Student Debt for the Middle-Aged

January 13th, 2012
in econ_news

Econintersect:  Many think of young college graduates saddled with college debt after graduation but the fastest growing age demographic for college debt college-grads1is between 35 and 49.  All age groups are seeing debt increasing over the past three years but those in the years most often associated with mid-life crisis have seen the fastest growth.  Younger people still have slightly more debt on average (aged 26-29 average $14,000 outstanding) but 38-41 are getting closer with $12,000, up from less than $9,000 in 2009.  The reason for the dramatic increase in college debt for those middle-aged is attributed to retraining efforts by millions of unemployed.

Follow up:

The amount of student debt is actually much larger than might be assumed from the numbers above, which is data for all student loans including those that may have been accumulated a number of years back.  In 2010 the average debt for all graduates who used loans to help fund their education was over $25,000.  And the total student debt outstanding stood at $845 billion at the end of the second quarter 2011 and seems likely to soon exceed $1 trillion. College loans surpassed credit card debt in the summer of 2010 and less than a year later was larger by $172 billion.


This leads to some questioning whether college is actually worth the money, as discussed in the following video from CNNMoney:


A particularly negative view was expressed by Gary Gibson (Whiskey and Gunpowder) on October 25, 2011:

College is not necessary for most people. It never was. In fact, the preoccupation with college has left America bereft of its former ability to create wealth.

Sources:  Reuters (from Econintersect Americas newspaper page), fastweb, Washington Post, Whiskey and Gunpowder and CNNMoney

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  1. Dig Deep says :

    Gibson quotes;
    "College is not necessary for most people. It never was. In fact, the preoccupation with college has left America bereft of its former ability to create wealth".

    Interesting claim by Mr. Gibson. I'd love to hear more about what jobs and/or internships that could absorb millions of kids, without higher education every year. Milton Friedman would suggest the minimum wage is too high for business to high and train...

    Gibson's statement is bold - without any back-up.

  2. Admin (Member) Email says :

    DD - - -

    I considered adding more to the article to point out the correlation of higher incomes with more education and the lower unemployment rates as education levels increase. I decided that was worthy of a seperate analysis article (not yet started), but I still have questions about whether there should have been at least and editor's note on this.

    I think Gibson's opinion would benefit from some analysis and I agree with you that it might not stand up, at least not without significant qualification.

    The thing I do agree with is that money is wasted on college because all too many do not get educated properly. Things we have reported on in the past include surveys that indicate that 45% (I believe) show no improvement in knowledge after the first two years of college and all too many graduate from college without employable skills. Even those who have good academic achievement in such areas as classical liberal arts have little opportunity to find employment that uses their training unless they write or teach. A few will go on to professional schools (law, medicine,dentistry, etc.) but those are not occupations for the masses. Having done both teaching and writing I can testify neither is a way to the upper middle class the way engineering or a skilled trade is.


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