Older student loan borrowers quadrupled since 2005
According to a report by the Consumer Financial Protection Bureau (CFPB.gov) The number of consumers age 60 and older with student loan debt has quadrupled over the last decade in the United States, and the average amount they owe has also dramatically increased. In 2015, older consumers owed an estimated $66.7 billion in student loans. Although most student loan borrowers are young adults between the ages of 18 and 39, consumers age 60 and older are the fastest-growing age segment of the student loan market.
Grandparents financing grandchildren’s education
This trend is not only the result of borrowers carrying student debt later into life but also the growing number of parents and grandparents financing their children’s and grandchildren’s college education. Today, the majority of older student loan borrowers have loans that were used to finance their children’s education. They may have taken out these loans directly or cosigned on a loan with the student as the primary borrower.
This is affecting senior’s ability to retire
A 2019 AARP Public Policy Institute report found that 15 years ago, borrowers 50 and over held $47 billion of the nation’s $455.2 billion in student loan debt. By 2018, that figure had risen to $289.5 billion of an overall $1.5 trillion.
A senior’s Social Security can be garnished
Most seniors are unaware that their social security benefits can be garnished for failure to pay federal student loans up to 15 percent if the borrower defaults. Many seniors depend solely on social security to pay their basic expenses and any garnishment can be the difference between that senior living in a safe area or having to move to a dangerous, but a cheaper area.
MUSINGS FROM DIANE:
Education is supposed to be an investment in a society’s future.
For most of my life, I have paid my bills. College was expensive, but I had two part time jobs to cover the costs (no, my parents did not help). When it came to law school, I was told by the law school that a job was not an option. After my savings ran out, that meant relying on student loans. In those days the colleges were not a profit center, so their tuition was reasonable. But that is not the case today. Rather than looking at the long range benefit education offers our society, colleges everywhere see students as cash registers. Every year they raise their tuition, usually far above the average cost of living increases. While cutting their costs as much as possible (hiring less capable professors and offer fewer classes), with the goal to increase their profits. The school knows the students will take loans in order to obtain the education they believe will help provide a better life. But, the students rarely know how much that loan will cost; they only know that their family is so proud they are going to college. Many don’t complete their college education, but are still strapped with the student loans that grows more and more each day.
When are we going to return to the recognition that education is an investment in our future?