When Connie Green started graduate school 20 years ago, she hoped it would put her on track for a better career.
Two decades later, Green is dealing with an effect of her time in graduate school that she never expected — a mountain of student loan debt that she anticipates will follow her until she retires.
Green, 54, graduated from the University of Central Oklahoma with a master's in English in 1994. When she started school, she took out private student loans to pay her tuition and other expenses.
She is still making monthly payments against those loans and expects to be paying for at least the next 10 years.
Green isn't alone. Recent data from the New York Federal Reserve Bank suggests a growing number of Americans ages 50 and older are saddled with student loan debt.
For Green, loan deferments were the beginning of her problems. After she graduated, it took her two years to find a job that paid enough for her to begin repaying her loans. So she had her loans deferred, not realizing they continued to accrue interest during the deferral period. The interest on her loans placed her even further in debt once she began paying.
Green now works for the state Department of Human Services.
She makes a comfortable living, she said, but not enough to double up payments on her student loans as she'd like.
“I don't mind paying for my education,” she said. “I just don't want to pay it back three or four times.”
Student debt is $902B
Overall, Americans owed $902 billion in student loan debt at the end of the first quarter of 2012, according to the Federal Reserve data. Although the largest share of the nation's student debt — 34 percent — belonged to borrowers ages 30-39, the debt held by those ages 50 and older has steadily risen in recent years.
At the end of the first quarter of 2012, 6.8 million Americans 50 and older owed debt incurred from student loans, according to the data. Debt held by borrowers ages 50-59 more than tripled from the first quarter of 2005 to the first quarter of 2012, rising from $34 billion to $106 billion. Borrowers ages 60 and older saw their debt grow as well, spiking from $8 billion to $43 billion in the same period.
Student loans across all age groups have ballooned in recent years, growing 148 percent since 2005. According to the report, student loans are the only form of consumer debt that has grown since consumer debt reached its peak in 2008.
The average loan balance increased in the same period. Between 2005 and 2012, the average student loan for borrowers ages 50-59 climbed from $14,714 to $23,183. In the same period, the average loan balance for borrowers 60 and older rose from $11,780 to $19,225.
Growth of student loan debt has outpaced auto loans and credit card debt, making it the largest form of consumer debt other than mortgages, according to the report.
Jennifer Mishory, deputy director for advocacy group Young Invincibles, said student loans are particularly burdensome because, unlike other forms of debt, it's nearly impossible to discharge student loan debt in bankruptcy.
Shift in college costs
Student loans are becoming increasingly necessary because of the rising cost of college. Those rising costs are partly the result of a drop in state funding for public schools, Mishory said.
According to a recent study from nonprofit group Demos, state funding for higher education nationwide has increased about $10.5 billion since 1990, but funding per student has declined by about 26 percent in the same period, leaving students to make up the difference.
That trend also exists in Oklahoma. Since the 1980 fiscal year, the University of Oklahoma has seen tuition and fees overtake state appropriations as the university's largest funding source.
In 1980, the university received 38.1 percent of its budget from the state. Just 10.4 percent of the university's budget came from tuition and fees, making it the fourth-largest revenue source.
Last year, state appropriations accounted for 18 percent of the university's budget. Tuition and fees, the largest revenue generator, made up 27.7 percent of OU's budget.
At Oklahoma State University, state appropriations accounted for 42.6 percent of the university's budget in 1980 — by far the largest share. Last year at OSU, state appropriations and tuition and fees each made up about 21 percent of the university's budget.
The largest percentage of OSU's budget last year came from auxiliary enterprises, such as residential life, dining services and revenue from use fees at Lake Carl Blackwell.
That money accounted for 26 percent of the university's budget.
The growth of student loan debt among borrowers age 50 and older is likely due to a number of factors, Mishory said, including parents borrowing to pay their children's tuition and a growing pool of older, nontraditional college students.
Age adds to burden
Although paying back student loans presents a challenge for any borrower, Mishory said, it can be even more difficult for older borrowers who often are repaying the loans while paying for their children's school and planning for retirement.
An added challenge is that health care costs tend to increase with age, she said.
“Having the burden of a monthly payment that can be really large really can affect anyone's ability to save for retirement,” Mishory said.
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