JustCare

Nearly 3 million older adults shouldering student loans

Written by

Diane Archer

in

,

A new report from the Consumer Financial Protection Bureau (CFPB) reveals that nearly three million older adults are shouldering student loans and are struggling to pay them. Their financial security is at risk. In 2015, almost four in ten of them had defaulted on their loans.

Older adults are “the fastest growing segment of student loan borrowers,” according to Richard Cordray the director of the CFPB. Almost 75 percent of these older adults are assuming responsibility for paying for their children and grandchildren’s education. Only 23 percent of loans are for their own or their spouse’s debt. Either way, they live on small fixed incomes, and too often they can’t afford the monthly payments.

The CFPB found that older adults shouldering student loans are more likely to forego needed health care–not filling prescriptions or not visiting the doctor–because it is unaffordable. The average student loan debt older adults are bearing is now $23,500, almost double the student debt they bore in 2005.

The CFPB has further found that older adults are not being advised by the companies issuing federal student loans that the amount of their payments can be reassessed when their income changes. It also reports that when older adults default on their loans, they may be wrongly threatened with having their Social Security benefits taken away. These benefits are generally protected, though thousands of people are seeing a portion of their Social Security check seized.

According to Consumer Reports, as a general rule, debt collectors are not able to take your Social Security income to repay private student loans. However, the federal government can take a portion of your Social Security income to repay loans the federal government guarantees. That said, people facing a financial hardship and people with disabilities can seek a reduction in the amount that the federal government takes from their Social Security checks and sometimes can get the federal government to not take any money from their Social Security checks. You can learn more here from the Department of Education.

If you or someone you know has a student loan question concerning an older adult, you can email the CFPB office of older americans here. To understand your student loan repayment options, the CFPB has an online tool you can use offering a step-by-step guide.

Here’s more from Just Care:

Comments

One response to “Nearly 3 million older adults shouldering student loans”

  1. BC Shelby Avatar
    BC Shelby

    …this is why we need a different approach to education, which unfortunately under the new administration will be an even bigger uphill battle. It is not just tuition, but all the associated costs such as fees (in the case of large universities primarily are “athletic department fees” that fund their teams) books materials, transportation, room and board, all which add to the total cost of a college education.

    To say, just stay at home and go to a college there isn’t good enough as often, the degree a student wishes to pursue is not offered by the local institution or even one within the state resided in. This also means having to cover even higher costs due to “non resident” tuition at other state universities or extremely high rates at private ones. Unless one comes from an affluent or wealthy family, most if not all of the cost is covered by loans.

    Gone are the days when one could earn what was a “middle class” income out of high school or maybe with one year of vocational training. Today, it pretty much requires a minimum of a four year degree (and in some cases a more advanced one). The blue collar sector has gone from being the backbone of the middle class to the working poor and undermployed of today. Living costs have continued to rise while wages for non college degree holders flatlined and for the most part remain stagnant. Without better more affordable access to training other than taking on a mountain of debt themselves or through their families, there is little opportunity for many people to get out of the low wage dead end rut they are in.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

More posts