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US seniors face student loan debt
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K
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23 Oct ’14 - 9:28 am
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wow, that's pretty depressing

Around the world, student debt is a financial burden for millions - and in the US, a growing number of senior citizens are still repaying the cost of their education into retirement age.

Janet Lee Dupree is 72 years old and has a financial burden that will not leave her in peace: she owes $16,000 (£9,957) in student loans she acquired in 1971 and 1972.

Dupree, who lives in Citra, Florida, admits she forgot for many years that she had borrowed the money - originally $3,000 - in order to complete her undergraduate studies in Spanish.

"I am an alcoholic and I have HIV," she tells the BBC. "That's under control, but at that time I was sick and I didn't worry about paying back the debt."

Dupree defaulted on her loan, and since she turned 65 she has had money withheld from her Social Security benefits.

"Just recently I received a notification that they are going to garnish my wages because I am still working," says Dupree, who works 30 hours a week as a substance abuse counsellor.

In 2005, older adults owed $2.8bn (£1.61bn) in federal student debt. By 2013, that figure that had ballooned to $18.2bn, according to a report released last month by the Government Accountability Office (GAO).

These seniors account for 706,000 households in the United States - small compared to the 22 million households with non-seniors who hold student load debt, but a growing problem. People over 65 also defaulted on their student loan debt at a much higher rate than other segments of the population, says Charles Jeszeck, author of the GAO report.

Students in the US often take out loans, both privately funded and financed by the US Department of Education, to pay their school fees. While other loans, such as a home mortgage, can be forgiven if a borrower files for bankruptcy, student loans cannot.

According to the GAO study, the number of individuals whose Social Security benefits were offset to pay student loan debt increased from about 31,000 to 155,000 between 2002-13. Jeszeck tells the BBC that this situation can cause considerable problems for older adults who, like Dupree, may have to extend their working life well beyond retirement age.

"They face the potential of reduced social security benefits and a lower standard of living, possibly a poverty-level standard of living in retirement," Jeszeck says.

Rosemary Anderson, 57, says she is fortunate not to have defaulted on her student loan, but she already knows she will grow old with a debt "hanging over her head".

Between 1991-2000 she borrowed $64,000 in order to complete both her undergraduate and her graduate studies in organisational behaviour and development.

Soon after, though, she began what she calls a "steep decline into financial hell".

She says she divorced her husband of 24 years, had health issues that prevented her from working full time, and had her salary reduced when the financial crisis hit.

Student debt in the United States

• Outstanding student loan debt in the US amounts to $1tr

• 3% of households headed by individuals 65 or over carry student debt (706,000 households)

• 24% of households headed by individuals 64 or under carry student debt (22 million households)

• The outstanding federal debt for older adults grew from $2.8bn in 2005 to $18.2bn in 2013

• 27% of federal student loans held by individuals aged 65 to 74 are in default, compared to 12% of loans to people between the ages of 25 and 49

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Anderson, who works as a member of the emergency management team at the University of California, Santa Cruz, couldn't afford her monthly loan payments, so she entered into a series of deferment options with the Department of Education.

Today, she owes $128,000 and is hoping to get additional help from the government in reducing that amount.

The vast majority of older borrowers took out their loans in order to pay for their own studies, although a small percentage used the loans for their spouses, children or grandchildren.

Many borrowed money to pay for mid- or late-career retraining, or may have acquired loans with a very long repayment term. Others defaulted at a younger age, were unable to dig themselves out of the problem and carried it through into retirement.

The Department of Education says it is "committed to working with older borrowers to help them understand and manage debt", as William Leith, chief business officer for federal student aid, explained in a recent Senate hearing where different measures were discussed.

A department spokesperson told the BBC that there are "many repayment options available, including those based on income, as well as forgiveness programmes".

Meanwhile, Rosemary Anderson is worried. She says never imagined that she would have this problem at her age.

She feels fortunate to have a job but recognises that she will have to continue working as long as she is physically able to.

"Retirement is not part of my vocabulary," she says.

"I will never live long enough to pay off my loan."

http://www.bbc.com/n.....e-29730227

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farmboy2
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25 Oct ’14 - 11:36 am
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something to think about for those thinking about going to college 

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26 Oct ’14 - 10:39 am
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I have been having this discussion with a lot of parents lately, a large majority are against their kids going to college, I was kind of surprised by that

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easytapper
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26 Oct ’14 - 3:03 pm
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I read that article, and to me it seems like there's a lot financial irresponsibility there.

"I am an alcoholic and I have HIV," she tells the BBC. "That's under control, but at that time I was sick and I didn't worry about paying back the debt."

 

 

Between 1991-2000 she borrowed $64,000 in order to complete both her undergraduate and her graduate studies in organisational behaviour and development.

Soon after, though, she began what she calls a "steep decline into financial hell".

She says she divorced her husband of 24 years, had health issues that prevented her from working full time, and had her salary reduced when the financial crisis hit.

A 34 year old married woman goes to college for almost 10 years and racks up that kind of debt?  We've struggled financially, and I know it can happen, but that just seem irresponsible.  What about going to school part time and paying your own way?  How about your spouse paying it?  I know she was just chasing that pot of gold at the end of that rainbow known as "organisational behavior and development".

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ashleigh11
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27 Oct ’14 - 1:46 am
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I wonder how many of these are people who cosigned for student loans for their kids and their kids defaulted.

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27 Oct ’14 - 7:30 am
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I don't disagree with you ET, a large majority of people do the same thing, I interviewed a girl the other day for a server position, she's a senior at thomas college which is pretty expensive finishing up her psychology degree, I asked her what her plans are after she graduates, she says she is going to take a few years off to grow up some and then probably go back for her masters or phd since a bachelors in psychology is pretty much useless, I had to shake my head at that

that's a good question ash

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easytapper
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27 Oct ’14 - 2:21 pm
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KVR said
I have been having this discussion with a lot of parents lately, a large majority are against their kids going to college, I was kind of surprised by that

While a degree isn't what it used to be, it's still the best shot at prosperity (except maybe for a few trades).  Otherwise, you're going to be a HS graduate competing against college graduates for entry level jobs.  And there are still a TON of jobs that require a degree, even if it isn't pertinent to what you'd be doing.

Instead, they need to be smart about it.  Pick a marketable major with broad appeal.  Pick a minor that either strongly reinforces your major or also has broad marketable appeal.  Get your education as quickly and cheaply as possible.  I think kids really need to map out their career before they ever go to college rather than meandering their way through college.

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28 Oct ’14 - 8:29 am
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totally agree, kids should take a couple years off and figure out what they want, way to many waste the first couple years and end up changing their area of studies

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