As Baby Boomers age, student loan debt is likely to become a bigger problem.
Some 4.7 million Americans in their fifties owe education debt, up from 2.3 million in 2005, and the total amount is three times as high as it was nearly a decade ago, according to the Treasury Department.
More than 2 million Americans age 60 and older are carrying student debt, up from about 700,000 in 2005, according to the Federal Reserve Bank of New York. The debts are from old loans and more recent ones that older Americans take to go back to school or pay for college for their kids.
In total, this group has $43 billion in unpaid loans, five times what they owed in 2005. The average debt also has risen by more than 60% since 2005, to around $20,000 per borrower older than 60.
The government has the power to seize portions of the pay or Social Security checks of those who've stopped paying their federal student loans. It can also confiscate tax rebates. Borrowers can negotiate a repayment plan with the government to get out of default.
From January through July of this year, the government withheld money from the Social Security checks of 140,000 people, according to Department of Treasury data. A decade ago, a third as many seniors lost part of the benefit to pay off loans.
Source: Bloomberg BusinessWeek, August 25, 2014
Books for Boomers: Reviews & Coaching Tips (FREE ebook edition)
Boomer Retirement Life Tips (ebook edition)