Middle-Aged Workers Flock Back to School ... and Student Loans

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Middle aged studentsForget part time work, job fairs and temp agencies: To find a secure, long-term job, most pundits agree, the best route runs through the classroom. So with unemployment still high and underemployment even higher, it's hardly surprising that droves of middle-aged Americans are rushing back to school -- and borrowing more money than ever. In fact, while every age group are borrowing more money in student loans, the fastest-growing demographic isn't in its 20s; it's in its 40s.

In 2011, educational borrowing -- and the furor over student loans -- reached a boiling point. Right now, the average college grad leaves leaves school carrying more than $25,000 in debt, and overall student loan debt is on track to exceed $1 trillion this year.

These fresh-faced grads are being joined by an ever-growing cadre of returning students. According to credit score tracking site CreditKarma, the number of 35- to 49-year-olds who are borrowing money for college increased by 47% in the last three years. The amount they're borrowing is also going up: During the same period, the average loan debt of people in this group went up from $9,000 to $12,000.

On the one hand, $9,000 is a far cry from the $14,000 debt that the average college grad in her late 20s is carrying. On the other hand, middle-aged students have less time to reap the returns on their educational investments.

When it comes to determining how much a degree is worth, the standard rule of thumb is to consider a year of salary: Students are advised to calculate the average salary of a graduate of the program and borrow no more than that amount. Assuming a 10-year loan repayment schedule, a graduate following that rule would have to pay 10% per year (plus interest) to service their debt. According to the Student Loan Network, students whose debt payments exceed 15% of their income "tend to default."

For a 25-year-old, this translates into 10 years of repayment, followed by 30 or more years of earnings that (presumably) start out higher, grow steadily and aren't reduced by student loan payments. For a 49-year-old, it means a repayment schedule that ends only eight years before social security kicks in. Denied the years of slow (but compounded) salary growth, their return on investment is likely to be much smaller.

This isn't to say that going back to school is always a bad idea. As The Atlantic's Jordan Weissmann points out,
If a worker's skill set is outdated, and it's unlikely they'll be picked up by a new employer, then going to school is probably the closest they'll get to an escape hatch. Plus there's no opportunity cost, since nobody is paying them anyway, and taking classes gives them a new resume line.
The key is to find a degree or certification program with a high rate of employment, as well as good prospects for the future. A good starting place is "What's It Worth," Georgetown University's report on the economic value of college degrees. But in a constantly-changing job market, one thing is clear: Even the best degree is still a gamble. And, if you're a returning student, the stakes may be higher and the odds may be even steeper.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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Sugardadmeet.com

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February 07 2012 at 4:06 AM Report abuse rate up rate down Reply
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February 06 2012 at 4:17 AM Report abuse rate up rate down Reply
Mike

Worried that the Federal Reserve and the U.S. dollar ARE on the brink of collapse, more than a dozen states have proposed using their own alternative currencies of silver and gold. ---NEW YORK (CNNMoney) -- Lawmakers from 13 states, including Minnesota, Tennessee, Iowa, South Carolina and Georgia, are seeking approval from their state governments to either issue their own alternative currency or explore it as an option. Just three years ago, only three states had similar proposals in place.

"In the likely event of hyperinflation, depression, or the breakdown of the Federal Reserve, State's governmental finances and private economy will be thrown into chaos," said North Carolina Republican Representative Glen Bradley in a currency bill he introduced last year.

Unlike individual communities, which ARE allowed to create their own currency -- as long as it is easily distinguishable from U.S. dollars -- the Constitution bans states from printing their own paper money or issuing their own currency. But it ALLOWS the states to make "gold and silver Coin a Tender in Payment of Debts."

February 04 2012 at 5:28 PM Report abuse rate up rate down Reply
rtgarton

Good morning: To be honest I think AOL is a lot of crap as well

January 31 2012 at 9:12 AM Report abuse +2 rate up rate down Reply
1 reply to rtgarton's comment
James Wealthyconnec

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February 01 2012 at 10:07 PM Report abuse rate up rate down Reply
n1yearocrapleft

now the stupid muslim clown is threatening to close all colleges if they dont let his black people go for free just like he did (affirmitive action) n along withtheir free welfare ~free section~8~~free food stamps~~free health care ~~all paid for by the white americans workin tax dollars ,go ahead..close all the colleges ,the muslim clown has half the country closed already n will stay closed untill this muslim clown is removed from our white house in handcuffs. ! !

January 31 2012 at 8:15 AM Report abuse +2 rate up rate down Reply
hmkiowa

So how did my son come out with almost 60k in debt?????

January 31 2012 at 7:16 AM Report abuse +1 rate up rate down Reply
1 reply to hmkiowa's comment
James Wealthyconnec

show me the !!!!!!!!!!!

February 01 2012 at 10:07 PM Report abuse rate up rate down Reply
Judy

Due to the large influx of middle aged students, the states need to allocate more money for higher education. In recent years, this budget has been decimated, driving up the price of college tuition. It should be noted that most professors don't make a six-figure salary. The increase is necessary to higher more professors, who usually have a full load of courses.

January 31 2012 at 7:00 AM Report abuse rate up rate down Reply
Vern

Middle aged people do not want to wotk for unions and pay half their salary to union bosses. At least the mafia provides protection. Going back to school for a white collar opportunity is great.

January 31 2012 at 2:05 AM Report abuse +1 rate up rate down Reply
1 reply to Vern's comment
mgran82374

Get your head out of your ... I paid 1.5% in union dues for 32 years, made probably twice as much as the non-union member and retired at 54. Go back to school so I can be your boss, I don't think so! Oh, my daughters' masters degree has been paid in full...

January 31 2012 at 7:36 AM Report abuse -1 rate up rate down Reply
Buddhaed

When the Chinese government starts to bring more manufacturing plants to the US, and US workers demand union representation, will the Chinese defend their plants as a matter of Chinese national interest?

January 31 2012 at 12:30 AM Report abuse rate up rate down Reply
Buddhaed

When the Chinese government starts to bring more manufacturing plants to the US, and US workers demand union representation, will the Chinese defend their plants as a matter of Chinese national interest?

January 31 2012 at 12:22 AM Report abuse rate up rate down Reply