The number of older Americans carrying some type of student debt has nearly quadrupled over the last decade from 700,000 to 2.8 million, according to a study published by the CFPB. Consumers age 60 or older now make up the fastest growing age segment of the student loan market, the CFPB said, owing an estimated $66.7 billion as of 2015.
The majority of older borrowers – roughly 75% – said they have taken on debt to help pay for a child or grandchild’s education, either directly or as co-signers for a younger borrower, and the survey noted that many are struggling to make their monthly payments. Among borrowers age 50 to 64, 29% were in default, and among borrowers 65 or older, 40% could not make their monthly payments. Student debt obligations also affected older borrowers’ ability to save for retirement, the CFPB found. A comparison of borrowers approaching retirement (those age 50-59) showed that those with student debt had less saved in a retirement fund than those without.
The survey identified several obstacles older borrowers face with respect to student loan servicing, including trouble enrolling in income-driven payment plans, the incorrect application of payments made by co-signers and an inability for co-signers to access loan information. In addition, some older borrowers reported accounting errors that led to servicers threatening to garnish federal benefits, such as Social Security.
Read the report.