60 Years Old, and Still Paying off Student Loans

The extent of the student loan crisis is becoming all the more evident. New research from the Federal Reserve Bank of New York reports that $36 billion in student debt belongs to Americans who are 60 or older. The debt to this demographic comes as a result of unpaid loans from their original days in college, loans for mid-career education, and co-signing loans for younger family members, the research shows.

The plight of unpaid student loans has become a cause for increasing concern in recent years. Tuition continues to drastically outpace inflation, the job market for recent college graduates remains murky, and wages for are stagnant.

Another problem for borrowers is that as of 2005, when the Bankruptcy Abuse Prevention and Consumer Protection Act was passed, private student debt cannot be discharged in bankruptcy court. This lack of this consumer protection makes student debt nearly impossible to erase. "A student loan can be a debt that's kind of like a ball and chain that you can drag to the grave," said William E. Brewer, president of the National Association of Consumer Bankruptcy Attorneys, in an interview with the Washington Post. "You can unhook it when they lay you in the coffin."

Sen. Dick Durbin (D-Illinois), has introduced legislation that would reinstate bankruptcy protection for students. Other groups, such as Occupy Student Debt, are fighting for a variety of protections for student borrowers.

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Washington Post: Senior citizens continue to bear burden of student loans

The burden of paying for college is wreaking havoc on the finances of an unexpected demographic: senior citizens.

New research from the Federal Reserve Bank of New York shows that Americans 60 and older still owe about $36 billion in student loans, providing a rare window into the dynamics of student debt. More than 10 percent of those loans are delinquent. As a result, consumer advocates say, it is not uncommon for Social Security checks to be garnished or for debt collectors to harass borrowers in their 80s over student loans that are decades old.

That even seniors remain saddled with student loans highlights what a growing chorus of lawmakers, economists and financial experts say has become a central conflict in the nation's higher education system: The long-touted benefits of a college degree are being diluted by rising tuition rates and the longevity of debt.

Some of these older Americans are still grappling with their first wave of student loans, while others took on new debt when they returned to school later in life in hopes of becoming more competitive in the labor force. Many have co-signed for loans with their children or grandchildren to help them afford ballooning tuition.

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Time Magazine reports:

60 and Still Not Out of Student Loan Debt: Seniors Facing $36 Billion in College Loans

The data indicates Americans ages 60 and over collectively owe $36 billion in student loans. About 5% of the $85 billion delinquent student loans in the U.S. is owed by borrowers ages 60 and over, and another 12% of the total is the responsibility of Americans ages 50 to 59. In some of these delinquent situations, Social Security checks are garnished in order to pay off student loans.

How does one get to an age in which you could see your grandchildren graduate from college--with hefty loans, no doubt--while still being on the hook for loans yourself? While some seniors have student loan debt lingering from their original degree earned in their 20s, they could also be burdened with debts related to higher-ed degrees pursued later in life, or perhaps because they co-signed for their children's or grandchildren's loans.

In any event, one thing seniors and young people have in common is that they both face an especially challenging jobs market, making it harder than ever to get student loans paid off. The unemployment rate among America's recent grads remains high enough to force the "Boomerang" generation to live with their parents, while SmartMoney reports that workers ages 55 and over who are laid off are unemployed for an average of 53.6 weeks, compared to just 39.4 weeks for those 54 and under.

At the same time, older Americans are increasingly finding it necessary to keep working--because their nest eggs and home values took a beating during the Great Recession, and/or because they still need to pay off credit cards, mortgages, student loans, and other debt. In 2001, just 13% of Americans ages 65 and over were employed; that figure ballooned to 18% by last summer.

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