Will Americans Still Be Paying Off on Student Loans As Seniors?
In a GAO study titled “Inability to Repay Student Loans May Affect Financial Security of Small Percentage of Retirees,” researchers reveal that a significant — and growing — proportion of “student loan” debt is owed by Americans aged 65 or older. In addition to the growth in the total amount of “senior” student loan debt, from $2.8 billion in 2005 to $18.2 billion in 2013, the GAO findings include:
- Relatively few households headed by individuals 65 or older hold student loan debt — the number is about 706,000 households in the U.S. — but the amount they owe may be significant, with estimates that the median debt owed is around $12,000, as compared to a median for those aged 64 and younger of $13,000.
- Most — about 82% — of this debt was for the individual’s own education. It is not known whether how “old” the loans are.
- Older borrowers hold defaulted federal student loans at a higher rate — and defaults can have conquences, including offsets on Social Security payments. Generally speaking, student debts cannot be discharged in bankruptcy; however adjustments may be possible to keep the individual’s monthly income above the poverty threshold.
For more discussion on the GAO report, see “Senior (Citizen) Student Debt Rising,” in Inside Higher Ed by Michael Stratford. Hat tip to Professor Laurel Terry for pointing out this new study.
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