The amount of student loan debt held by senior citizens has increased by over 500% over the last decade. Perhaps surprisingly, only about 20% of that debt was accumulated by their children.
Nearly $20B is owed by seniors in about 750,000 households. I.E., the average debt load is north of $20k per indebted household. Expanding the definition of mature student loan debtors to those over 50 increases their share of total debt to over 15%.
That is, admittedly, a small percentage of total student loan debt, but seniors’ share of total debt is growing and, alarmingly, people over 75 have very high rates of default.
It’s hard to tease the average length of these loans out of the available stats. A lot of this debt was accumulated by baby boomers who borrowed money for college way back in the ‘70s and haven’t paid it back. The problem is, if seniors retire before they retire their federal student loan debts, The Man can garnish up to 15% of Social Security payments!
Many seniors’ student loans were taken out more recently, by people who were middle aged when they were laid off ten or fifteen years ago. They followed accepted wisdom and retrained. The problem is that people returning to school in the early 2000s accumulated far larger debts than they did the first time around—because tuition and other educational costs have dramatically outpaced inflation since their first rodeo.
Statistically speaking, seniors are obviously less likely than millennials to be hobbled by student loan debt, but if trends continue, there will soon be 1,000,000 million senior households in just that situation.
That’s just another illustration of this truth: Whenever you think, “That’s a young person’s problem,” or “That only applies to young people,” or “Only kids are concerned with…” you’re almost certainly wrong. That thing—whatever it is—is almost certainly relevant to quite a few seniors, too.