Graduates Over The Age Of 50 Are Still Paying Off Student Loans
This is pretty sobering news: Many Americans entering their 50s are still paying off student loans. According to the New York Federal Reserve Bank, more than 16 percent of the nearly $1.2 trillion in outstanding student loan debt in the nation is held by people over 50, reports The Network Journal.
“It’s one of the largest economic issues of our time, and it’s not just a young person’s issue,” said Natalia Abrams of the advocacy group StudentDebtCrisis.org.
Although many of the borrowers took out loans later in life, some co-signed or took out loans for children and grandchildren.
The reason for such high debt, according to experts, is the escalating costs of college along with an economy that is at a standstill. “This problem is getting worse and is going to continue to get worse. We’re going to see a higher population of people using Social Security to pay off loans,” says Betsy Mayotte, director of regulatory compliance for American Student Assistance, which administers federal education loans.
According to Mayotte, there has been an increase in borrowers taking out federal Parent Plus loans for their children’s education since the recession when there was a drop in housing prices and home equity loans and lines of credit were decreased.
There has been some relief through the Obama administration’s new repayment options, which offer easier terms to some borrowers. But even despite this defaults have still risen. Some seven million borrowers are in default with a total of more than $100 billion still due, said Rohit Chopra of the federal government’s Consumer Finance Protection Bureau.
“This is not a rare situation; unfortunately it’s all too common,” Chopra said. “And the consequences are severe.” Those who default can see their wages garnished among other things.