Seniors Increasingly Struggling with Student Loan Debt
Contrary to common belief, student loan debt isn’t just a problem for the young. Seniors are increasingly bearing the burden of overwhelming education loans.
While older debtors still make up a relatively small portion of the student debt pie, their numbers are steadily on the rise. Between 2005 and 2013, student loan debt held by people over age 65 soared by 600%, from $2.8 billion to $18 billion. More than 700,000 senior households are now home to someone with education debt.
In about 20% of cases, seniors took out the student debt to help a child, grandchild or dependent. However, the rest of the time, loans were for a debtor’s own college education.
Loss of income, credit card debt, medical bills, mortgage payments and divorce are among the most common obstacles preventing debtors from paying off their loans. Making matters worse, struggling borrowers who fall behind on payments must also contend with interest and penalties tacked on to their existing balances.
Not only can overwhelming student loan debt interfere with seniors’ retirement plans, it can also threaten their very livelihoods. More than 150,000 Americans had Social Security benefits garnished in 2013 because of delinquent student loans – that’s three times higher than in 2006.
It’s a sticky situation for older debtors - not to mention a wakeup call for younger student loan holders heading down the same path, some who are carrying debt loads of $100,000 or more.
So what’s a struggling debtor to do? Not fall into default in the first place, if you can help it! It’s much better to find a repayment plan than to worsen an already problematic scenario by putting off making payments. If you can no longer afford your debt, be upfront with lenders. Many will work with borrowers to develop deferment, postponement or revised payment plans that provide enough breathing room to make paying off debt possible.
When other debts are putting pressure on finances, bankruptcy may be able to help. While filing for Chapter 7 or Chapter 13 bankruptcy can’t eliminate student debt, it can relieve the burden of the many other forms of unsecured debt – such as credit card debt and medical bills - that seniors commonly face.
If you’re struggling to keep up with debt payments – no matter what your age - you are not alone. From negotiating with lenders to alleviating your overall debt load with bankruptcy, there is a solution to every debt dilemma. What’s important is that you take action.
To find out if bankruptcy could help you find relief from overwhelming debt, contact DebtStoppers today to schedule your free one-on-one debt analysis with an experienced bankruptcy attorney.
Senior citizens owe $18 billion in student loans, by Blake Ellis, CNN Money