If asked to guess what age demographic is piling on the most student debt in the U.S., you'll probably be wrong. It's middle-aged borrowers, those between 35 and 49, that are taking on student debt faster than any other age group.
Reuters reports a new analysis by CreditKarma that tracks credit scores. It found the age group's student debt burden increased "by a staggering" 47%.
"The average student loan debt for those aged 38 to 41 was the biggest of that group -- about $12,000, up from just under $9,000 in 2009. Young people still carry the biggest student loan burdens; those aged 26 to 29 have an average of $14,000 in student debt. But the increased levels in middle-aged student debt is a new phenomenon."
Outstanding student loan are estimated around $966 billion, which is more than the total credit card debt in the U.S.
Credit Karma CEO Kenneth Lin tells Reuters more and more people are going back to school for mid-career training.
Lin says "high unemployment, rising tuition costs, artificially low interest rates from the government, and increased for-profit school advertising ... (adds up to) consumers taking on student loan debt at an alarming pace."
Business section: Investing ideas
Without the means to pay debts off, an increasing number of Americans are defaulting on their student loans. That's bad news for schools mostly populated by students that use federal student loans to pay the tuition fees.
For that reason, we wanted to find list U.S. education stocks whose performance could be affected by the trend.
Here are the 10 largest, sorted by market cap. (Click here to access free, interactive tools to analyze these ideas.)
1. Apollo Group
2. Education Management
3. The Washington Post Company
5. ITT Educational Services
6. Bridgepoint Education
7. Strayer Education
8. Grand Canyon Education
10. Career Education
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Rebecca Lipman does not own any of the shares mentioned above. Data sourced from Finviz