Retirees burdened by student loans

retirees and student loan debt

When you think of student loan debt, do you think of retirees? It may come as a surprise, but the number of people age 60 and older with student loan debt quadrupled—to more than 2.8 million—in the past decade. The average amount borrowed doubled during that time and now hovers around $23,000.

The vast majority (about 73%) say the loan was taken out for their children’s or grandchildren’s education. Many private loans require a cosigner, and more than half of those cosigners are over age 55. Other people are still paying off loans they took for themselves, often decades old.

Unfortunately, many of these older borrowers are retired and struggling to make payments. In many cases, student loan debt can’t be discharged in bankruptcy.

A report by the Consumer Financial Protection Bureau on people over age 60 with student loan debt found:

  • An increased rate of late and missed payments and a high rate of default among borrowers age 65 and older.
  • A higher likelihood they will forgo basic health care needs.
  • A growing number of people losing part of their Social Security benefits due to unpaid federal student loans. Social Security benefits are generally protected from collection for defaulted private student loans, but not federal loans.

Options for relief

Federal student loans offer more options to lighten the load.

Check into income-driven repayment plans. These plans cap payments at a percentage of income and can help people from falling into or getting out of default.

Apply for a disability waiver. Seniors with a total and permanent disability discharge may qualify to have their loans canceled. One caveat: The amount forgiven is considered income and you will owe taxes.


Before cosigning for student loans, make sure you understand what you may be responsible for.


Apply for a financial hardship. It is up to the Department of Education to decide if they will grant it. Call to request a suspension then follow up with the necessary documentation for them to review.

Consolidate your loan. Converting your defaulted federal loan into a federal consolidation loan gives you the option to implement an income-based repayment plan. This could make the payments more manageable.

Rehab your loan. Work out a payment plan with the Department of Education. This doesn’t erase your debt but could decrease your monthly payment.

While these options don’t apply to private loans, some private lenders may work with you to adjust payments. The National Consumer Law Center’s Student Loan Borrower Assistance Project and Justice in Aging provide advice and resources for people struggling with payments.

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