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Student loan debt hardship for senior citizens

by | Nov 8, 2017 | Debt Relief

Student loan debt is far from trivial when it comes to affecting the current and future financial wherewithal of New Jersey residents. While many people think of young college students and new graduates as being subject to the plague of school debt, this is far from a complete picture.

In fact, middle-aged people and seniors are finding this epidemic to include them as well.

Impact on retirement plans

In fact, more than 15 percent of debt from student loans is for people older than 50 years of age. The impact on the ability to retire or even plan properly for the golden years is significant. One example includes a 60-year-old married woman who continues to pay on her $75,000 school loans. Her school loans originated in the 1970s. Despite her job, she and her husband have been unable to own a home and have very limited savings. When the school debt is in the calculation, she has negative net worth.

The garnishment of Social Security benefits of seniors

As noted by Consumer Reports, seniors who are retirees and receiving Social Security benefits can see their retirement benefits garnished to pay back school loans. At times, the school loans were for their own educational endeavors. Other times, they became liable on the loans of their children. An astounding seven million Americans 50 years or older have student loans outstanding. Almost 115,000 have seen their Social Security benefits offset, which is over four times what it was in 2002. For people over 65 years of age, the increase is greater than 500 percent for that same time period. With the aging baby boomer population, the number of seniors with student loan debt will likely increase, as will the number of those who will see their Social Security benefit reduced as a result.

Some solutions

Although there is not a magic solution, Consumer Reports notes that there are things seniors can consider to obtain relief if they are struggling. They include seeking a disability discharge, if applicable, as well as requesting a reduction in monthly payment obligation from the Department of Education based on hardship. Consolidation loans are also helpful, as they allow the senior to then apply for income-based repayment.

Also, if other significant debts are contributing to the hardship, bankruptcy, which unfortunately does not usually include the student loans, can still provide substantial relief of the other debts, which may alleviate much hardship.


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