MUSC commencement

The Medical University of South Carolina holds its commencement exercises on the campus of The Citadel in 2014. A new study from the University of South Carolina raises questions about how parents who take on student debt for their children will fare in retirement. File/Wade Spees/Staff

Students aren't the only ones carrying the weight of America's growing education debt. Their parents are, too.

That's the finding of a new University of South Carolina study that asked how many Americans with college-age children had taken out loans to help them pay tuition bills. That's becoming common practice, it found, suggesting that a growing number of workers are taking on debt even as they get closer to retirement age.

More than one in eight parents - 12.7 percent - had student loans for their children's education, the study found, and those who had were on the hook for an average balances of about $21,000.

The research raises a new slate of questions about the effects of taking on debt to pay for college and how taking out loans close to retirement will affect American workers later in life. Those questions are still largely unanswered as the trend starts to take shape, said Katrina Walsemann, the USC researcher who wrote the study with Jennifer Ailshire of the University of Southern California.

But she says that whatever impacts student loans are having, they're likely to keep growing. Education debt overall has soared as more Americans go to college in a job market that increasingly demands a degree, and she says the baby boomers she studied may only be the first wave.

"They have probably taken out student loans for themselves, and now maybe after just paying off their loans, they're considering taking out loans to pay for their kids' college," Walsemann said this week. "These parents should be also saving for retirement, but if they're taking on debt at that time, then you're making decisions and trade-offs about where you're spending and saving. I thought that was an important question, and nobody's really looked at this question."

The study, published last month in the Journals of Gerentology, sheds light on the growing share of education debt belonging to older Americans. People over 50 were responsible for some $216 billion of student loans in 2015, according to the Federal Reserve Bank of New York, a number that has grown nearly sixfold since 2004.

That's still a relatively small portion of all the nation's outstanding student loans - a little under one-fifth - but it hasn't attracted as much attention. The impact on younger people, meantime, has been the focus of academics, policymakers and presidential candidates.

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Americans under 50 had more than $1 trillion of student loans in 2015, according to the New York Fed, and the rapid pace of growth has raised concerns that college dropouts with debt will be stuck in place and graduates will have a harder time launching their careers. By one estimate, graduating seniors in the class of 2016 who had loans left college with an average of $37,172 in debt - a record.

"We often don't think a lot about parents," said Jason Houle, a Dartmouth College professor who studies student loans. "A lot of this is parents leveraging themselves for their kids, so their kids can go to college - in part because they don't have a whole heck of a lot of options. I think parents implicitly know that if their kids don't get a college degree, they're not going to fare very well in the labor market.

Walsemann says she plans to start probing how their parents fare when they share the load, but she thinks the debt might keep them in the workforce longer and it might pinch their finances in retirement. One concern, she says, is that Social Security payments can be garnished to pay off student loans.

The issue of older Americans saddled with education debt was the focus of a congressional hearing in 2014 that helped to raise its profile. In testimony at the time, the Government Accountability Office said that more than 30,000 people getting Social Security checks had their payments offset because of a federal student loan.

"As the amount of student loan debt held by Americans age 65 and older increases, the prospect of default implies greater financial risk for those at or near retirement - especially for those dependent on Social Security," Charles Jeszeck, the agency's director of education, workforce and income security, said at the time. "This creates the potential for an unpleasant surprise for some, as their benefits are offset and they face the possibility of a less secure retirement."

Reach Thad Moore at 843-937-5703 or on Twitter @thadmoore.

Thad Moore is a reporter on The Post and Courier’s Watchdog and Public Service team, a native of Columbia and a graduate of the University of South Carolina. His career at the newspaper started on the business desk in 2016.