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CHICAGO (CBS) – A huge burden is now falling on parents: One in five households is struggling to pay off college debt.
As CBS 2’s Susan Carlson reports, more moms and dads are finding themselves making the payments on their children’s student loans just when they should be saving for retirement.
Jean Andes and her husband Mark Hilliard had the best of intentions when it came to saving for their kids’ college.
When their daughter Kayla and son Ian went off to school, scholarships didn’t cover it. They took out loans, lots of them.
Two, four-year degrees added up to $120,000 worth of debt.
“It cost us as much to borrow to put our two children through college than it did to buy our house,” Hilliard says.
They’re among a growing number of Americans taking on massive debt to help their kids cover college costs.
“There’s an increasing trend with people who are age 40 to 50 having the fastest-growing amount of student loan debt outstanding,” says Mark Kantrowitz of Finaid.org.
Parents are also co-signing loans for their kids.
“In the aftermath of the credit crisis … more than 90 percent of new private student loans require co-signers,” Kantrowitz adds.
Jean and Mark co-signed for their kids. Kantrowitz stresses parents shouldn’t co-sign or take out loans that will take longer than 10 years to pay off.
“If they’re borrowing more than that, it’s going to eat in to their retirement,” he says.
Jean and Mark hope to pay everything off in seven years, but they admit this debt is making a dent in their lifestyle.
“Now that the kids are gone we could do more traveling if we didn’t have the student loans to pay,” Mark says.
Experts are making a point of telling parents and students to only borrow what they really need. There’s a tendency to borrow to the loan limit and that is not always necessary.