Should Students and Parents Who are Close to Retirement Borrow to Pay for College?

I am 47 and recently divorced single parent of two children, ages 7 and 8. I spent the last 9 years as a stay-at-home parent. As a result of the divorce, I am re-entering the job market. My last position, as a training and development specialist for a bank, earned roughly $45,000. It has been somewhat difficult obtaining full-time employment and I really don’t want to return to what I was doing prior to going on maternity leave. I have been trying to figure out what career I can go into that will pay enough to support myself and the kids. Currently, I am looking into getting a second Bachelor’s degree in nursing. After I complete my pre-nursing classes, the program is 16 months. Once you are in clinicals, the school strongly suggests you don’t work. The cost of the program is around $45,000, not including the cost of the six pre-nursing classes I need to take just to get accepted into the program. In addition, I will need money to support my living expenses. My child support is $85 a week. I have no savings or assets and filed for bankruptcy (chapter 7) as a result of the divorce settlement. I have both Bachelor’s and Masters degrees, but nursing is one area that I think I would enjoy pursuing that would meet my financial needs of $60K or $70K in income. I am torn between the amount of debt I will be in after I finish the program and the income I will need as a single parent supporting two children. Any feedback, insight or comments would be very helpful. — Diane L.

Annual income for an RN (registered nurse) is about $60,000 to $75,000 a year. To become an RN, students must pass a licensing exam after earning an Associate’s degree or Bachelor’s degree in nursing. Nurses continue to be in demand, even during the recent economic downturn. Some employers provide loan forgiveness programs for nurses to help attract talent.

But an older student must borrow for more than just the cost of the program. Older students must also borrow to support their families while they are studying full-time. (Students who work full time and study part-time are less likely to graduate and take longer to finish.) Students who graduate when they 50 years old or older have at most 15 years of employment before they reach the traditional retirement age of 65. This contrasts with the 40 years of employment for a student who graduates with a Bachelor’s degree in nursing in her 20s. In addition, repaying student loans may make it more difficult for an older borrower to save for retirement and for her children’s college education.

As noted in previous Ask Kantro columns, there is very little financial aid for a second Bachelor’s degree, other than loans and education tax benefits like the Hope Scholarship and Lifetime Learning tax credits. The high cost of an undergraduate nursing program will exceed the annual limits on federal student loans, forcing the student to borrow from a private student loan program. But a student who has a recent bankruptcy discharge and no creditworthy cosigners is unlikely to qualify for private student loans.

If a student’s total education debt (including debt from prior education) is less than the annual expected starting salary, the student should be able to afford to repay the debt in about 10 years. Older students (and parents of college-age children) should not borrow more than they can afford to repay in 10 years.

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