Boomer-Gen Z-ers and Student Loans?

Recently read about Boomers, Gen Z folks and student loans. Can this really be true? Are Boomers - long out of college - becoming students again, taking on student loans to fund their dreams of higher education?

Float the idea of Boomers-and-Gen Z folks having student loans by someone. There's a good chance that's how they'll interpret the statement that Boomers-and-Gen Z folks are taking on student loans.

But that's not what's happening. 

Boomers - the ones that had kids late in life - and Gen Zers have taken on and are taking on student loans to fund their kids' college and maybe grad school educations.

Here's part of what I read:

Decades after graduating college, Boomers now hold some of the highest student loan debt in the country—thanks in large part to Parents PLUS Loans, a federal program that allows parents to take on student loans on behalf of their kids.

According to our analysis, Baby Boomers have amassed $78.1 billion in direct federal student loans—a 155% increase in just six years.

The number of Boomers taking on loans, presumably for their kids, doubled from 800,000 to 1.6 million over the same period.

That’s more than $48,800 per borrower or an increase of more than $10,000 compared to 2017.

Unlike all other federal student loan programs, Parents PLUS Loans don’t have a stated borrowing limit, which means parents could be racking up even more debt to cover their kids’ education.

PLUS Loans also have much higher interest rates compared to other federal loan programs. For the 2023-24 academic year, PLUS Loans carried an interest rate of 8.05%, compared to 5.5% for direct undergraduate loans.

(Full article HERE.)

While this doesn't apply in every case, there's a problem here. I've encountered it on more than one occasion. Good parent helps child or children. Good parent builds up debt. In some cases, they combine paying a portion of said children's college out of current cash flow. And when that's not enough, they take on debt.

Paying out of cash flow means money that could be set aside for retirement doesn't get set aside. Piling debt on top of that and you've got a hill, or in some cases a mountain, to climb before getting to the peak of their prosperity: money set aside to support them after they no longer earn income (a/k/a "retirement").

See the problem?

As one who advises folks about their money, this qualifies as a complex conundrum. Part of you (the personal part) admires the sacrifice for the children. Another part (the professional part) feels obligated to point out the future challenge being created to along and happy (at least from a financial point of view) post-work phase of life.

Got it?

So what about all this hoo-hah about the stock market? Well, you don't need us to weigh in, right? You see the string of all-time highs in the face of a phantasm of a stock market floating on a bed of overvaluation.

Then again, if the financial media and the so-called "sentiment" indicators grab you, never mind.

Meanwhile, we head into Holy Week. Sunday is Palm Sunday. Ash Wednesday seems like it was just yesterday. Time flies, doesn't it?