Growing Debt Among Nontraditional, Older Students
SOURCE:
Middle-aged students are accumulating debt faster than any other age group, according to a new analysis.
Middle-aged persons represent the fastest growing segment of student debt holders, according to new data. Though the average student debt continues to rise among individuals of all ages, middle-aged students are quickly catching up with younger age brackets.
That phenomenon shows the growing prominence of older, non-traditional students in the higher education system—and the importance of protecting their interests and giving them the information to make good educational investments as they become a locus of student debt.
Reuters obtained the analysis from credit score tracking site Credit Karma, which looked at credit data on 3 million individuals. They found that that while young people still owe more on average, student debt is growing fastest for individuals between 35 and 49, a new trend in postsecondary education.
Overall, the debt burden for individuals between the ages of 35 and 49 has grown by 47 percent over the last three years, according to the analysis.
“More and more people are going back to school,” Credit Karma CEO Kenneth Lin told Reuters. “High unemployment, rising tuition costs, artificially low interest rates from the government, and increased for-profit school advertising ... [adds up to] consumers taking on student loan debt at an alarming pace.”
Middle-aged persons fall into the class of non-traditional students, an emerging category that includes individuals who delay entry to college, work full time during the school year, or attend college without having earned a conventional high school degree. Many non-traditional students are counted as financially independent, and receive little or no financial aid.
Education is an unusual investment, because there is incentive for workers to enroll during an economic recession, in hopes that the market will improve by the time they graduate with a new skill set.
But many nontraditional students are drawn toward for-profit schools, which can offer great flexibility in scheduling and time frame, but where on average they will take longer to graduate and end up with more debt and lower post-graduate employment and salaries than students at more traditional institutions.
(The Top Five Troubling Things About the For-Profit Industry's Self-Policing Standards.)
Additionally, older students have had more time to rack up mortgages, credit card debt, and even unpaid loans from previous stints at college.
What policy can prepare older students to make the best decisions and get the most out of their education? Demanding accountability from for-profit colleges would be a good step in the right direction, even for commitments as simple as releasing accurate post-graduate employment data.
And the Consumer Financial Protection Bureau is seeking public input on a “financial aid shopping sheet,” tallying cost, loans, work study options and default rate—which colleges would be required to send to admitted students before they made a decision.
Jon Christian is a staff writer with Campus Progress. Follow him on Twitter @Jon_Christian.
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