If you’re in your 30s and feel like you’ll be paying off your student loan debt into your senior years, you may be right. Some 27 percent of those paying off their student loans are in their 60s or older. More than two-thirds of borrowers are paying off loans they took out or co-signed on for their children and grandchildren. This age group is the fastest-growing demographic of people with student loans.
Collecting on federal student loan debt from seniors can mean taking money that they counted on in retirement. When borrowers are delinquent in making payments, the government can and does take money from their Social Security payments. The number of Americans seeing their benefits cut to pay off their student loans has increased significantly over the past decade.
Private lenders are not allowed to go after Social Security payments. However, the Consumer Financial Protection Board (CFPB) says it has received reports from people that they have been threatened with this.
According to one study cited by the CFPB, almost 40 percent of people 60-plus years old with student loan debt said that they had gone without medical care and medicines to pay down this debt. The number of people over 60 with student loan debt has increased four-fold over approximately ten years.
Unfortunately, this is the age group where people are nearing or already in retirement. Many are living on a fixed income. Consumers are supposed to be allowed to have their debt recalculated if they have a significant income change. However, not all collectors are abiding by those rules, according to consumers who have contacted the CFPB.
If you are facing overwhelming debt caused, in part, by student loans, it’s important to find out what your options are. A New Jersey bankruptcy attorney can provide guidance.
Source: Chicago Tribune, “Column: The fastest-growing category of student debtors may surprise you: Senior citizens,” Gail MarksJarvis, Aug. 24, 2017