Educational borrowing has grown far more quickly among those between 35 and 49.

According to a new analysis obtained by Reuters,  middle-aged borrowers are piling up student debt faster than any other age group.

Educational borrowing is up for every age group over the past three years, but it has grown far more quickly among those between 35 and 49, according to the analysis of more than 3 million credit reports provided to Reuters by the credit score tracking site CreditKarma ( That group saw its school debt burden increase by a staggering 47 percent, according to the analysis.

The average student loan debt for those aged 38 to 41 was the biggest of that group — about $12,000, up from just under $9,000 in 2009. Young people still carry the biggest student loan burdens; those aged 26 to 29 have an average of $14,000 in student debt. But the increased levels in middle-aged student debt is a new phenomenon.

Credit Karma CEO Kenneth Lin says the reason is obvious: The tough economy has pushed people to seek mid-career training.

“More and more people are going back to school,” he says. “High unemployment, rising tuition costs, artificially low interest rates from the government, and increased for-profit school advertising… (adds up to) consumers taking on student loan debt at an alarming pace.”

For-profit schools tend to saddle more debt on older students with poorer credit than traditional institutions, he said.

For example, Atlantan Janice Derrick might be typical. She was 47, with 25 years of work experience when she got laid off nearly three years ago as an executive assistant. She applied for about 200 jobs without getting a single call.

“Not even temp agencies were taking on people,” she says.

Derrick took an aptitude test and found she was well suited to be a social worker or school counselor. But she did the math and realized the low salary expectations and the amount of additional schooling weren’t a great combination. So she decided to study to become a court reporter instead, and amassed about $25,000 in student loan debt for her training. That was on top of the credit card debt she accumulated while unemployed.

Now 50, she just got her court reporting license, and she says she’s hopeful.

“I am still worried about money, but there is plenty of work,” Derrick says. “Unlike most of my friends, I am starting to catch up.”


Derrick has been working with a financial planner, Cristina Briboneria, vice president, oXYGen Financial in Alpharetta, Georgia.

Briboneria says she sees similar, and sometimes less-positive situations with people from all walks of life.

College loans are a huge problem beyond just this recent move into an older demographic. The financial aid site estimates the amount of outstanding student loans at $966 billion, which surpasses even the amount of credit card debt in the US .

Mitchell Weiss, co-founder of the Center for Personal Financial Responsibility at the University of Hartford, which gives students personal finance guidance, says he’s not surprised to see the trend and has words of caution for those who are considering taking on student debt in a career change: It’s easy to get student loans – perhaps too easy.

“The loans they take are often times more than they can tolerate. And they can’t always score a better job to pay for them… Everybody believes they will get out school, get a job and pay it back. Few really take the time to do the math and decide how much they could afford to borrow,” he says.

The best bet for anyone who feels as though additional schooling will help their job prospects is to enroll while they’re still employed and they are able to take advantage of any education support from their employer.

If that opportunity’s already gone, it’s important to do a realistic evaluation as to whether the job opportunities are going to justify the expense. Weiss says he knows people who assumed a mid-career change would be successful simply because they went back to school and got a master’s degree in business. But a degree without any related experience could put a 40-something in competition with a 20-something graduate who’s done internships and may be willing to work for less.

Going back to school and accumulating debt without a realistic plan to pay for it is a “roll of the dice,” Weiss says.

Both Weiss and Lin noted that this government-backed debt, unlike most other debt, cannot be discharged in a bankruptcy, so it is an albatross for those who can’t make enough money after going back to school.

“Some of my clients have come out of their programs with over $100,000 worth of debt and are unable to find a job making six figures,” Briboneria says. “Because of the economy, many employers have an abundance of candidates to choose from for their open positions who will work for less money to pay the bills.”

There are some alternatives to piling up student debt for those who do want to take the chance and go back to school. Explore what support might be available to you:

–Does you state offer grants toward job training and education if you’ve been laid off?

–Look for grants or student loan forgiveness if you pursue certain career paths, such as teaching.

–Shop around for aid packages from schools you’re interested in attending. The Department of Education says some colleges and universities will offer a “bargain” tuition for older students.

–Ask a prospective college or university if they will award life experience credit to help offset the number of classes you might have to pay for.

Photo credit: Joshua Kennon

Via Reuters