Menachem Ben-Judah, 31, a marriage and family therapy graduate student, starts on his classwork in the Lee University Humanities Building in Cleveland, Tenn. The money Ben-Judah is borrowing to obtain his graduate degree adds to the debt he already incurred as an undergraduate.
Paul Ferris, a special education teacher at Rivermont Elementary School, holds a master's of education in special education but is currently studying for an education specialist degree in instructional leadership. He hopes to one day become a school principal and views the cost of returning to college as investment not an expense.Senior student debtIt's estimated that, of the 22 million households with student debt, about 706,000 are headed by someone over the age of 65, according to the U.S. Government Accountability Office. Though seniors owe only about 3 percent of the total amount, those numbers have been going up -- from about $2.8 billion in 2005 to about $18.2 billion last year, the GAO says.And if seniors aren't able to make the monthly loan payments, the government can take the payments out of Social Security.In 2005, the U.S. Supreme Court decided there's no statute of limitations on using Social Security money to repay student loans, so that loan you took out when you were 20 years old and stopped paying on when you were 30, if it was guaranteed by the federal government, you're still on the hook for it when you're 65.In 2013, 156,000 Americans had their Social Security checks garnished because of student loans they defaulted on, a rate more than three times higher than the 47,500 who defaulted in 2006, before the Great Recession, according to CNNMoney, which did an analysis of U.S. Treasury information.By law, the government can take up to 15 percent of a Social Security check, as long as you still get at least $750 monthly.
Menachem Ben-Judah is setting some high goals for himself - but it comes at a cost.
Student loans.
The 31-year-old married father of two is taking on long-term financial debt to attend graduate school at Lee University. Ben-Judah, of Cleveland, Tenn., is studying to be a marriage and family therapist, a career he expects to give him not only personal satisfaction but, hopefully, financial security.
"After finishing this grad program and then earning a doctorate, I will certainly have more opportunities to earn wages that will be sufficient," says Ben-Judah, a full-time graduate student.
The money Ben-Judah is borrowing to obtain his graduate degree adds to the loan debt he already incurred as an undergrad. And, though he won't say what the total amount is, with the combined loans, he could be into his 40s before he has paid them back.
He won't be alone.
In the past decade, the amount of student loan debt that Americans owe has doubled to well over $1 trillion, according to a report by the U.S. Government Accountability Office. In 2010, student loan debt surpassed credit card debt to become thesecond largest form of household debt after mortgage. Before 2008, student loans were the smallest household debt.
And, while those under 30 used to hold the majority of student loan debt by far, the numbers are drifting upward.
According to a 2012 study of credit data by the Federal Reserve Bank of New York, about 33 percent of the total student loan debt in the U.S. was owed by people under age 30, while another 33 percent was held by those age 30 to 39, 17 percent by people over 40, 12 percent by those in their 50s, and the rest by those over 60. For those over 30, the percentages have steadily climbed each year since 2004, the study showed.
For older students, heading back to college can help them climb the corporate ladder, find a higher salary or, especially after the Great Recession and its massive layoffs, switch careers completely.
The National Center for Education Statistics states that more than 3.9 million people age 35 and over were in college, graduate school or technical school in 2010, the last year data is available. That's a 20 percent increase from 2006, when the Great Recession started. The center expects the number of middle-aged people in such schools to hit about 4.1 million by 2015.
But heading back to college is risky. The amount of loans needed to complete a brand-new major or earn a master's degree or Ph.D. can be staggering, especially if the money must not only cover school costs such as tuitions, fees and books, but also living expenses if the person must cut back on work hours to attend class.
Repayment of student loans doesn't start until several months after a person has completed a degree or left school, but for some, those monthly payments can take a big bite, especially if that higher-paying job doesn't come through despite the new degree or if expenses such as unexpected medical bills pop up.
Many student loans are guaranteed by the U.S. Department of Education, making them one of the few things that cannot be erased by bankruptcy. Borrowers who can't pay down the road face withheld tax refunds, garnished wages or lawsuits. And, if you're over 65, the government can take money out of Social Security checks.
Ben-Judah is confident that he will be able to repay his loans.
"I have not entered my repayment period yet because I am still a full-time student," he says. "I am actually hoping to work with a nonprofit organization, and it just so happens that working for a period of 10 years for an approved nonprofit organization is one of a few options for loan forgiveness."
Even if he must repay the loans on his own, it could be a decade after he gets his doctorate before he's able to completely repay them, he acknowledges.
"A decade or longer is a realistic place to start if someone knows that they will be using a significant amount of loans," Ben-Judah says. "However, our state has many options for paying for college."
But the education is worth the financial burden, he says.
"The important thing for people who are considering college and giving school another shot is that each individual should consider both the cost of an education and the value of it on a personal basis," he says.
Changing demographics
Whatever the reason for returning to school, an increasing number of nontraditional students, (typically defined as those age 25 and older), are heading back to college at local universities, including University of Tennessee at Chattanooga and Lee University in Cleveland.
