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.
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,
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if you're a returning student, the stakes may be higher and the odds may be even steeper.If a worker's skill set is outdated, and it's unlikely they'll be picked up by a new employer, then going to school is probably the closest they'll get to an escape hatch.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.
Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at firstname.lastname@example.org, or follow him on Twitter at @bruce1971.