American senior citizens are holding a growing amount of student loan debt, according to the Wall Street Journal. This is an important trend for a lot of reasons, so I’ll use this post to share some of the article’s highlights.
To begin with, it’s important to remember the full range of debt holding ages. All too often the discourse around higher ed presumes students to be teenagers and grads in their early 20s. The reality is that a large portion of current and former students are adults, ranging up through senior citizens. Moreover, older family members sometimes guarantee loans for others.
AnnaMaria Andriotis offers some very useful data. Not many seniors owe student loan debt, but for those who do, amounts are similar to those owed by younger people: “On average, student loan borrowers in their 60s owed $33,800 in 2017.”
As I said earlier, this is an increase. Andriotis reports that that amount is “up 44% from 2010, according to data compiled for The Wall Street Journal by credit-reporting firm TransUnion.” That’s true of the total amount over time –
– as well as by the average debt:
Total student loan debt rose 161% for people aged 60 and older from 2010 to 2017—the biggest increase for any age group, according to the latest data available from TransUnion.
Among that population is a small group having their Social Security payments hit:
The federal government… garnished the Social Security benefits, tax refunds or other federal payments of more than 40,000 people aged 65 and older in fiscal year 2015 because they defaulted on student or parent loan debt. That’s up 362% from a decade prior, according to the latest data from the Government Accountability Office.
One reason for this recent increase is how the federal government shapes loans by age. It
caps the dollar amount of loans that undergraduate students can borrow for college, but no caps exist for the aggregate amount that parents can take on. That has contributed to parents increasingly borrowing to cover the gap between tuition costs and the amount of free aid and loans their children receive.
Andriotis notes that seniors sometimes address this debt by either going into more debt (by credit cards) or working many years into what was supposed to be their retirement.
What does this trend suggest about higher education’s future?
It’s possible that this will elicit changes in federal policies or the passage of new laws aimed at helping seniors cope. Alternatively, or in addition, we might see companies and nonprofits emerge to assist. The article mentions New York’s Mobilization for Justice as one of the latter. The demographics of an aging society suggest that problems afflicting a large and growing senior population may well find traction from such actors.
Alternatively, responses might be futile. The entire amount of senior debt ($86 billion, as of 2017) is less than one half of one percent of the staggering total debt number (around $1.5 trillion). Moreover, as many older folks can testify, it’s very easy for companies and politicians to downplay their concerns.
At the same time, it seems likely that senior student debt will continue to build up. Our national strategy of financializing higher education has not been undone, after all, and our culture continues to insist that Americans need more post-secondary education. Unless those change in some radical way we should expect more retirees to work, go further into debt, and endure emotional stress as they increasingly shoulder growing piles of student loans.
(thanks to Fritz Vandover for Twitter conversation)