By TAMAR LEWIN
When Michele Fitzgerald and her daughter, Jenni, go out for dinner,
Jenni pays. When they get haircuts, Jenni pays. When they buy groceries,
Jenni pays.
It has been six years since Ms. Fitzgerald — broke, unemployed and in
default on the $18,000 in loans she took out for Jenni’s college
education — became a boomerang mom, moving into her daughter’s townhouse
apartment in Hingham, Mass.
Jenni pays the rent.
For Jenni, 35, the student loans
and the education they bought have worked out: she has a good job in
public relations and is paying down the loans in her name. But for her
mother, 60, the parental debt has been disastrous.
“It’s not easy,” Ms. Fitzgerald said. “Jenni feels the guilt and I feel the burden.”
There are record numbers of student borrowers in financial distress,
according to federal data. But millions of parents who have taken out
loans to pay for their children’s college education make up a less
visible generation in debt. For the most part, these parents did well
enough through midlife to take on sizable loans, but some have since
fallen on tough times because of the recession, health problems, job
loss or lives that took a sudden hard turn.
And unlike the angry students who have recently taken to the streets to
protest their indebtedness, most of these parents are too ashamed to
draw attention to themselves.
“You don’t want your children, much less your neighbors and friends,
knowing that even though you’re living in a nice house, and you’ve been
able to hold onto your job, your retirement money’s gone, you can’t pay
your debts,” said a woman in Connecticut who took out $57,000 in federal
loans. Between tough times at work and a divorce, she is now teetering
on default.
In the first three months of this year, the number of borrowers of
student loans age 60 and older was 2.2 million, a figure that has
tripled since 2005. That makes them the fastest-growing age group for
college debt. All told, those borrowers owed $43 billion, up from $8
billion seven years ago, according to the Federal Reserve Bank of New
York.
Almost 10 percent of the borrowers over 60 were at least 90 days
delinquent on their payments during the first quarter of 2012, compared
with 6 percent in 2005. And more and more of those with unpaid federal
student debt are losing a portion of their Social Security
benefits to the government — nearly 119,000 through September, compared
with 60,000 for all of 2007 and 23,996 in 2001, according to the
Treasury Department’s Financial Management Service.
The federal government does not track how many of these older borrowers
were taking out loans for their own education rather than for that of
their children.
But financial analysts say that loans for children are
the likely source of almost all the debt. Even adjusted for inflation,
so-called Parent PLUS loans — one piece of the pie for parents of all
ages — have more than doubled to $10.4 billion since 2000. Colleges
often encourage parents to get Parent PLUS loans, to make it possible
for their children to enroll. But many borrow more than they can afford
to pay back — and discover, too late, that the flexibility of
income-based repayment is available only to student borrowers.
Many families with good credit turn to private student loans, with
parents co-signing for their children. But those private loans also
offer little flexibility in repayment.
The consequences of such debt can be dire because borrowers over 60 have
less time — and fewer opportunities — than younger borrowers to get
their financial lives back on track. Some, like Ms. Fitzgerald, are
forced to move in with their children. Others face an unexpectedly
pinched retirement. Still others have gone into bankruptcy, after using
all their assets to try to pay the student debt, which is difficult to
discharge under any circumstances.
The anguish over college debt has put a severe strain on many family
relationships. Parents and students alike say parental debt can be the
uncomfortable, unmentionable elephant in the room. Many parents feel
they have not fulfilled a basic obligation, while others quietly resent
that their children’s education has landed the family in such difficult
territory.
Soon after borrowing the money for Jenni’s education, Ms. Fitzgerald
divorced and lost her corporate job. She worked part-time jobs and
subsisted on food stamps and public assistance.
“I don’t really feel guilt, but I do know that this is all because of a
loan taken out on my behalf,” said Jenni, who has a different last name
and agreed to be interviewed only if it would not be disclosed. “I asked
my mother to move in with me, because I couldn’t stand it that she was
living in a place with no heat and a basement that kept flooding.”
The unusual arrangements, and strained family dynamics, can be awkward.
Like Jenni, many with student debt problems agreed to be interviewed
only on the condition that they not be identified because they did not
want to expose their financial troubles.
“It makes you feel like a failure as a parent, to be unable to help your
children and to have all your hard work end in a pile of debt,” said
one New Jersey man, who took out a second mortgage of $280,000 to help
cover his children’s college costs. “I sent my older kids to private
colleges, and I was happy to do it because it’s how you help them get
started off. But I can’t do it for the youngest, and I haven’t even been
able to start the conversation with him.”
