Your Finance: Student debt in the golden years

In the debate over growing student debt, there has always been one mitigating factor: Borrowers tend to be fairly young, and there is plenty of time to pay off what they owe.

So what about those who are not so young? This is a mounting concern. Those 60 and older now owe $43 billion in student loan debt, according to data from the Federal Reserve Bank of New York, a record for that age group.

Also at all-time highs are their average debt loads -- $19,521 -- and the total number of 60-plus borrowers, at 2.2 million.

Some of them took on this debt to pursue their own studies, perhaps after being laid off during the Great Recession and being unable to find new work; others, to help their kids pay for school.

Either way, older Americans are accumulating student debt just as the window of their working lives begins to shut. Back in 2001, almost no households headed by seniors had outstanding student loans -- it rounded down to zero percent. "Now it is up to 3 percent, basically tripling over the course of the decade. It is worrisome," said Richard Fry, a senior economist at the Pew Research Center in Washington.

What else has been growing? The amount those borrowers owe. Pew's research discovered that in 2001, 65-plus households with student debt were grappling with median bills of $2,200. By 2010, that multiplied fivefold, to $12,400.

How can older Americans deal with this awkward new reality of owing student debt well into their golden years? Here's what financial planners advise.

Independence: If you want to help your children or grandchildren with college bills, that is a noble goal. But that doesn't mean you have to take out loans yourself.

"Let the kids take out the debt," said Jim Holtzman, a planner with Legend Financial Advisors in Pittsburgh. "You can then help them pay down their loans, if you like, through annual gifts. That way you are helping them, but still retain flexibility regarding your own retirement plan."

Homework: If you decide to do the borrowing, there are critical distinctions to consider between types of student loans. First, know that a federal PLUS loan is yours to repay, not the child's, said Fred Amrein, principal of Amrein Financial in Wynnewood, Pa. Similarly, if you cosign for a child's private loan, you are on the hook if he or she defaults.

A macabre corollary: You may want to consider taking out life insurance on your child. That way, if he or she passes away you won't drown in debt as a result.

Ace in the hole: Many older Americans have one when it comes to their estates: the family home. Should you draw on that home equity to help erase student debts? Compare the fixed rate of PLUS loans, currently at 7.9 percent, with a $30,000 home equity line of credit -- currently averaging 5 percent, according to Bankrate.com -- and it can look like an attractive swap. Indeed, the spread compared to private loans can be even wider. But heed the dangers of drawing down home equity, too, which can leave you in a precarious position should values fall.