“The early-morning calls from debt collectors continued even after her massive stroke, waking Bella Logan to daily reminders that she owed $75,000 in student loans. Logan is 94.” This is from today’s Columbus Dispatch, and the story is a grim recessionary tale:
“The federal government garnisheed $200 a month from Robert Austin’s Social Security checks for years for student-loan debt, leaving Austin without money he needed for medications. He is 83. After Ray Stockman’s wife died, he wanted to move but was turned down three times for apartments because a student-loan debt had sunk his credit rating. He is 78.Each of their names is attached to student loans for their children’s college educations — loans that the children didn’t repay and that scarred the parents’ financial lives.
“’We paid our dues; we worked all our life and tried to do right by our kids,’” said Stockman, of Kent, in northeastern Ohio. “’But these loans can come back and haunt you in ways you would never think about.’
“As tuition costs have skyrocketed and access to credit has tightened, more students are turning to their parents and grandparents for help. If the elders don’t have the cash, they have limited options. Among them: sign a federal parent PLUS loan or co-sign on a private student loan from a bank.
“There is no way to know how many parents and grandparents are saddled with their children’s student-loan debts, but the number of borrowers older than 60 has tripled since 2005, statistics from the Federal Reserve Bank of New York show. The number of those who have fallen behind on payments also has tripled, from 63,000 to 198,000.
“Those borrowers are heading into retirement and the fixed-income years carrying an average balance of nearly $20,000, about $6,000 less than the average debt load of a new graduate with a bachelor’s degree. And the demand for parents to help shoulder the burden of debt is likely to continue. Last year, about 90 percent of borrowers who took out a private student loan had a co-signer, compared with 55 percent in 2005.”