Parents Feel the Weight of Student Loan Debt
Older parents are worried student loan debt will hurt their retirement.
When we think of student loan debt, young people typically come to mind. We imagine them being unable to make major financial moves, like buying a house, because they're crushed by college bills. However, a new survey showed that it's not just students and young people who are feeling the weight of student loans, parents approaching retirement age are feeling it as well.
According to a study by Citizens Financial Group, 54 percent of parents expressed concern that their own retirement will be hurt by student loan debt. The report also showed that 94 percent of parents reported an "increased financial burden" from their kids' debt and 45 percent reported that they don't know what they're going to do about it. The reason for all this worrying? Parents still view higher education as vital to their kids' lives, but are unable to keep up with the rising costs of college.
"Households are feeling the pinch of higher tuition costs and it's starting to impact other big things in their lives," Citizen Financial Group's president of auto and education finance Brendan Coughlin, explained to CNBC. "Getting a college degree is still very much a part of the American dream. Parents are very aware and supportive of this, but they're also very worried about the cost and how to pay for it."
The good news is there are ways to prevent student loan debt from saddling you with bills and fear. For starters, get started saving. Don't wait until your kid is a junior in college to research loans and build up a hefty amount of savings. Look into every possible grant and scholarship before you apply for loans. If you have to take out a loan, only borrow what you can pay back in (at the most) 10 years or by the time you retire. Whichever will come first. And, if you're already in the payback period, know that there are now many lenders who are willing to refinance that debt at lower rates. It's not a no brainer, but as Jean Chatzky wrote in Fortune, it's worth a look.
Article was written by Chris O'Shea and provided by SavvyMoney®.