Over the last 20 years, the number of adults aged 60 or older with student loan debt has grown sixfold, and the amount of debt they carry has multiplied nearly 20 times, according to a new fact sheet from the National Consumer Law Center (NCLC) and the New America Foundation. It adds to a growing body of research that shows that while most of the attention paid to the student loan debt crisis is centered on Generation Z and millennials, a substantial number of older adults are also struggling to pay back student loans and establish financial security.
“This debt is now threatening millions of people’s ability to meet their basic needs in old age,” Abby Shafroth, co-director of advocacy at the NCLC, said in a news release.
The report notes that while some older borrowers took on debt to help family members attend college, most are still paying off their own degrees. For those who are struggling to pay off loans they took out for others, the report cites high-interest Parent PLUS loans as the culprit.
“The government offered Parent PLUS loans to parents regardless of whether they could afford it,” Tia Caldwell, senior policy analyst at New America, said in the release. “Once they become eligible for Social Security benefits, the government can seize a portion of the benefits above a meager $750 per month, pushing many into poverty as they reach retirement age.”
In response, policy groups recommend that lawmakers replace Parent PLUS with grants for low-income families, make a default cap for collections in an income-driven repayment plan, protect Social Security checks and tax refunds from garnishment, screen borrowers for loan forgiveness eligibility, and provide targeted loan forgiveness for older borrowers.
“The federal government shouldn’t be pushing 60- and 70-year-olds into poverty because they tried to get an education decades ago,” Shafroth said.
