I've been doing a lot of thinking and talking about college access and affordability in preparation for the special State of Opportunity Issues and Ale. The event is tonight at One Well Brewing in Kalamazoo. It starts at 6:30pm.
As the student debt crisis continues to spiral out of control, the face of the issue is usually a young one. Most of my conversations about college access revolve around "college-aged kids." You know, millennials; people under the age of 34.
But millennials aren't the only age group impacted by student debt.
Roughly 6 million Gen-X (age 35 through 50) households still have student loan debt, causing many to alter their version of the American Dream. Instead of becoming homeowners, some families – like one mentioned in this article – have settled for renting an apartment so they can make their monthly loan payments.
Many parents are still paying off their student loans as their own kids go off to college. Josh Boak outlines the multigenerational impact of student debt in his latest Seattle Times article:
- School loans increasingly belong to Americans over 40. This group accounts for 35 percent of education debt, up from 25 percent in 2004, according to the New York Federal Reserve. Contributing to this surge: Longer repayment schedules, more midcareer workers returning to school and additional borrowing for children's education. - Generation X adults - those from 35 to 50 years old - owe about as much as people fresh out of college do. Student loan balances average $20,000 for Generation X. Millennials, who are 34 and younger, have roughly the same average debt, according to a report by Pew Charitable Trusts. - Gen-X parents who carry student debt and have teenage children have struggled to save for their children's educations. The average they have in college savings plans is just $4,000, compared with a $20,000 average for teenagers' parents who aren't still repaying their own student loans, Pew found. A result is that many of their children will need to borrow heavily for college or pursue cheaper alternatives, thereby perpetuating a cycle of family debt. - Student debt is surpassing groceries as a primary expense for many borrowers, with the gap widening most for younger families. The average college-educated head of household under 40 owes $404 a month in student debt payments, according to an AP analysis of Fed data. That's slightly more than what the government says the average college-educated family spends at the supermarket.
You can read the rest of Boak's article here.
There are plenty of online forums (like this one) where people have shared their nightmarish experiences trying to pay back their loans. A common thread in most of them is lack of understanding. It appears that many people take out loans without really understanding the amount they're taking out, how that amount will grow with interest, and how to make payments. This gap in understanding can be observed in both millennials and Gen-X borrowers.
Tonight's Issues and Ale gathering isn't just about 20-something-year-olds, it's about everyone affected by rising tuition costs and limited access to college. If you can't make it tonight, don't worry, we'll be live-tweeting from the event at @Issues_Ale. To join the conversation, use #IssuesandAle on social media. A summary of the conversation will be added to our website this week.
