“student Loans And Older Adults: Addressing The Unique Challenges” – A new government report finds that older Americans are increasingly burdened by federal student loans — and they’re struggling to repay their debt at much higher rates than their younger counterparts.
WASHINGTON — The number of Americans nearing or past retirement age who still have student loan debt has risen in recent years, as has the amount of money the government takes from Social Security checks to pay back defaulted federal loans, congressional investigators have found. make a. saw
“student Loans And Older Adults: Addressing The Unique Challenges”
More than 700,000 households headed by Americans age 65 or older now carry student loans, according to a report released Wednesday by the U.S. Government Accountability Office. And the amount owed by borrowers 65 and older rose from $2.8 billion in 2005 to $18.2 billion last year.
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While the outstanding student loan debt of older Americans makes up a small fraction of the more than $1 trillion in outstanding federal debt, they become indebted and struggle to repay their loans at much higher rates than their younger counterparts.
For example, between 2004 and 2010, the number of families with 65 to 74 people with student loan debt more than quadrupled, from 1 percent to 4 percent of all such families. During the same period, the rate of borrowing among Americans under 44 increased between 40 and 80 percent, although borrowing among that age group is higher than among senior citizens.
Obesity rates are also high among older Americans. More than a quarter of federal student loans are taken out by people aged 65 to 74, compared to just 12 percent of loans taken out by borrowers aged 25 to 49, the GAO found. The delinquency rate is even higher among the oldest borrowers, those over 75, with over 50 percent of their loans in default.
While some of the debt reflects loans made by parents on behalf of their children, the vast majority — 70 to 80 percent of outstanding debt — is related to borrowers’ education. Parent PLUS loans account for only 27 percent of student loans taken out by borrowers age 50 to 64, and a smaller portion for borrowers over 65.
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Issues facing older student loan borrowers were the subject of a hearing Wednesday by the Senate Special Committee on Aging, where several lawmakers said the issue is under the radar but needs to be addressed.
Senator Bill Nelson, the Florida Democrat who chairs the panel, said the issue was an “unusual issue” but one that needed attention.
“While many people may think of student loan debt as the only thing for a teenager, that’s often not the case,” he said.
It is not clear whether the student loan debt that is increasingly weighing down American adults is mostly due to decades of traditional old student loans that have never been repaid or newer loans to finance adult education, for example. The Education Department was unable to provide GAO investigators with the borrower-level details needed to make such a distinction, the agency said.
Borrowers Over 50 With Student Loan Debt
The number of borrowers, especially older borrowers, who have their Social Security benefits confiscated by the government because they defaulted on their student loans is also increasing.
Between 2012 and 2013, Social Security garnishments for unsecured student loan debt increased fivefold for all ages. During the same period, the number of borrowers age 65 and older who saw their monthly social security checks reduced increased by 500 percent, from 6,000 to 36,000 borrowers.
The GAO report also notes that when Congress in 1998 limited the amount of a person’s monthly Social Security benefit that could be reduced to repay defaulted student loan debt, that limit did not keep pace with inflation. As a result, the report says, older student loan borrowers can now get by with Social Security payments as low as $750 per month, which is below the federal poverty line.
Sen. Susan Collins of Maine, the top Republican on the Senate Aging Committee, said at a hearing Wednesday that she will soon introduce legislation to adjust that level for inflation over the past 15 years and to increase it to the inflation that has gone forward. going to check.
Student Loan Debt By Age Statistics
Critics of the federal government’s power to garnish Social Security benefits point out that the majority of Social Security recipients who are still trying to pay off student loans are likely to find themselves under such financial stress that their fixed incomes are unfairly disrupted. it’s heavy
Sandy Baum, a higher education economist at the Urban Institute, argued in a new blog post Wednesday that “the practice does more harm than good.”
“Withholding Social Security payments to collect on student loans really isn’t worth it,” Baum said. “It doesn’t do much damage to the residual debt, but it can create serious problems for those affected.”
S newsletters, featuring the latest news, insights and great new careers in higher education – delivered to your inbox. Written by Hanneh Bareham Written by Hanneh BarehamArrow Real Author, Personal Loans and Debt Help Hanneh Bareham is a personal finance author since 2020. She started as a credit card reporter before transitioning to the role of student loan reporter. He is now a writer in the lending team, expanding his scope to many types of consumer lending. Connect with Hanneh Bareham on Twitter Connect with Hanneh Bareham on LinkedIn Linkedin Connect with Hanneh Bareham by Email Hanneh Bareham
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Edited by Chelsea Wing Edited by Chelsea WingArrow Right Form Editor, Student Loans It is an investment to help students through the high costs of college and break the complications of student loans. Connect with Chelsea Wing on LinkedIn Linkedin Chelsea Wing
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Why More Older Adults Are Taking On Student Loan Debt
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