The most recent data from the U.S. Department of Education shows that over 9 million adults age 50 and older are still paying off federal student loan debt — about 20 percent of all federal student loan borrowers.
How many are we talking about? Chris Farrell: There are about 3.5 million Americans 60 years and older. And they owe more than $125 billion in student loans. And the number of borrowers among this 60-plus age cohort, it's risen sixfold since 2004.
Your student loans won't be automatically forgiven when you retire.
Student loan debt totals $1.74 trillion and is held by about 43.5 million Americans, with the average monthly payment amounting to $337. Those are eye-opening numbers.
Generally, if you are approved for, and currently receiving Social Security Disability Insurance (SSDI) benefits, then you should be automatically identified through an existing data match with the SSA and have any qualifying student debt automatically forgiven.
At what age do student loans get written off? There is no specific age when students get their loans written off in the United States, but federal undergraduate loans are forgiven after 20 years, and federal graduate school loans are forgiven after 25 years.
There are no federal student loan forgiveness programs specifically for senior citizens.
Federal loan borrowers in repayment: 25.7 million. Federal loan borrowers in deferment: 3 million. Federal loan borrowers with loans in forbearance: 1.2 million. Federal loan borrowers in default: 4.4 million.
'A massive student debt strike'
The fact that up to 40% of borrowers didn't make a payment “reflects exactly what we've been warning would happen should Biden turn the debt collection apparatus back on,” said Astra Taylor, co-founder of the Debt Collective, a union for debtors.
Data Summary. The average federal student loan payment is about $302 for bachelor's and $208 for associate degree-completers. The average monthly repayment for master's degree-holders is about $688.
The number of people age 60 and older who still have student loan debt has sextupled since 2004 to 3.5 million, and the amount they owe is up 19-fold to $125 billion. Older Americans with student loan debt take second jobs, delay retirement, are less likely to own their own homes and suffer low credit scores.
Eventually, they age into one of the fastest growing subsets of student loan borrowers—adults approaching retirement age. Borrowers who still carry debt from their own education well into their senior years often attended low-value programs that did not provide enough support to help them reach graduation.
Since it's a debt owed to the government, if you default on a federal student loan, a portion of your Social Security benefits can be automatically garnished to repay the loan.
Still, the roughly 2.3 million borrowers in this age group carry a substantial amount of student loan debt. According to statistics from the U.S. Department of Education's Q4 2020 data, borrowers in this age group have an average balance of $37,739.13.
Over the past 15 years, outstanding student loan balance held by seniors has increased twentyfold. Seniors are increasingly carrying the burden of student loan debt in America, as many enter their golden years saddled with an extra monthly loan payment eating into their retirement savings.
The general answer is no, a creditor cannot seize or garnish your 401(k) assets. 401(k) plans are governed by a federal law known as ERISA (Employee Retirement Income Security Act of 1974). Assets in plans that fall under ERISA are protected from creditors.
Due to COVID-19-related student loan forbearance, the three-year federal student loan default rate in 2023, was technically 0.0%. The student loan default rate has declined since 2020. In 2022, the three-year student loan default rate was 2.3%. From 2016-2020, student loan default rates were around 10-11.5%.
Failing to pay your student loan within 90 days classifies the debt as delinquent, which means your credit rating will take a hit. After 270 days, the student loan is in default and may then be transferred to a collection agency. Keeping up with your student loan payments helps improve your credit score.
Key Points. Interest can make student loans more expensive, while inflation can make that debt harder to manage alongside other bills. Paying off some of your debt during your studies could ease the burden later on and save you money on interest.
Black and African American student borrowers are the most likely to struggle financially due to student loan debt making monthly payments of $250. Asian college graduates are the fastest to repay their loan debt and the most likely to earn a salary that exceeds their student loan debt balance.
By the numbers: Borrowers between 35 and 49 years old owe the most in federal student loans, according to Federal Student Aid data. Details: Women typically borrow more for college than men, according to NerdWallet, a personal finance company.
The federal government or a commercial entity owns your student loans. Private companies own all private loans. The U.S. Department of Education holds most federal loans. Both the Department of Education and private institutions partner with third parties called student loan servicers.
Older federal student loan debtors who fall behind on payments may be at risk of having their Social Security checks garnished.
The remaining unpaid balance of loans is forgiven after 25 years. Income-Based Repayment (IBR)—Depending on when you first took out loans (before or on or after July 1, 2014), payments are generally 10% or 15% of the borrower's discretionary income, but never more than the 10-year Standard repayment plan amount.
Is there an age limit for receiving federal student aid? No, there's no age limit. Almost everyone is eligible for some type of federal student aid. The adult student still needs to complete the FAFSA form, and make sure not to miss any deadlines, just like any other student.