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 today by the Consumer Financial Protection Bureau. 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 percent — 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 percent were in default, and among borrowers 65 or older, 40 percent 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.