EMERYVILLE, Calif., July 25, 2018 /PRNewswire/ -- Student loan debt is often associated with the young, yet Americans over the age of 60 are the fastest growing segment of consumers with substantial student debt. A 2017 report by the Consumer Financial Protection Bureau (CFPB) found that the number of student loan borrowers over the age of 60 has quadrupled since 2005, increasing from about 700,000 to 2.8 million older adults as of 2015, and owed about $66.7 billion in student loans. More recent statistics show that people who are 50 years or older had an increase in federal student loan debt by about $18 billion between the second quarter of the fiscal year in 2017 and first quarter of the fiscal year in 2018. At an age when older Americans should be able to focus on retirement, they're instead struggling to pay off crushing debt. American Financial Benefits Center (AFBC), a document preparation company that helps its clients with federal repayment plan applications encourages older Americans to see if federal repayment plan options are right for them.
"The hardest part for older Americans is that along the course of their lives, they've collected different types of debt," said Sara Molina, manager at AFBC. "While young people with debt are often just starting out financially, older people often have mortgages, car and business loans, credit cards. Having so many forms of debt makes it really hard to focus on paying off student loan balances."
While some older Americans may be still carrying student loan debt from their younger days, many middle-aged and older people are choosing to return to college to finish degrees or pursue a career change. In 2015 approximately 3.4 million students aged 35 and older enrolled in degree-granting postsecondary institutions. Another reason older people are taking on more student debt is that many are taking out loans for their children and grandchildren's education. According to the CFPB, in 2014, 73 percent of student loan borrowers who were 60 and older reported the loan was for a child or grandchild, while 27 percent said the loan was for themselves or a spouse.
"What we're seeing with older adults is they're taking on debt in an attempt to ensure their children and grandchildren's financial future," states Molina. "The truly unfortunate thing is they may be sacrificing their own financial security and ability to retire."
The CFPB report found that people between the ages of 50 and 59 with student loan debt had fewer retirement savings than their peers without student debt, as well as a lower median amount in their employer retirement accounts or IRAs. A law passed in 1996 allows government agencies to collect on debt by offsetting Social Security payments to beneficiaries; in 2015, 40,000 borrowers over the age of 65 reported that their social security benefits were offset because of unpaid student loans, making the impact of student debt even more of a hardship for those already struggling with their finances.
For older Americans, income-driven repayment plans (IDRs) may be an excellent option to help pay off their loans and stay financially afloat. IDRs take into account a borrower's income and family size and readjusts payments to make them more affordable for the borrower.
"We truly believe all Americans should be as comfortable as possible in their older years," says Molina. "Being able to provide services to help our clients apply for and stay enrolled in IDRs and possibly impact their retirement future in such a positive way is something we're very proud of."
About American Financial Benefits Center
American Financial Benefits Center is a document preparation company that helps clients apply for federal student loan repayment plans that fit their personal financial and student loan situation. Through its strict customer service guidelines, the company strives for the highest levels of honesty and integrity.
Each AFBC telephone representative has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).
To learn more about American Financial Benefits Center, please contact:
American Financial Benefits Center
1900 Powell Street #600
Emeryville, CA 94608
Senior Couple Looking at Finances
SOURCE American Financial Benefits Center