Student Debt is Strangling Older Americans
That’s a strange statement. Is it possible that student debt is strangling older Americans? This is a well-known Millennial problem that also affects Gen X, but Baby Boomers are an unnoticed group affected by student debt.
The Public Broadcasting System (PBS) released a report on October 14, discussing the issue, available in text or audio. PBS discovered that almost 3 million Americans over the age of 60 owe an average of $24,000 in student loans. Another example of why parenting is not for the weak.
While 27% of these Americans took out students loans for their own education, hoping to get ahead in their careers, more than 70% took out student loans for their children’s and grandchildren’s education. The student loans were available through programs that allow parents to take out loans for children without verifying income if a college or university says the money is required for the student to gain their education.
PBS interviews one retired borrower who returned to college for a Masters degree to advance in her career, expecting an income raise after completing the degree and returning to work. But her income never rose and she is taking home the same income she had in the 1980s.
Several factors contribute to the lack of rising income, including the 1987 recession, the 1999-2000 dot-com bust that was followed by a mild recession, and then the Great Recession. Many incomes never recovered from the every-decade recessions, losing ground without raises and few rewards on further advanced education.
A major contributing factor is student debt is rarely forgiven, some of these Baby Boomers are struggling to make ends meet while their Social Security checks are garnished. One of the few ways student debt is forgiven is through a little known program named the Disability Discharge program. Oregon Senator Ron Wyden and Ohio Senator Sherrod Brown are sponsoring a bill to stop Social Security garnishment, but the bill has not moved forward.
For more information, read the PBS report and read the study from Consumer Financial Protection Bureau, Snapshot of Older Consumers and Student Loan Debt (PDF).
