Senior citizens owe $eighteen billion in student loans

rosemary anderson

At age fifty seven, Rosemary Anderson owes $ 152,000 on college student financial loans she took out twenty many years ago.

When they must be worrying about affording retirement, a expanding number of seniors are drowning in pupil financial loan personal debt as an alternative.

Between 2005 and 2013, scholar loan personal debt among seniors 65 and more mature rose by more than 600% from $ 2.eight billion to $ eighteen billion, according to a new report from the Govt Accountability Office.

Out of all student credit card debt holders, seniors still account for a little percentage. But their ranks are developing rapidly — quadrupling in measurement because 2004 to 706,000 households.

While the majority of personal debt, about eighty%, owed by seniors will come from loans taken out to fund their own higher education educations, 20% of financial loans ended up taken out for a youngster or dependent, in accordance to the GAO report.

At age fifty seven, Rosemary Anderson is approaching retirement age with $ 152,000 in student bank loan personal debt.

20 many years ago, she took out $ sixty five,000 in loans in purchase to pay out for her bachelor’s and master’s degrees. But following acquiring divorced, shedding her work and caring for her unwell brother, she fundamentally gave up on generating payments. She was hit tough by interest and penalties and the volume she owes has since climbed by tens of hundreds of dollars.

CNNMoney profiled Anderson previous thirty day period, and she testified at a congressional listening to about more mature Individuals with scholar personal debt on Wednesday.

“I will be indebted for existence,” Anderson explained in her testimony. “I uncover it quite ironic that I incurred this financial debt as a way to improve my existence, and nevertheless I sit right here these days since the debt has grow to be my undoing.”

Sen. Warren cites CNNMoney story in hearing  

Sen. Warren cites CNNMoney story in hearing

Default prices have also been climbing with a debtor’s age, the report found. While only 12% of federal scholar financial loans belonging to folks ages 25 to 49 ended up in default in 2013, that price spiked to 27% for People in america among 65 and 74 a long time previous, and to much more than fifty% for individuals seventy five and older.

Failing to shell out back these financial loans can have dire repercussions. Loan providers will even just take a bite out of Social Safety payments to get the funds they’re owed.

Previous 12 months, 156,000 Individuals had their Social Security benefits garnished since they experienced scholar loans that had been in default, in accordance to evaluation conducted by the U.S. Treasury for CNNMoney. That is triple the forty seven,500 men and women who experienced payments garnished in 2006.

“Some may feel of pupil bank loan financial debt as just a youthful person’s difficulty,” explained Senate Unique Committee on Growing older Chairman Monthly bill Nelson. “Nicely, as it turns out, which is more and more not the circumstance.”

CNN’s Patrick Sheridan contributed to this report.

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