Report: Older Americans with Student Debt Fastest-Growing Demographic — Could Be Paying in Their 90s

Focused senior husband and wife sit at table at home look at laptop screen pay bills taxes
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Older Americans represent the fastest-growing demographic for student loan debt either from their own debt or that incurred on behalf of their children, data from the U.S. Department of Education shows.

Most of the discussion about student loans centers on recent college grads and debtors in their late 20s and into their early 30s, but Betsy Mayotte, president of the Institute of Student Loan Advisors, said that about 20 percent of those who still owe student loans are 50 and older, “and the fastest growing population of U.S. citizens carrying student loan debt are the over-65s.”

Marketplace reported on the surprising data:

One reason is that more people are going to college and graduate school, said Anqi Chen, an economist at the Center for Retirement Research at Boston College. “And then there’s also been an increase in parents taking on either co-signing or getting a parent PLUS loan for their kids,” Chen said.

People over 50 who are still carrying student debt also tend to struggle more than younger borrowers to pay it back, Mayotte said.

“We talk a lot about how, you know, it delays buying homes, it delays some people from getting married or having children,” but, Mayotte said, for older people who are still paying student loans, it can make it a lot harder to save for retirement — or to retire at all.

Financial Advisor magazine also reported on this new angle on the $1.7 trillion student loan debt in the United States:

There are now about 8.7 million Americans aged over 50 who are still paying off college loans, and their debt has increased by about half since 2017.

Some took out loans to help their children, and could be well into their 90s before they’re done repaying. Others went back to school later in life. In both cases, borrowers got saddled with hefty interest rates that inflated their balance.

That’s why the looming resumption of payments on student loans is a challenge that spans the generations. A pandemic moratorium is due to run out at the end of September, with no progress so far on the debt forgiveness that President Joe Biden promised during his election campaign.

“The interest accrued big-time,” Alma Topete, who is 60 and borrowed about $30,000. She owes $70,000 today, according to the Financial Advisor report.

“I never expected to have a loan at this age,” Topete said.

Frank Sizer Jr., 77, said he figures it will take two more decades to settle his debt. Sizer borrowed money to help his son study biology at Bridgewater College in Virginia. He retired in 2010, two years after his son graduated, and now owes about $52,000.

“God knows what the original amount was,” said Sizer, who has a $500 a month payment. “It just continued to grow.” 

“Since mid-2006, federally backed loans under the Parent PLUS program have charged an average of 466 basis points above U.S. Treasury bonds, well above the typical rate for student borrowers,” Financial Advisor reported. “And loans to parents come with a hefty one-time origination fee too. The current going rate is 4.23 percent of the total amount borrowed—about four times what students are typically charged.”

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