Many of our Houston readers probably think of student loans as something that affects only college- and middle-aged Texans. Unfortunately, as the national student debt load continues to grow, the number of people who are not affected by student loans in some way is also steadily declining.
In fact, a large number of people over 60 are now dealing with student loan debt, causing many to delay their retirement or drastically alter their estate planning in order to meet their student loan obligations. And it is not only grandchildren or other family members who are incurring the debt: many of the loans are taken out by Americans near retirement age.
According to AARP, people over the age of 60 currently owe approximately $43 million in student loans, and nearly 10 percent of the debt holders are more than 90 days past due on their loans. The number of over-60 debtors who are delinquent on loans has increased by about 4 percent since 2005, and that number is likely to continue growing in the coming months and years.
Because older Americans have less time than their younger counterparts to repay their debts before they reach retirement, student loan debt can have a huge effect on the financial health and future of people over the age of 60. A large amount of outstanding student loans can force the delay of retirement, can make it more difficult to pay for medical needs or long-term care, and can significantly affect estate plans. As such, it is clear that reform is needed in order to protect older Americans from the serious harm that student loan debt can cause.
Source: AARP, “Student Loans Crushing Hopes for Some Near Retirees,” Carole Fleck, Nov. 12, 2012