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Student loans at age 50Posted Monday, July 30, 2012, at 4:14 PM
Statistics compiled for the Student Loan Forgiveness Act, introduced in 2012 by Rep. Hasen Clarke, D-Mich, show in the past 32 years, tuition for a four-year higher education has skyrocketed by 827 percent, and in the past 13 years, the average student loan debt has increased by a staggering 511 percent.
In 2010, total outstanding student loan debt, topping $1 trillion, exceeded total outstanding credit card debt in the U.S.
Students are finding degrees are "vastly mis-priced assets that are now hard to finance," Clarke said.
Mounting student debt may be to blame for sluggish economic recovery, as graduates put off big-ticket purchases such as homes or new vehicles.
First-quarter reports compiled by Barclays indicate there are 37 million student loan borrowers, up 14 million from 2005.
Borrowers in their 30s shoulder the largest portion of debt, approximately $307 billion, but seven million baby boomers and the over 60 crowd still owe over $150 billion.
Katherine Hawn, 51, from New Jersey, still struggles with $89,000 in loans for attending chiropractic college 15 years ago.
Educators told her she would be able to pay off loans within five years, but high interest rates have caused her loans to balloon to $150,000. Even with two jobs, Hawn told CNN Money she is worried about preparing for retirement.
Lisa Perry, 50, from California, went back to school to earn her Ph.D, and accrued $108,000 in loans. Loans from undergrad and law school had been paid off in the late 1990s, she noted.
Perry now works as a lawyer, full-time, and college communications instructor, part-time, and estimates she'll be able to tackle the loans in the next few years. Paying off her loans is her retirement plan, she says.
"I don't have regrets about my degree, but I do have regrets about taking out as much debt as I did," she said. "If I could do it over again, I would live much more frugally and be smarter with my money."
Clarke's plan calls for debt to be forgiven under a 10-10 rule: students who have forked over 10 percent or more of their income for 10 years will have their debt erased.
A petition at signon.org/sign/support-the-student-loan is aiming for 2 million signatures; 800,000 are still needed to hit the goal.
Without reform, student loans may be the next financial bubble to pop.
* Ashley Miller is a member of the news staff. Reach the columnist at firstname.lastname@example.org
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