Senior citizens hold more student debt: a Wall Street Journal report

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 –

student debt by seniors 2010-2017

– as well as by the average debt:

student debt average -seniors-2010-2016

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)

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3 Responses to Senior citizens hold more student debt: a Wall Street Journal report

  1. Mark Corbett Wilson says:

    I became part of “the biggest increase for any age group” by returning to HE at the suggestion of President Obama in his first State of the Union Address:
    “…in this economy, a high school diploma no longer guarantees a good job. I urge the Senate to follow the House and pass a bill that will revitalize our community colleges, which are a career pathway to the children of so many working families. To make college more affordable, this bill will finally end the unwarranted taxpayer-subsidies that go to banks for student loans. Instead, let’s take that money and give families a $10,000 tax credit for four years of college and increase Pell Grants. And let’s tell another one million students that when they graduate, they will be required to pay only ten percent of their income on student loans, and all of their debt will be forgiven after twenty years – and forgiven after ten years if they choose a career in public service. Because in the United States of America, no one should go broke because they chose to go to college. And it’s time for colleges and universities to get serious about cutting their own costs – because they too have a responsibility to help solve this problem.”

    Instead, returning to a California Community College to update my skills ruined my life. It took two years to get the pre-approved Federal financial aid I qualified for and cost me everything I owned when my stuff was sold for storage fees. Eventually, after finally receiving my financial aid, I was able to take out students loans. Now I have two associates degrees, $20,000 in debt and the choice to go further in debt to achieve a useful degree or move to the third world where my social security check will pay my living expenses. It barely covers my rent in the San Francisco Bay Area.

  2. Stann Coat says:

    We’re also seeing quite a few people in older demographics come through looking for help with their student debt and personal finances. This is a serious issue.
    Thanks for the great post Bryan. Going to repost this!

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