In the latest sign of just how far-reaching student loan debt has become, the issue is now on the radar of another, perhaps more surprising group: AARP. Over the past several years, the nation’s leading senior lobby has become increasingly involved in student-loan issues, pressuring the federal government to stop garnishing the Social Security benefits of older borrowers who defaulted on their loans. And in some state capitals the group is taking on the student loan industry, pushing for more regulations to police abusive loan-collection practices.
A retirement organization may seem like an unlikely force for reform of student debt. But AARP’s involvement underscores just how long a shadow student loans are increasingly casting over Americans’ economic lives—a shadow that stretches all the way into their retirement. Remarkably, Americans over 60 years old are the fastest-growing category of student loan borrowers, having roughly quadrupled in number between 2005 and 2015, according to the Consumer Financial Protection Bureau. Although older borrowers still account for just a sliver of the more than $1.5 trillion in total outstanding student loan debt, they’re more likely than younger borrowers to be behind on payments. Most are repaying debt they took out to help finance the education of their children or grandchildren, though some are still paying off their own tuition.
AARP updated its policy agenda last year to include a new focus on higher education, calling for greater transparency in how colleges set tuition and fees, more state and federal spending on higher education, and regulations to reign in for-profit colleges with poor outcomes. A more pressing concern for some older loan borrowers is Social Security garnishment, which AARP has long opposed. In the 2015 fiscal year, according to the Government Accountability Office, the government garnished the Social Security benefits of almost 114,000 student loan borrowers over 50 years old, reducing their benefits, on average, by more than $140 per month.
College graduates now entering the workforce will face “a double whammy of their own student loans stalling them in the beginning—and then their kids’ student loans potentially stalling them later on,” says Geoff Sanzenbacher, associate director of research at Boston College’s Center for Retirement Research. “It’s going to be a bigger problem in the future than it has been so far.”
You can find the full article at Politico.