's! Although some have petitioned the government to consider a program of student loan forgiveness under certain circumstances, to date this movement has been unsuccessful.
Since the focus of this blog is geared towards helping Baby Boomers have the type of retirement they desire, the burden of these parent student loans can be crippling and may even prevent many of them from ever being able to retire at all!
High College Tuition Contributes to this Problem
The problem of student loan debt has become even more serious since the cost of tuition at the average university has quadrupled over the past 30 years. In addition, a little over a decade ago the U.S. federal bankruptcy laws were changed so that even a bankruptcy does not make it possible for either parents or students to rid themselves of student debt. It almost seems like a joke that student loans are considered financial aid, since they frequently to not provide aid but rather a burden to students after they graduate!
How to Reduce Student Loan Debt for Both Parents and Students
If you want your student to attend college, and you cannot afford to easily pay for it, what options do you have? Your first step will be to try to reduce the amount of debt you have to take on, since it is nearly impossible to get rid of the debt, once you have incurred it.
The same article mentioned above made these suggestions:
* Students should live at home and attend a community college for their first two years of general education courses. If there is a state college within driving distance of your home, students should consider living at home for all four years of college.
* Students should apply for every possible grant or scholarship.
* More than ever before, students should consider whether their choice of major will support their potential loan balance. (Ironically, this may mean that many students should not attend expensive, prestigious colleges if they intend to teach school, become a minister or go into public service.)
* Students (and their parents) should avoid all consumer debt, especially credit card debt, in order to avoid being crushed by their entire debt load.
* Students should be willing to work part-time during college in order to keep student loans to a minimum.
These choices may not be what your student had in mind when they envisioned going to college. However, when your child graduates and sees their friends making student loan payments of $400 - $600 (or more), while you and your child are paying little or nothing, your entire family will be grateful that you followed these suggestions.
In addition, the Baby Boomer parents who encourage their children to follow these recommendations are much more likely to have a happy, comfortable retirement without carrying the burden of student loans for the remainder of their lives!
If you are interested in additional information about retirement financial planning, where to retire, medical issues and changing family relationships, use the tabs or pull down menu at the top of the page to find links to hundreds of additional helpful articles.
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