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The Parent Trap: Tuition Debt

Student debt snares parents, putting retirement at risk

Terry Williams borrowed about $7,000 to earn a degree from Spelman College 38 years ago. For her youngest child, a sophomore at Belmont University in Nashville, she will take on almost $40,000 in parental loans. Williams, a 59-year-old widow who runs a nonprofit that helps black families navigate private-school admissions, is watching her retirement savings dwindle as she pays college bills for her three children. “I’ll probably work until I fall dead at my keyboard,” says the Decatur (Ga.) resident.

It’s not just graduates who are staggering under the weight of their educational loans. Parents, too, are borrowing record amounts to put their kids through college, jeopardizing their retirements. With the housing crisis, many families can no longer avail themselves of one popular option for financing university studies: taking out a second mortgage. “A plunge in home prices has erased the equity that many homeowners had just a few years ago,” says Greg McBride, a senior financial analyst at