Baby Boomers See Huge Increase of Student Debt
February 4, 2019
While much has been made of how student debt is impacting the finances of millennials, a new report from the Wall Street Journal shows that this isn’t just a problem for younger generations. The report found that Americans over the age of 60 owe $86 billion in student loan debt. As of 2017, the average baby boomer who has student loan debt owed $33,800. This is up 44 percent from 2010. In that same seven-year period, total student debt for people over the age of 60 increased by 161 percent. This is the largest increase for any age group.
Overall debt is an increasing burden for seniors, jumping 84 percent between 2010 and 2017. As of 2017, Americans over the age of 60 owed $615 billion in total debts, a large part of which is student loans. This has resulted in the federal government garnishing Social Security checks and tax refunds for those who have defaulted on their loans. In 2015, 44,000 people over the age of 65 saw such a garnishment. This is a 362 percent increase from a decade prior.
The Wall Street Journal points out that changes in student loan practices made after the last recession have shifted the burden of borrowing from the student to their parents. As lenders tightened their credit standards, more students were required to have cosigners. 93 percent of new private student loans now include a parent or other adult as a cosigner. Additionally, while the federal government caps the amount of money they will loan students, they offer “Parent Plus” loans for parents who wish to bridge the supplement the amount their children can receive.
Student Debt will leave many Boomers working longer than expected and unable to enjoy the retirement they expected.