Earning a college education is an important goal that many parents in Davidson want for their children. Therefore, many of those families take out student loans in order to be pay for things like tuition and room and board. However, when the loans are in the parents’ or grandparents’ names and those people begin to age out of the workforce, financial problems may ensue.
According to the National Association of Student Financial Aid Administrators, the segment of people with student loan debt that is rising the fastest is borrowers who are over 60. Not only is the number of people in that age bracket growing, but the amount that they owe is on the rise as well. In the ten-year period from 2005 to 2015, the average amount owed increased by $11,500.
In addition, Consumer Affairs reports that many older borrowers have run into roadblocks when trying to deal with their outstanding amounts. For example, some people reported being denied protections bestowed upon by them by laws governing co-signers of student loans. Some also reported not being told about income-based payment options. Such plans allow borrowers to have their mortgage payments lowered in proportion to how much income they earn.
Older people who are at or near retirement age often have little or no income and are forced to adhere to a strict budget. Many may already have other existing debts, such as credits cards and mortgages, to deal with. As a result, 40 percent of those in default of federal student loans were over the age of 65 in 2015.