WASHINGTON (AP) â Student loan debt isn’t just a problem for the young. A small, but growing percentage of seniors struggle to pay back education debt â tens of thousands even seeing their Social Security benefits offset when they cannot make payments.
Among Americans ages 65 to 74, 4 percent in 2010 carried federal student loan debt, up from 1 percent six years earlier, according to a Government Accountability Office report to be released Wednesday. For all seniors, the collective amount of student loan debt grew from about $2.8 billion in 2005 to about $18.2 billion last year.
“Some may think of student loan debt as just a young person’s problem,” Sen. Bill Nelson, D-Fla., chairman of the Senate Aging Committee, said in a statement. “Well, as it turns out, that’s increasingly not the case.”
The GAO found that about 80 percent of the student loan debt by seniors was for their own education while the rest was taken out for their children. It said federal data showed that seniors were more likely to default on loans for themselves compared with those they took out for their children.
It’s unclear when the loans originated, although the GAO noted that the time period to pay back such debt can range from a decade to 25 years. That means some older Americans could have taken out the loans when they were younger or later in life, such as workers who enrolled in college after a layoff in the midst of the economic downturn.
The number of older Americans who had their Social Security benefits offset to pay student loan debt increased about fivefold, from 31,000 to 155,000, from 2002 to 2013. About a quarter of loans held by seniors ages 65 to 74 were in default. The government can use a variety of tools to recoup student loans, such as docking wages or taking tax refund dollars.
“As the baby boomers continue to move into retirement, the number of older Americans with defaulted loans will only continue to increase,” the GAO said. “This creates the potential for an unpleasant surprise for some, as their benefits are offset and they face the possibility of a less secure retirement.”
Nelson’s committee scheduled a hearing Wednesday to address the issue.
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