Repaying College Debt in Your 40s?
Do you know anyone in their 40s who has kids in college – and who are still paying off their own student loans from their own college days?
Maybe it’s you. Maybe it’s a friend. Maybe it’s a brother or sister, or a neighbor. Whatever way, there’s a good chance you or someone you know has been in this position. That’s because with 44 million borrowers collectively owing $1.5 trillion in student loan debt, it’s not uncommon for someone in their 40s to be paying off their own college loan debt 20-plus years after they’ve graduated.
And the burden of student loan debt is an equal-opportunity issue. Pop stars, movie stars, politicians – Democrat and Republican alike – it’s a non-partisan reality. Even U.S. presidents have experienced paying off student loan debt in their 40s.
“We each graduated from college and law school with a mountain of debt. And even though we got good jobs, we barely finished paying it off just before I was elected to the U.S. Senate.”– Former U.S. President Barack Obama
Former President Barack Obama and his wife, Michelle, both had to take out loans to fund their education. The two didn’t pay off their debt until he was 44 and she was 41.
“So, we each graduated from college and law school with a mountain of debt. And even though we got good jobs, we barely finished paying it off just before I was elected to the U.S. Senate,” Barack Obama told an audience at the State University of New York at Buffalo in 2013.
Barack Obama isn’t the only widely known politician who has had to pay off college debt in his 40s.
According to a report from CNBC.com, when Senator Ted Cruz was on the campaign trail in 2015 at the age of 44, he spoke at Liberty University and said he “took over $100,000 in school loans, loans I suspect a lot of y’all can relate to, loans that I’ll point out I just paid off a few years ago.” In that same report, actors Jon Hamm (“Mad Men”) and Kate Walsh (“Grey’s Anatomy”) were used as examples of celebrities who have paid off their college loan debts long after leaving college.
Cecil Shorts, who most recently played with the Tampa Bay Buccaneers in the NFL, signed a $2.6 million contract in 2013, according to StudentLoanHero.com. At the time, Shorts revealed that was still paying off a large student loan debt.
“Unlike many NFL players, Shorts did not get an athletic scholarship in school. Though he worked part-time jobs while he studied physical education, he took out over $70,000 in student loans to pay for his tuition and expenses. As of 2013, he still had about $30,000 left to pay.”
The point is, anyone can experience the challenges of paying off student loan debt. Whether you go on to be a manager of a local small business or the president of the United States, dealing with student loan debt is a drain on the pocketbook.
That’s why setting up a 529 college savings plan for your child, grandchild, niece, nephew, etc., can help ensure that they don’t have the same challenges. A 529 plan is a smart way to save money for college, and it comes with one big advantage: tax advantages.
According to CollegeSavings.org, the earnings in a 529 grow free from federal and state income-tax as long as the withdrawals are used for qualified higher education expenses. Additionally, many states also exempt withdrawals from state income tax for qualified higher education expenses. *
You can learn more about 529 plans on this website. Click here to find your state’s 529 plan to learn about the many advantages of saving for your child’s future higher education.