Commentary: The Aging Student Debtors of America
Americans aged 62 and older are the fastest-growing demographic of student borrowers, according to a commentary in the New Yorker. Of the 45 million Americans who hold student debt, one in five are more than 50 years old. Between 2004 and 2018, student loan balances for borrowers over 50 increased by 512 percent. Perhaps because policymakers have considered student debt as the burden of upwardly mobile young people, inaction has seemed a reasonable response, as if time itself will solve the problem. But in an era of declining wages and rising debt, Americans are not aging out of their student loans; they are aging into them, according to the commentary. Credit supposes that which we cannot afford today will be able to be paid back by tomorrow’s wealthier self — a self who is wealthier because of riches leveraged by these debts. Perhaps no form of credit better embodies the myth of a future, richer self than student loans. However, the surge of aging debtors calls into question the premise of education for human capital. Eroding union density, declining wages and skyrocketing tuition have all made college less a path to high-paying jobs than an escape hatch from the worst-paying ones. Those who have taken on debt are increasingly unable to pay it off; many haven’t even received diplomas. Older student debtors are not exceptional cases within the mounting student-debt crisis; their experiences are, in fact, indicative of its hallmark features, according to the commentary. Mounting interest, looming balances, faulty relief methods and declining wages all are forcing borrowers to carry loans for longer and longer, pushing student debt across generations. Older debtors shuffle their income between credit card bills, house payments and car loans; student debts, often the furthest from their day-to-day lives, get paid off last — or don’t get paid at all. For aging borrowers on declining incomes, the crisis is acute: Student debtors over age 65 default at the highest rates. In 2015, more than a third of borrowers in their age group defaulted on their educational loans. Read more.
∗The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.