Student Loans Affect Borrowers of All Ages

New Research Shows Many Older Adults Still Paying Student Loans 

The Schwartz Center for Economic Policy Analysis has released a new report that reveals a disturbing trend that will come as a shock to many: millions of Americans age 55 and older still have student loan bills. The impacts of that debt are less surprising, but have profound repercussions for those borrowers. Unfortunately, we’re all-too-familiar with this phenomenon, and have helped borrowers as old as 70 years old with hundreds of thousands of dollars in student debt. This leaves many unable to set money aside for retirement and even have to delay retirement altogether out of fear that they won’t be able to afford their payments, or—worse yet—they’ll have their Social Security garnished. 

Report Reveals Failure of the Promise of Higher Ed and Student Debt

Higher education is supposed to be a net good for society; it offers the promise of a more well-rounded and productive community. For this reason, colleges and universities are overwhelmingly designated as non-profits: they provide a public service. SCEPA’s report, unfortunately, shows that borrowers increasingly can’t afford the price tag for benefits that they can’t always even reap. Of those older adults still in repayment, the majority owe over $40k while earning less than the median annual income of $54,600. Further, about 1 in 6 people haven’t finished the degree for which they’re still paying, leaving them holding the bag for a benefit they’ll likely never receive. 

Options Remain for Older Borrowers 

If you’re among the 2+ million borrowers over 55 still in repayment, there’s still hope for you. Familiarize yourself with the SAVE plan—the newest Income-Driven Repayment (IDR) plan—which has several benefits that can help you lower your monthly payments. Also, if you’ve been in repayment for a long time, you may want to take advantage of the IDR Account Adjustment, which was just extended through June 30th. Federal loans are supposed to be forgiven after a period of repayment (maxed out at 25 years), but some borrowers have fallen through the cracks on that, especially if they have older types of loans. If you consolidate those loans into a new Direct Consolidation Loan, you may be eligible for it to be forgiven, or at least be a lot closer to forgiveness than you were before. 

If you’re one of the millions of borrowers still struggling with your student debt, give your student loan professional a call—and soon, if you want to meet the June 30th deadline for the IDR Account Adjustment. The repayment system is both complex and particular to each and every borrower, which can make it both difficult to navigate and easy to feel isolated and alone. Let us offer a helping hand!

If you have Federal Student Loans, schedule your free 15-minute Discovery Session to find out if your loans can be forgiven after 25 years.