At UTC, the number of nontraditional undergraduates increased slightly since 2013 and the number of graduate nontraditional students decreased slightly, says UTC spokesperson Cindy Carroll.
The number of nontraditional students at Lee, however, is exploding.
"Our adult learning population has increased every year since 2010 and has grown by 157 percent over the past four years," says Stacey Tucker, director of Institutional Research and Assessment at Lee.
Jayson VanHook, vice president for information services at Lee, credits the increase to the university's focus on building its online learning capacity through the division of adult learning.
"The majority of these students are utilizing loans for their education; however, most of our programs for adults online are deeply discounted as they are focused on ministerial training," he says. "A couple of new graduate programs have led to some growth as well, and their borrowing patterns align similarly to the traditional students."
Jodi Johnson, vice president for student affairs at Dalton State College in Dalton, Ga., says the opposite is true at her school since the school changed from a two-year college to a four-year institution.
"In the past, we always had a nontraditional population at Dalton State with the average age of students being 28. Now it's 24 years old," she says. "The reason is that we no longer have the 'technical mission.' We're now a 4-year college, so the older students are no longer coming to us as a technical school. Students now have the opportunity to pursue multiple careers here."
Back to school
Chris and Becca Schultz, of Chickamauga, Ga., both in their early 40s and the parents of three grown children and a 3-year-old grandchild, are back in school.
Married since 1990, the couple, both college dropouts, always planned on returning to college. Becca, who's pursuing a career in early childhood education, will soon graduate from Chattanooga State Community College and will transfer those credits to UTC, where Chris is studying to find a job in wildlife service. Both are enrolled full-time with plans to graduate in the spring of 2016. Chris predicts their combined loan debt will be around $60,000.
"We waited until the kids were grown and we were virtually debt-free before going back to college," Becca says, noting that she quit her job as a preschool teacher to concentrate on her education. Chris, 41, works part-time at UPS.
And, like Ben-Judah, they had to get loans to finance their education.
"We planned on this, " Becca, 43, says. "It won't take us long to pay it back. ... We will work as soon as we graduate, and we'll start taking care of it right away.
"We haven't taken out loans that are hanging over our heads," she says. "That's why we tried really hard to be in good financial shape before going back to school.
"That's the problem with a lot of people going back to college. They'll take out loans for as much money as they can and they'll spend it all -- and not just on school -- and not think about paying it back. We are paying close attention to our money and making good use of it."
Former Chattanooga resident Brett Clark, now a student at the University of Texas' McCombs School of Business, is back in school to earn a master's in business with a concentration in real estate finance. To do so, though, she must take out loans to cover both her college and living expenses for the two years it will take her to earn the degree.
"I got a loan to go back, which I have to apply for each year," says Clark, 32. "I hope it is not a huge financial burden but, depending on interest rates -- I chose a floating rate -- and my salary, post graduation has the potential to be a burden."
To date, Clark says her loans are close to $55,000, but she expects that to double -- if she applies for a loan for her second year -- by the time she is expected to graduated in May 2016.
"I am paying monthly interest while in school so it doesn't compound," she says. "There was a cap on how much I could borrow based on tuition. I am paying the majority of my living expenses from my savings account. It would have been hard to cover everything just on the loans, but I suppose it would have been possible."
Eyes open
Paul Ferris of Signal Mountain is going further into debt with eyes wide open.
A special education teacher at Rivermont Elementary School, the 45-year-old Ferris holds a master's of education in special education and is now a student at Lincoln Memorial University, a private liberal arts college in Harrogate, Tenn. He is working on an education specialist degree in instructional leadership and meets with a Lincoln Memorial representative at Chattanooga State once a month during the school year and twice monthly during the summer.
"Going back to school was contingent on getting student loans," says Ferris, married and the father of four. "My children are old enough now that I feel comfortable pursuing my ambition to some day becoming a school principal."
But taking out more student loans was something he had to discuss with this wife.
"In the end, my wife agreed that returning to school was more of an investment than an expense," he says. While he'd rather not disclose the amount he expects to owe, it would be less than the cost of a new car, he says.
"I managed to avoid student loans while I was going to school part-time, but when I started attending school full-time in my late 20s, I started borrowing money to pay for school," he says. "Sadly, my student loan debt has changed very little in the last 10 years. Going back to school has meant going further in debt."
Ferris says he'll also have to get college loans for his children.
"How quickly I am able to pay back my own loans greatly depends on how much I will have to borrow for my children to go to school," he says. "My daughter, Alex, will start college next fall, and my son starts before she is finished with her first four years. I honestly do not know how long it will take to pay off my educational loans."
And though he hopes to have a job with pay that covers the expenses of paying back the loans, Ferris is not banking on it.
"Higher pay is really not an incentive," he says. "It would take many years to recoup the cost of tuition. However, I do believe in the long run I will be better off financially."
Contact Karen Nazor Hill at khill@timesfreepress.com or 423-757-6396