If Thelma Richards continues to pay $917 a month, every month, for the foreseeable future, she'll pay off her student loans by the end of 2042. The problem is, by then she'll be 87 years old. "I don't think I'm going to live that long," she says, laughing. "I'm not joking!" Richards, 65, who lives in Little Falls, N.Y., represents a growing number of older Americans, who are now more likely than ever to hold student debt well into retirement age. According to a January report from the U.S. Consumer Financial Protection Bureau (CFPB), the number of Americans aged 60 and older carrying student debt doubled in the past five years.
The rapid rise in older Americans taking on student loans has two main causes. The first is that parents and grandparents are co-signing loans to support the younger generation. The second is that older Americans are increasingly taking student loans for themselves. With blue-collar jobs decreasing, people in their 40s and 50s are going back to school to acquire new skills.
Richards, for example, who worked as a waitress while raising three children as a single mom, went back to college in her 40s to earn a degree in occupational treatment. While her new profession produces a higher income and health care benefits, it has also left her with a lifetime of debt. Trends leave older borrowers in a bind. They have less time in the workforce and are more likely to become ill, often in a weaker position to pay back loans. Making monthly payments on a fixed income is also more difficult than it is for younger borrowers, whose incomes are more likely to grow.
According to the CFPB report, more than a third of those aged 60 and older with student debt had given up medical care to afford their loan payments. And there's no way out. Robert Farrington, the founder of the website the College Investor, says one main piece of advice for older borrowers is simply to avoid any loan that isn't repayable in 10 years. "Remember," he says, "if you don't pay, they'll come after you."
