Wednesday, September 21, 2022
The National Center on Law & Elder Rights has released a new practice tip, Cancellation of Debt & Other Changes to the Federal Student Loan System that Impact Older Borrowers.
Student loan debt is one of the biggest contributors to the rise in the amount of debt held by older adults. According to AARP, in 2020 8.4 million borrowers age 50 and older held 22% of the total federal student debt load, amounting to $336.1 billion. The average amount of student loan debt carried by families headed by adults 50 or older was $36,421 in 2019. This includes older borrowers who took out loans for their own education or to pay for a family member’s education. Default on student loans can result in aggressive collection actions, including the garnishment of wages and Social Security benefits, and an accumulation of fees and interest. Older adults consistently report difficulty managing their student loan debt while trying to stay on track to save for retirement or pay for other necessary expenses on reduced retirement incomes. This results in financial instability, especially for low-income older adults and those on f ixed-incomes.
The practice tip includes discussion of the moratorium on student loan collections, debt cancellation, public service loan foregiveness, changes under discussion for income-based repayment plans, and links to helpful resources.