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Old student loans pose financial challenges for older Americans

Earlier this month we wrote a blog post regarding a student loan debt relief program that might enable some loan holders to effectively restructure their payments. That particular relief idea is generally aimed at recent college graduates who have not yet had the chance to establish themselves in their careers.

But a different kind of student loan debt problem is beginning to make its presence felt in New Jersey and across the country. Older Americans who still owe money on old student loans are feeling the pinch as they prepare to retire and face the prospect of making less income.

All told, people over the age of 50 owe over 16 percent of the total outstanding student loan debt nationwide which comes in at slightly under $1.2 trillion.

There are different reasons why someone may still owe money on a student loan even after age 50. For some people who borrowed to pay for college but did not complete their degree, they may not have earned enough money after leaving school to pay off their loans.

Others may have defaulted on student loans, only to discover that they still owe on amounts that they borrowed decades ago, even as far back as the 1970s.

Still others, perhaps as the result of a layoff or other cause of unemployment, chose to go back to college when they were older. Now as they near retirement may still owe a considerable student loan balance.

No matter the circumstances of how these people incurred the debt, the prospect of having to still make loan payments when they are on a fixed income -- like Social Security -- can be daunting.

Coping with a heavy student loan burden going into retirement may be hard, but getting rid of the loan by means other than repayment may be even more difficult. As indicated in our earlier post this month, not everyone can benefit from President Obama’s new loan payment options, and sometimes even bankruptcy cannot erase a student loan.

For people confronting old student loans that they do not want to haunt them into retirement, getting professional advice and legal debt relief assistance could be beneficial. Resolving debt issues can help people move forward and work toward a future of financial stability.

Source: South Bend Tribune, "Student loans plague many over 50," Patricia Alex, July 9, 2014

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