Graduating with student loan debt is an all too common reality for new college degree holders beginning their careers. But there’s another, often overlooked cohort of debtors facing their own set of challenges: Americans over the age of 55 approaching their retirement years.
About 2.2 million people over the age of 55 have outstanding student loans, according to data from the Federal Reserve Board’s 2022 Survey of Consumer Finance. These older workers and unemployed people say the loans they took out years earlier could hinder their ability to retire comfortably, according to a new report from The New School’s Schwartz Center for Economic Policy Analysis.
“This is not a problem that’s going away… it’s only going to get worse,” the report’s author, Karthik Manickam, said in a press conference Wednesday to discuss the findings.
How did the loan even wind up lasting that long in the first place? Shouldn’t the repayment terms have had it being paid off way before that? I mean, you’d have to have that loan outstanding for something like 40 years for it to reach retirement age. Even house loan terms aren’t that long.
kagis
Ah. Apparently federal student loans are normally up to 10 years, but the borrower can get them extended or refinanced. And a private loan could have whatever terms, and some of those run longer.
That’s also assuming those all reflect bachelors degrees. You can also get loans for asters, doctorates, medical, and technical degrees, as well as ongoing learning requirements
In my experience, the minimum student loan payments are less than the interest. So if you can only afford the minimum (or less than the interest) then the debt grows faster than you pay it off.