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Student loan borrowers aren’t just the freshly graduated and mid-30s working generations — millions of Americans in their retirement years have student debt to pay back, too.
There are six times as many borrowers ages 60 and older now than there were in 2004, but their debt has increased “19-fold,” according to a report from New America, a public policy think tank. About 3.5 million Americans in this age bracket carry $125 billion in student debt, the report found.
Overall, Americans hold $1.75 trillion in student debt, the World Economic Forum found. The Supreme Court struck down the president’s student loan forgiveness plan, which was announced last August and would have alleviated $10,000 for qualifying borrowers, or $20,000 for those with Pell Grants. At the time of the announcement, the White House said 20 million borrowers would see their debt washed away, and a total of 40 million would find benefit from cancellation.
See: What you need to know about the student-loan cases before the Supreme Court as the decision looms
Student debt has been especially problematic because of “stagnant wages and soaring tuition prices,” AARP said in another report highlighting older borrowers. Around 3% of families headed by someone who was 50 or older had student debt in 1989, with an average balance of $10,000, but by 2016, that figure rose to 9.6%, with an average of $33,000, AARP said.
Despite the Supreme Court’s ruling striking down Biden’s plan, advocates for cancellation say they’re still hopeful it could happen and urged the president to use other measures to wipe away the debt.
Older borrowers have various reasons to carry debt. Some are paying off their own education, while others have taken on student debt for their loved ones. Federal PLUS loans, for example, allow parents to take loans out for their children’s education. Older Americans may have also taken on debt to refine their skills for a promotion, AARP noted in its report.
Also see: Elizabeth Warren: ‘President Biden has the legal authority to cancel student-loan debt’
Student loans can have a rippling impact on retirement savings — not just in allocating a portion of retirement income toward this debt, but also in accruing enough wealth for old age. Graduates with student loans had 50% less in retirement wealth by age 30 than the graduates without this debt, a Boston College Center for Retirement Research study found.
