Brenda Small didn’t think twice about taking out student loans to pay for nursing school in the late 1980s. She figured she could easily pay off the $20,000 bill — until an injury a few years later left her permanently unable to work.
Her dreams of working in her chosen profession vanished, but not her student debts. Including interest and penalties, the 59-year-old Los Angeles woman now owes more than $39,000 and can’t afford to pay the debt from a disability income of $1,234 a month.
“It’s just unbearable to have that type of weight on you and you can’t do anything about it,” Small said.
Despite the perception of educational debt as a twentysomething phenomenon, Americans of all ages are on the hook for student loans that in some cases were taken out several decades earlier. And many middle-aged people are taking out new loans as they go back to school or finance their children’s educations.
Of the estimated 37 million Americans with outstanding student loans, nearly 5.5 million are 40 to 49 years old, and more than 6.3 million are 50 or older, according to the Federal Reserve Bank of New York.
“Student loan debt is now no longer isolated to young people,” said Rich Williams, a higher-education advocate at U.S. Public Interest Research Group. “It’s now across the board.”
The burden on older people is one element of a growing debate about the effects of student-loan debt on Americans of all ages.
In addition to the often significant financial effect on students and their parents, experts worry that rising education indebtedness among all age groups has wider social implications.
“People aren’t buying houses or starting families until later on and progressing on what we as a society see as the steps of life,” said Radhika Singh Miller, a student-debt specialist at Equal Justice Works, a nonprofit advocacy group in Washington.
Paying for college has been on the minds of millions of parents and students in the last few weeks as incoming freshmen decided which schools they would attend.
“Many students were waiting down to the last day because costs were a big part of the equation,” said Deborah Fox, founder of Fox College Funding in San Diego, which advises families on how to finance their educations.
“They were trying to get schools to add a little more money at the last minute [to an aid grant] or parents were trying to figure out a way to make it all work,” she said.
The financial benefits of college still outweigh the costs, according to studies.
One found that lifetime earnings of college graduates average $650,000 more than that of their counterparts who completed only high school. Another concluded that the average annual take-home pay of college graduates is nearly twice that of high school-only graduates — $38,950 versus $21,500.
Steadily rising tuition and steep government cutbacks have pushed more students to borrow increasing amounts of money.
Two-thirds of college seniors graduated with loans in 2010, compared with fewer than half in 1993, according to the nonprofit Project on Student Debt in Oakland. Total debt loads have been rising about 5% a year, with the average graduate now on the hook for $25,250.
Last year, students took out $117 billion in new federal loans, pushing the total above $1 trillion, according to the Consumer Financial Protection Bureau.
A heavy student-debt load also weighs on decisions about careers. Celeste Knight, an 18-year-old UC Berkeley freshman, is considering becoming a social advocacy lawyer, but she worries that student loans could force her to look for a higher-paying job.
“I don’t think everyone should be choosing a job based on ‘Will my income be high enough to pay off my student loan?’” Knight said. “A whole generation of students is already so far in debt that even if you get a great-paying job, you’re not going to live this great American standard of living.”
Such concerns resonate even more acutely with older students such as Tressie McMillan Cottom.
Cottom, 34, went back to school in 2010 to get a doctorate in sociology at Emory University in Atlanta and has already racked up more than $55,000 in loans, with more than two years to go.
“We make jokes about the way it influences our life choices,” she said. “My best friend said she chose her husband because he was the one without student-loan debt.”
For Brenda Small, the situation is bleak. Her inability to repay her loans hangs “like a millstone around my neck,” she said.
The U.S. Department of Education, which guaranteed her loans, briefly garnished part of her disability payments until a legal aid lawyer got them reinstated.
Educational debt also burdens many older Americans who took out loans to put their children through school.
Ellyn Herb, a 59-year-old San Jose psychologist and college professor, and her husband owe $132,000 on college loans they took out for their two sons. The couple have cut expenses and moved to a cheaper home but still have had to defer their loans for one son while paying off those incurred for the other.
“Many of us had kids late,” Herb said. “We’re headed toward retirement, but we can’t retire because we have all these loans.”
Unlike most other forms of debt, student loans funded or backed by the federal government are virtually impossible to discharge through bankruptcy.
The government frequently garnishes paychecks, Social Security payments and other forms of income of people who haven’t paid their loans.
Yet the sluggish job market is making it difficult for many recent graduates to avoid the government’s hammer.
A study released Thursday by Rutgers University showed that only half of recent college graduates are working full time.
And paychecks don’t stretch as far as they used to: The 6.4% average annual rise in college costs since 1981 far outstrips the 0.4% annual income growth, according to ConvergEx Group in New York.
“Even if you do everything right, you might find it harder to pay back your loans than you thought,” said Lauren Asher, president of the Project on Student Debt’s parent organization.
College funding has become a flash point in the presidential election and in Congress, with lawmakers sparring over the proposed extension of subsidies that have kept a lid on federal student-loan interest rates.
President Obama and Mitt Romney, the expected Republican nominee for president, both said they oppose letting the current 3.4% rate on one type of federal loan double to 6.8% on July 1. But Democratic and Republican lawmakers are clashing on how to pay for the subsidies.
Rising costs make it even more important to make smart financial choices.
Most people should save as much as possible as early as possible, experts say, and should consider investing in a 529 college savings plan, which allows investment earnings to be disbursed tax-free for tuition and certain other school expenses.
People who have to borrow should favor federal loans, borrowing directly from the government, rather than private loans, which are made by banks or other lenders, experts say.
Federal loans have fixed rates and more flexible repayment options than private loans, which typically have variable rates.
“Rising student debt is cause for concern for a variety of reasons, but it doesn’t mean you shouldn’t go to college or borrow,” Asher said. “But you have to shop around, borrow wisely as to what kinds of loans and how much, and know your repayment options.”