The New Face of Student Loan Borrowers: The Elderly
Student loan debt isn’t only impacting young borrowers. Their older counterparts are also dealing with student debt at a rate that has quadrupled during the last decade.
The Consumer Financial Protection Bureau released a new report that showcased just how bad it is for older people, many of whom graduated years ago. The CFPB found that among consumers 60 and older student loan debt has quadrupled over the least ten years, with the amount they owe increasing at a dramatic rate. The CFPB estimates older consumers owed an eye opening $66.7 billion in student loans in 2015 alone, becoming the fastest growing segment of the student loan market. Back in 2005 older student loan borrowers stood at around 700,000. That has jumped to 2.8 million as of 2015.
They are also borrowing more which is a result of the ever rising costs of a college education. In 2005, the CFPB found that people 60 and older owed around $12,100 and in 2015 that jumped to $23,500. They still pale in comparison to people between the ages of 18 and 39, which make up the lion’s share of student loan borrowers as well as $1.3 trillion in student loan debt.
“This trend is not only the result of borrowers carrying student debt later into life, but also the growing number of parents and grandparents financing their children’s and grandchildren’s college education,” wrote the CFPB in a report highlighting this new problem. “Today, the majority of older student loan borrowers have loans that were used to finance their children’s education. They may have taken out these loans directly or cosigned on a loan with the student as the primary borrower.”
Having student loan debt in and of itself isn’t a bad thing, but just like their younger counterparts, older consumers are struggling to pay back their loans. The CFPB found close to 40% of federal student loan borrowers 65 and older are in default on their loans, with a growing number of them having their Social Security benefits offset due to the unpaid student debt. The government has the right to offset some of the government benefits, including Social Security, if federal student loans aren’t paid back. This facet presents a huge problem for the nation’s elderly since many rely on Social Security for their basic necessities.
The CFPB also shows older consumers with outstanding student loans are more likely to skip necessary health care expenditures such as prescription drugs, trips to the doctor, and dental care. Additionally, the CFPB noted 39% of consumers 60 or older with student loan debt skipped health care. That compares to 25% of older consumers who don’t have student loans to pay back.