Seniors are now the fastest growing segment of student borrowers in America
American seniors 62 and older have become the fastest growing segment of student borrowers in the country, with up to 20% of the 45 million Americans who hold student debt over the age of 50. . This is according to an article published this week in the new yorker magazine.
“Between 2004 and 2018, student loan balances for borrowers over age 50 increased by 512%,” the article explains. “Perhaps because policymakers viewed student debt as the burden of upwardly mobile youth, inaction seemed a reasonable response, as if time itself would solve the problem. But, in an era of falling wages and rising debt, Americans aren’t aging with their student loans — they’re aging within them.
Generally, the use of credit in the form of student loans assumes that younger students will be able to repay this debt after graduation, having acquired a well-paying job as a direct result of a costly and multi-year education.
However, the growing prevalence of older student borrowers could serve to actively challenge such a notion, the article states.
“The erosion of union density, falling wages and skyrocketing tuition fees have all made college less of a path to high-paying jobs and more of an escape for the lowest-paying,” the statement said. ‘article. “Those who have incurred debts are increasingly unable to repay them; many have not even received a diploma.
This is especially true for borrowers of color, according to the article, who typically borrow more to attend college and tend to carry over their balances for a longer period. The trend towards older student borrowers makes these situations more common in the student borrower category in general and affects seniors who choose to return to school themselves as well as family members for whom they may choose to get loans.
“Although most older student debtors borrowed money for their own education, about a third took out loans in the name of a child or grandchild,” the article said. “Unlike direct federal loans, which have borrowing limits, parents can take on virtually infinite debt — up to the full cost of attendance each year — to fund their children’s education through a program called Parent Plus.”
If borrowers fall behind on student loans, defaults can lead the Department of Education to order the garnishment of taxes, wages and, of particular concern to seniors, security benefits social.
Read the article on the new yorker.