3.6 Million Seniors Have Student Loan Debt. Here’s What To Do

At the age of 65, Lori Stone made her final student loan payment. After paying her student loan debt for 21 years, her loan balance was forgiven. At the time of forgiveness, she still owed $15,000.

“I cried when my loans were forgiven,” recalls Stone, “and I felt such a tremendous relief. I had spent so much energy worrying that my kids would ‘inherit’ the debt.”

Stone attended college for the first time at the age of 36 and graduated with a Ph.D. in social psychology at the age of 45. But even with Pell Grants, two part-time jobs, fellowships and scholarships paying for her education, Stone still needed financial assistance to raise her family while going to school. So, she turned to federal student loans.

“I had three kids, no savings or money, no child support and no financial help,” she says. “Basically, my loans paid for supporting my family while I was in graduate school. Without them, I simply would not have been able to afford my education.”

Upon earning her final degree, Stone had about $50,000 of student loan debt. “I half-considered the impact when I took on the loans,” she admits, “but I so desperately wanted an education… I never dreamed I’d live with [the loans] for so long.”

Stone’s story isn’t uncommon. Millions of older adults are approaching their golden years saddled with student debt. Many carry this financial burden from their own education, while others have taken on debt through parent loans or cosigning student loans for their children and grandchildren.

Seniors are the fastest growing population with student loan debt

“When many people think about student debt, they think of young people — perhaps those who recently went to college,” says Rich Williams, chief customer officer at Summer and former deputy assistant secretary of policy, planning, and innovation at the Department of Education. “But the reality is student debt is a cross-generational problem, and older Americans are the fastest growing borrower segment for student loan debt. In fact, more older Americans carry student loan debt than ever before.”

According to data from the Department of Education, the number of federal student loan debtors aged 62 and older went from 1.7 million in 2017 to 2.8 million in 2024 — a 65 percent increase. And when you include 60- and 61-year-old student loan debtors, the number jumps to more than 3.6 million, per a Consumer Financial Protection Bureau analysis. Within this demographic, the average loan balances range from $17,857 to $44,834.

Of borrowers who are 62 and older, 1.48 million have held these loans for more than 15 years. According to Williams, there are many reasons loans follow borrowers into their sixties. For example, some borrowers may have taken advantage of repayment programs that allowed them to lower their monthly payments by extending their term.

“The longer it takes a borrower to repay their loan under certain plans, the more interest that could accrue, potentially increasing their balance,” says Williams.

Other older adults are on fixed incomes in retirement and have limited financial resources to dedicate to loan payments or have struggled to make payments in the past and remain stuck in collections. According to the Student Borrower Protection Center, “Because there is no statute of limitations on collections for federal student loans, these borrowers can remain locked in the Department’s debt collection machinery indefinitely.”

This debt weighs on older Americans no matter how they got there.

How student loan balances impact senior lives

Debt at any age can be a burden for the borrower but may affect older populations’ quality of life even more. Paying student debt has caused some to put off retirement, take money out of their 401k, forgo medical care or use funds from their limited income sources to make their monthly payment.

Why go to such lengths to make payments? Because defaulting on their federal loans could be much worse.

“The federal government has very powerful collection tools,” says Williams, who warns that the government can garnish wages or federal benefits, including tax refunds or Social Security benefits, to collect what’s owed.

According to the CFPB, the number of older Americans experiencing forced collection against their Social Security grew 3,000 percent in the last two decades. A little more than one in three student loan borrowers receiving Social Security are reliant on that benefit. Only $750 per month of that income is protected from garnishment. That’s $400 below the monthly poverty threshold, according to the CFPB, meaning student loan debt could literally push older Americans into poverty.

Of course, there are psychological consequences that come with debt burden as well, including anxiety, frustration, depression and hopelessness. According to Bankrate’s latest Money and Mental Health Survey, of the 40 percent of Baby Boomers (age 60-78) who say money negatively affects their mental health, at least occasionally, 48 percent cited debt as a money concern causing a negative impact on their mental health.

