The fastest-growing age group of those carrying student loan debt might surprise you. Amid calls for the Biden administration to cancel such debt for many Americans, emerging data show it’s becoming a growing burden for those 50 and older.
According to the Federal Reserve Bank of New York, the 50+ age group now represents more than 20% of borrowers in the U.S., up from nearly 10% in the mid-2000s.
Joe Valenti, senior strategic policy advisor for AARP, said it’s become an intergenerational issue that presents different problems for older adults.
He emphasized there are several factors at play, including the exploding costs of higher education making it harder to pay off loans over time.
Older adults going back to school for a second career, or taking out loans to cover tuition for their kids or grandkids are cited as well.
Tracking data doesn’t specifically reveal how many older Iowans are affected, but more than 13% of state residents have student-loan debt.
Valenti pointed out the stress is real for older adults who are falling behind on their payments, noting for federally backed loans, borrowers risk losing a portion of their Social Security benefits through collections.
He argued it adds to the financial burden facing many Baby Boomers.
He stressed it’s important for all borrowers to know the specifics of their loans and see if they qualify for lower payments or forgiveness.
While it might not be a pleasant thought, the remaining balance for federally backed loans isn’t passed down to surviving family members after you die. That, he added, can provide some relief about leaving a financial mess for others to deal with.