Josh Boak’s Associated Press article on the multigenerational effects of high amounts of student debt is making the rounds, and for good reason. Here’s a sample of what Boak reports:
- 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 school 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.