Smart Borrower Blog

Number of Senior Citizens with Student Debt Quadrupled in Last 10 Years


Jan 18th, 2017 @ 9:38 PM by Amber Nelson


The past decade has conjured up a Mortgage Meltdown, a colossal Financial Crisis and the Great Recession. As a result more and more Americans in their golden years have taken on student loan debt for their children or grandchildren.

According to a report from the Consumer Financial Protection Bureau, the number of people aged 60 and older with student loan debts has quadrupled in the last 10 years. Back in 2005, there were 700,000 Americans aged 60-plus carrying student loans. As of 2015, that number had grown to 2.8 million.

Of course there are some who are still repaying loans for their own education, but the vast majority – 73 percent – have racked up that student loan debt on behalf of a child or grandchild.

This increase in student debt burdens among the retirement crowd can have serious consequences on personal finances and the economy as a whole. The average amount of debt a 60-plus borrower now carries is more than $23,000, almost double the average of $12,000 in 2005. With many retirees living entirely off their Social Security checks, those debts have started to overwhelm borrowers and defaults have started to rise. Among those aged 65 or older, 37 percent were in default on their loans in 2015, compared with just 17 percent of those under age 50.

The CFPB report found these senior student loan borrowers were also sacrifice their own basic health care needs in order to continue making their payments. And for those in default, their Social Security payments can be garnished, making life even more challenging.

In order to help the situation of many older Americans, the CFPB recommends that lenders and student financial aid offices offer counseling about the risks of taking on students loan for someone else. It also calls for an overhaul of loans that are in default among the older generation in order to consolidate or refinance those loans into more manageable payments.

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

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