Student loan debt continues to be a financial burden for more than just millennials. It seems that this problem is becoming a huge and growing problem for many aging Americans who are near or in retirement.
According to the NY Fed, student loan balances among borrowers over 50 made up 17 percent or about $204 billion of the nearly $1.2 trillion in outstanding student loan debt in the U.S. last year, .
Student loan balances have grown substantially for borrowers of all ages. Researchers say the fastest growth in total balances are held by borrowers age 60 or older, which have increased nearly nine-fold since 2004.
Student loan debt owed by older Americans includes those who borrowed or co-signed to help a child or grandchild as well as student loans for the borrower’s own education.
There have been a number of people in their 40’s, 50’s and even 60’s who were having difficulty finding jobs during and after the “Great Recession”. Many chose to return to college to finish their degree or obtain a new degree by financing their own education.
Surprisingly, older borrowers are more likely than younger debtors to have defaulted on loans. Many incorrectly believe their balances can be discharged in bankruptcy. Student loans are cancelled only when a borrower dies.
Part of your retirement planning needs to include the plan to retire your student loans, regardless of the source of the debt.