FOX19 Investigates: Parents drowning in kids' college debt - WAFB 9 News Baton Rouge, Louisiana News, Weather, Sports

FOX19 Investigates: Parents drowning in kids' college debt

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(FOX19) -

We all know how tough it is to find a job these days. But it's actually not as hard to find work if you have a college degree. According to the federal government, the unemployment rate for those with at least a bachelor's degree is only 4.1-percent. So it's no wonder parents are doing everything they can to send their kids to universities.

But the cost can literally be too high, putting the parents' retirement in danger.

A newly released study shows the number of households trying to pay-off college debt is at a record high --- one out of five households.

Jean Andes and her husband Mark Hilliard had the best of intentions when it came to saving for their kids' college. But it's not easy.

"It's hard to save when you're paying the mortgage and your utilities," Jean said.

So when their daughter, Kayla, and their son, Ian, went off to school they had to take-out loans to send them to college because scholarships didn't pay nearly what the tuition cost. Two four-year degrees for their kids added-up to $120,000 worth of debt.

"It cost us about as much to borrow to put our two children through college as it did to buy our house," Mark said.

They're part of a growing number of Americans facing massive loan amounts to help their kids cover college costs.

"There's an increasing trend with people who are age 40-50 having the fastest growing amount of student loan debt outstanding," said Mark Kantrowitz of FinAid.org.

He points out it's typically not debt from the parents' undergraduate degrees that they owe but other loans.

"Parent PLUS loans, (loans) from their graduate education, and from cosigning on private student loans," Kantrowitz said.

The amount borrowed for Parent PLUS loans, which are offered through the federal government, has doubled in the last decade. The average balance is now $34,000. More parents than ever are now borrowing for their children's educations. With the cost of college rising steeply, the average amount of debt the parents are taking on is also growing.

"It's the only form of federal education loans that doesn't have an annual or aggregate loan limit," said Kantrowitz.

The Great Recession changed an important factor in these loans, too. Fewer students can now get loans on their own.

"Before the credit crisis about half of all student loans required cosigners," he said. "In the aftermath of the credit crisis and today, more than 90% of new private student loans require cosigners."

Jean and Mark cosigned for their kids. They hope to have everything paid off in seven to ten years.

Kantrowitz stresses parents shouldn't cosign for 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 into their retirement," said Kantrowitz.

And even though they have no regrets, Jean and Mark 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," said Hilliard.

Katrowitz makes 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 isn't always necessary.

Also, don't forget that everything's negotiable. You can try to negotiate with your child's chosen college over the dollar amount in the scholarships they're offering your child. And you can try to negotiate with financial institutions over the amount of interest and fees charged for the student loan.

Kantrowitz's website has a financial calculator you can use that will estimate the likely monthly payment you'll have to make for a student loan. And it'll also show you how much money you'll need to make each year to pay it off.

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