“For me, the impact had become more psychological and emotional than a true financial burden,” says Stone. “I came to assume I’d be paying them until I died.”

What happens if a student loan borrower passes away?

Many older student loan borrowers worry that their debt will be passed onto their heirs if they pass away with remaining balances. However, that may not be the case, depending on the type of student loans they have.

• Federal loans: If a borrower has federal student loans for their own education, the government discharges the remaining debt upon their passing once proof of death has been submitted.
• Private loans: According to Williams, private student loan lenders are not legally required to offer a death discharge, though some may offer one. He suggests reviewing the terms of each loan offer very carefully when comparing student loan lenders to make sure a death discharge condition is included.

Even if loans may be discharged upon death, it’s still important borrowers avoid default by making payments while alive. Senior student loan borrowers can take action to ease the burden.

What older student loan borrowers can do

It’s important for older adults to know that programs and resources exist to help borrowers in need. From repayment plans and forgiveness programs to borrower advocates and communities, you may be able to find assistance and relief.

Research income-driven repayment plans

Income-driven repayment plans are available for federal student loans and base your monthly payment on your income. If you’re in retirement, these plans base your payment on adjusted gross income (AGI) from sources like investments and Social Security, according to Williams. While some IDR plans may no longer offer forgiveness, the Income-Based Repayment plan still does.

It’s important to note that FFELP and Perkins Loans do not qualify for IDR plans. However, if you consolidate your loans through federal loan consolidation, you can then enroll in IDR.

If your student loans are in default, you cannot apply for an IDR plan until you’re out. Williams recommends researching second-chance options, like loan rehabilitation or federal loan consolidation.

Review student loan forgiveness eligibility

You may be able to qualify for student loan forgiveness through one of a few programs. The total and permanent disability discharge will forgive student loans for borrowers who are totally and permanently disabled, whether physically or mentally. There’s also Public Service Loan Forgiveness for those who work for qualifying government or nonprofit agencies.

Consider student loan refinancing

You may consider refinancing your private student loans to consolidate them into one loan with a single payment and interest rate. This can help make your payments more manageable and save you money on interest.

Many federal student loans disbursed before 2006 have variable interest rates that may change each year. Refinancing them into a private student loan may allow you to opt for a fixed interest rate that stays the same throughout the life of the loan. A fixed interest rate provides more predictable payments and helps you avoid higher payments if and when interest rates rise.

But before refinancing federal student loans, consider the benefits you may lose by doing so, including income-driven repayment and robust deferment and forbearance options.

Reach out to student loan borrower advocates

Don’t be afraid to ask for help if you need it. With so many older adults facing student loan debt, many programs and individuals have stepped up to offer assistance:

• Student loan lawyers may be able to help with issues like defense against collections cases. Their negotiation can help lower the amount of money the government can garnish.
• Employers may offer student loan and education assistance as part of their benefit packages.
• Federal and state student loan ombudspersons help deal with student loan issues.
• Nonprofits may provide information, advice and resources for borrowers, like the Student Borrower Protection Center’s congressional toolkit for opening a student loan issue with congressional caseworkers.
• Communities can offer help or the opportunity to share your story with like-minded individuals and get involved in the politics of student loans. For example, Debt Collective’s 50 over 50 group has participated in press conferences and taken action in Washington, D.C.

Borrowers should never pay for help accessing federal student aid. Look to reputable resources for help and support.

— Rich Williams
Chief Customer Officer at Summer

Bottom line

People often wonder, are student loans worth it? Even with the financial burden, many find that they are. But it’s important to protect that value by making sure you understand the terms of your loan, what changes may impact you and the rights you have as a borrower. If it gets to a point where you are struggling to understand your loan’s terms and your rights, or you cannot keep up with payments, it’s time to seek help.

“It is going to become harder to navigate the student loan repayment program,” warns Williams. “Scammers are certainly going to take advantage of that. Borrowers should never pay for help accessing federal student aid. Look to reputable resources for help and support.”