Ms. Fitzgerald said she had little hope of a comfortable old age. She
has no health insurance. She knows that the odds of finding a good job
in her 60s, with no college degree, are slim — and she knows that the
government will take part of her Social Security, in payment of her
debt, which she said had now ballooned to about $40,000 because of
penalties for nonpayment. At one point, she said, the Internal Revenue
Service seized a $2.43 tax refund.
Jenni has volunteered to take on her mother’s debt, but Ms. Fitzgerald
has refused, saying it is her legal and moral obligation, and anyway,
Jenni has her own loans to pay off — about $220 a month — and not much
discretionary income. The very suggestion that Jenni might take on her
debt annoys her.
“Don’t you think she is doing enough for me now by supporting me a
hundred percent, financially, by my living with her and her extending
her resources?” Ms. Fitzgerald asked. “The whole idea was for her to get
a college education so she can succeed in life; it is hard enough just
to do that without being burdened with her mother’s welfare, like I was
her child.”
Jenni occasionally jumped in with explanations or clarifications, as she
and her mother sat in the living room discussing their situation. When
Ms. Fitzgerald talked of being depressed last year, so overwhelmed by
the cartons of documents and dunning letters that she threw them all
out, Jenni said gently, in an almost maternal tone, “But you’re doing
much better now.”
Many young people live with deep guilt that their education has pushed
their parents into debt, and perhaps ruined their credit rating. Even
those who do not know exactly how much money their parents have, or how
much they owe, worry about how their debt will affect their parents’
lives.
One 27-year-old man from East Texas, who earned a bachelor’s degree in
California, is now nearing graduation with another bachelor’s degree, in
Russian literature, from Columbia University. He said he did not know
how much debt he and his mother had accumulated in the course of his
educational wanderings, sounding almost paralyzed by the prospect of
talking to her about it.
“I should know how much I owe, and it’s sad that I don’t,” he said. “I
feel like I’m standing on the train track and I can hear the rumble of
the train coming, and I don’t know how hard the train will slam into
me.”
In one extreme case, student debt, and the constant creditor calls, were
mentioned in a suicide note by the stepfather of a young law school
graduate. The guilt has been crushing for the graduate.
Teresa Tosh, 56, a mother of five who works for the county government in
Tulsa, Okla., had co-signed large graduate and law school loans for one
of her sons, Jacob, who has a different last name. In total, he owes
more than $200,000 on his federal loans, in addition to more than
$100,000 on the private student loans his mother co-signed.
But like many recent law graduates, Jacob had trouble finding a job, and
when he finally found one, an hour from home, the salary was nowhere
near enough to cover loan payments. Creditor calls to both Jacob and to
his mother became more and more frequent.
Jacob talked to the collectors when they called, and tried to work out
payments as best he could. But shortly after one call ended, he and his
mother said, the phone would ring again: another collection agent, in
another part of the country. Ms. Tosh’s husband, George, a Vietnam
veteran who worked from home, concluded that Jacob was lying about
trying to work things out, deceiving Ms. Tosh, ruining her credit and
leaving her holding the bag.
The household tension grew intense, and in July 2010, Mr. Tosh shot
himself, leaving a note saying that he could no longer stand the
incessant calls from Sallie Mae, one of the lenders.
“Jake has destroyed us. You can’t tell me that sally mae is getting paid
when they keep calling all day, every day,” he said in a note to his
wife. “I can’t even answer the phone in my own home no more. I can’t
live like this no more.”
Ms. Tosh said she was “not naïve enough to think the Sallie Mae calls
were the only reason” that her husband killed himself. “But they were
adding a lot of stress,” she said. “They’d never stop calling.”
A few months after the suicide, Jacob moved to Dallas and got a
document-review job. The pay is not enough to meet his loan payments —
or even full interest — but his creditors agreed to let him make
partial-interest-only payments for two years. While his balance
continues to grow, that arrangement protected his mother from payment
demands for two years.
“It’s made my life so much more stressful and guilt-filled because I
know that it affects her,” Jacob said. “I barely have enough money to
pay the bills, but if I miss by a day, they call her.”
Jacob pays about $1,200 a month toward the debt, more than he pays for
rent. He and his mother are carefully rebuilding their relationship,
after a period of great tension. Ms. Tosh traveled to Dallas for his
birthday.
“She’s been really good about it,” Jacob said. “It’s always there, but she doesn’t bring it up.”
Copyright 2012 The New York Times Company. All rights reserved.
