By Jim Donovan
PHILADELPHIA (CBS) — If you think that it’s just recent grads that are struggling to pay student loans, think again. As 3 On Your Side Consumer Reporter Jim Donovan finds, more and more people are heading into retirement with student loan debt.
Earlier this year, the New York Fed reported that people 60 and older were responsible for $43 billion in student loans. You may be thinking, why would a 60 year old still be paying for college? Often, that student debt is owed because they co-signed on their children’s loans.
Sixty-three-year-old Frank Freeman hasn’t taken a college course in nearly 40 years. In fact, he graduated from college in 1974. But he’s still paying off $80,000 in student loans. He says, “I thought I might have been retired by now, but I don’t foresee me retiring in the future because of that.”
Frank had co-signed on loans for his son’s college education. When his son didn’t make the full payments, it was left up to Frank. Not exactly what he had planned for his golden years. He says, “If I have to keep working, I’ll keep working.”
Frank is one of millions of 60-somethings still burdened by outstanding student loans. It’s often loan money used by their kids, who then defaulted. South Jersey Financial Planner Stan Molotsky finds it’s something many parents don’t think about before they co-sign for a loan. He says, “Most families don’t, and you don’t ever think that your kid is not going to be in a position to repay it.”
Unlike some debts that you might be able to escape, student loans don’t easily go away. Stan says, “In fact, you can’t file for bankruptcy and that loan is forgiven. No, that doesn’t work that way, you’re on the hook for that forever and a day. If you’re a grandparent and want to help out your grandkids? Stan says don’t co-sign; instead, give them money in the form of a gift, but “don’t give it to the child, don’t give it to the parent, just pay the college.”
If you’re struggling with your own student debt or are now responsible for your child’s student loan debt, it’s important to contact your lender. They may be willing to negotiate a better rate or a new payment plan. The last thing you want to do is ignore them.
For more information, visit: www.shmfinancial.com/financial-advisors.php