This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Student Debt Becoming More of a Family Problem

By Howard Rothman in New York

NEW YORK ( MainStreet) -- When my daughters were nearing college age, my wife and I made a deal with them. We'll pay full freight for any undergraduate school you attend, we told them. You're responsible for all post-graduate expenses.

Despite their continuous run of scholarships and work-study jobs, our offer forced all of us to rely a lot more on student loans than we ever anticipated. And now, two bachelor's degrees and a doctorate in veterinary medicine later, the Rothman family's collective student loan debt is -- gulp! -- well into six figures.

We've all heard tales about the explosion in individual student loan debt, but not as much about the impact these loans are having on whole families. And while there's no clear data on family indebtedness, there are plenty of indications that parents like us are piling on loan obligations as fast as our children.



"There absolutely are more parents taking out loans today to help make up the gap between other financial assistance and the cost of college attendance," says student loan expert Heather Jarvis. "And it seems that delinquency rates are rising for these borrowers as well."

The overall problem is easy to understand: college costs are climbing, and incomes are not. The average total cost of enrollment at a four-year private school rose to more than $43,000 a year in 2012, according to the College Board, while the annual price of an in-state public education topped $22,000. Tuition alone shot up nearly 70% at many institutions over the past decade, and coupled with the hit that family income took during the recession, the total heft of loans skyrocketed.

"Student loan debt is the only kind of household debt that continued to rise during the Great Recession and has now the second-largest balance after mortgage debt," wrote Donghoon Lee, an economist at the Federal Reserve Bank of New York upon release of the group's recent report on the problem.


The total amount of student loans in the U.S. reached $1 trillion in 2012, according to that New York Fed study, triple what it was just eight years earlier. But it's not students alone taking on this debt: $149 billion, or 15% of the balance, is held by nearly 7 million Americans over age 50. And those over 60 are actually the fastest-growing age group for college debt, responsible for $43 billion in 2012 compared to $8 billion in 2005.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,031.14 +43.63 0.26%
S&P 500 1,984.13 -1.41 -0.07%
NASDAQ 4,518.9020 -48.6960 -1.07%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs