After years of facing all sorts of financial pressures they never expected, from adult kids moving back home to their own parents needing help to retire, empty nest parents are struggling with a new headache.
Thinking it was only natural to want to help children and grandchildren, many co-signed student loans.
Now, they’re becoming the latest victims of the nation’s mounting problem with student loan debt, which surpassed the $1 trillion mark last year.
At a growing rate, young graduates who are either out of work or who didn’t land high-paying jobs find themselves unable to pay their loans.
When primary borrowers stop paying, co-signers are expected to pick up the tab–and soon find themselves fending off debt collectors.
Neither lenders nor regulators track student-loan co-signing, but experts say there are a host of signs pointing to this new burden for parents and grandparents.
According to the Federal Reserve Bank of New York, some 2.2 million Americans who were 60 or older owed $43 billion in federal and private student loans at the end of the first quarter this year, up from $15 billion in 2007, just before the financial crisis erupted.
For co-signers, the consequences of not paying are severe. Story by Kelly Greene for the Wall Street Journal.
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