Why Seniors Owe Billions in Student Debt

Student debt is a prickly political issue. Many people believe that students should be obliged to pay a contribution towards their education, whereas others feel that this could prevent those from a disadvantaged background realising their potential. Much focus is placed on the average and total amount of student debt, but new research shows a surprising fact about the demographic of those who owe significant sums of money.

The research, undertaken by the Federal Reserve Bank of New York shows that a startling amount of student debt is actually owed by Americans that are aged 60 and over. Student debt liabilities for this age group were found to be at around $36 billion – a significant sum of money by anybody’s standards. So how has this group of people ended up with so much student debt.

The debt is divided into two categories:

1. Student loans that were taken out by the seniors and have yet to be paid off

2. Student loans that were taken out by the seniors’ children or grandchildren but for which the seniors have retained the liability.

In some cases, senior citizens have been attempting to repay student debts for many years. This could be from a very early student loan, or could have been incurred by a later attempt to return to the education system, which created a debt. Many people believed that further education later in life would help them secure and retain employment for longer, in what has become an increasingly competitive market. In many cases, that reality simply didn’t materialize, leaving the debt to be repaid over many years.

Many seniors have also attempted to fund the education of their children or grandchildren, financing them through the process and then finding that despite have better qualifications, their families were in no stronger a position to find work. In other cases, of course, those grandchildren may well have done the dishonorable thing, and disappeared, without trying to pay off any of the debts that they ran up.

Student debt is particularly difficult to avoid in the U.S., as even if individuals file for personal bankruptcy, these loans are not written off and cannot be dismissed. As such, all debts incurred must continue to be aid off, whatever the circumstances, as The Washington Post highlights.

These new data reveal a worrying statistic when it comes to the well-being of older Americans. Forced further into a life of poverty by an aspiration that should have had the opposite effect, these individuals are supporting the case that the benefits of a college degree are being lost by the cost of student debt.