Student loans are often thought to be an issue for younger people, but data suggests that they are increasingly becoming an issue for senior citizens.
In recent decades, the costs of getting a college education have skyrocketed at a rate that far surpasses the general rate of inflation. This has caused more and more students to take out student loans.
After graduation these students start their careers with large debts that sometimes are in the six figures, especially if they received post-graduate degrees. This issue has started to attract the attention of many politicians who have tried to figure out how to make college more affordable and how to make it easier for people to pay off their student loans.
Many people assume that these politicians are merely paying attention in order to attract younger generations to vote for them. However, data compiled by the Consumer Financial Protection Bureau suggests that student loan debt is also an elder law issue, according to Financial Advisor in “Student Loan Debts Plague Older Americans.”
In 2015, 2.8 million people age 60 or over had student loan debts. The majority of them took out the loans for children or grandchildren, but 27% had student loan debts from their own educations.
A total of 37% of people with student loan debt over the age of 65 were in default, which means that their Social Security payments can be reduced, their tax refunds can be taken and their wages can be garnished.
This is a particular problem for people on Social Security since the program is designed to eliminate elder poverty.
If the payments are reduced to pay back the government for student loans, then the poverty reduction benefits of the program are also reduced.
Reference: Financial Advisor (Jan. 16, 2017) “Student Loan Debts Plague Older Americans.”
