Student loan debt can follow you all the way to retirement. In fact, the age group with the fastest growing balances on student debt is borrowers over 60.
Although historically, the majority of student debt has been held by younger borrowers, balances held by all age groups have increased in recent years and there is a small but growing population of seniors who are struggling to pay back student loans.
Over the past decade, balances held by borrowers over the age of 60 increased 850 percent according to a report by the Federal Reserve Bank of New York. This change was largely due to the fact that the share of borrowers over 40 grew at nearly double the pace of younger borrowers during this time.
Recent college graduates at least have years of income to look forward to when paying off their student loans, whereas older debtors are more likely to default.
Some retired seniors have had to take cuts from their Social Security checks to pay back their loans.
Unlike other debt, student loans generally cannot be discharged in bankruptcy. Federal tax refunds and up to 15 percent of wages and Social Security can be garnished in order to pay off the loans, which can end up leaving some retirees below the poverty threshold.
From 2002 through 2013, the number of seniors (age 65 and up) whose Social Security checks were garnished rose from about 6,000 to 36,000 people, according to the GAO.
There is a portion of seniors who have taken on student debt on behalf of their children or grandchildren, however the majority of seniors took out loans for their own education.
According to the GAO data, about 18 percent of federal educational debt held by seniors is from Parent PLUS loans and the remaining 82 percent of borrowers took out loans for their own education.
Joanna Darcus, a consumer rights attorney who works with low-income borrowers says many of her clients tried to use education as a solution to unemployment or stagnant wages.
“Among many of my clients, education is viewed as a pathway out of poverty and toward financial stability, but their reality is much different from that,” Darcus told TIME. “Sometimes it’s their debt that keeps them in poverty, or pushes them deeper into it.”
