By Kathryn Wolper
The Washington Post reports that consumers over 60 now hold $66.7 billion in student loan debt. This figure has grown from $8.2 billion in 2005. Seventy-five percent of this debt was incurred on behalf of children or grandchildren. This report from the Consumer Financial Protection Bureau demonstrates that the rising cost of college education and the hurting job market affect both recent college graduates as well as the adults who support them financially.
One can imagine that, going forward, the effects of student loan debt on the economy will be compounded as educational costs continue to increase. If a recent college graduate struggles to pay off his or her own loans and is then burdened with the cost of his or her children’s education, the luxury economy will suffer. Vacations, meals out and entertainment may drift out of reach for many consumers.
Necessities, in addition to luxuries, are also threatened by these large amounts of student loan debt. The Washington Post reports that many older people with student loan debt frequently miss important doctor’s appointments due to affordability issues or do not receive Social Security payments due to outstanding debts. This burden threatens the health and livelihood of older Americans. Debt serves as an economic tranquilizer, reducing both spending and opportunity for older Americans, many of whom are typical participants in the leisure economy.
Although student loan debt is generally considered to be a young person’s issue, this report shows that the effects of costly education transcend generations and have a broader impact on the economy than anticipated. This issue is not short lived, either; unless education becomes more affordable, or jobs become more plentiful and lucrative, debt will continue to rise and the range of young people who can feasibly afford a college education will narrow.
Unless the American outlook on higher education radically changes, a college education itself may rise to luxury status. High school graduates must consider their higher education plans practically instead of choosing a prestigious four-year university based on its name. Students will be compelled to consider scholarships, grants and alternative educational options like trade schools or Associate’s Degree programs with the goal of jobs in either service sectors or manufacturing sectors. One potential pitfall in fewer students attending college is a decrease in highly trained professionals in a variety of fields. Fewer doctors, for example, could cause healthcare costs to skyrocket. While many of these potential fixes for rising debt and their repercussions are hypothetical, they are worth considering as student loan debt approaches a critical tipping point for people of all ages. Surely, the landscape of higher education and the demand for it will radically change if its cost continues to rise disproportionately to its value for young job seekers.
