NEW YORK (MainStreet)— When my daughters were nearing college age, my wife and I made a deal with them. We’ll pay full freight for any undergraduate school you attend, we told them. You’re responsible for all post-graduate expenses.
Despite their continuous run of scholarships and work-study jobs, our offer forced all of us to rely a lot more on student loans than we ever anticipated. And now, two bachelor’s degrees and a doctorate in veterinary medicine later, the Rothman family’s collective student loan debt is — gulp! — well into six figures.
We’ve all heard tales about the explosion in individual student loan debt, but not as much about the impact these loans are having on whole families. And while there’s no clear data on family indebtedness, there are plenty of indications that parents like us are piling on loan obligations as fast as our children.
“There absolutely are more parents taking out loans today to help make up the gap between other financial assistance and the cost of college attendance,” says student loan expert Heather Jarvis. “And it seems that delinquency rates are rising for these borrowers as well.”
“Student loan debt is the only kind of household debt that continued to rise during the Great Recession and has now the second-largest balance after mortgage debt,” wrote Donghoon Lee, an economist at the Federal Reserve Bank of New York upon release of the group’s recent report on the problem.