Student Loans and Senior Citizens?

Don't carry those loans late in life

Those of us who are interested in personal finance are aware of notion that student loans can be that proverbial monkey that people want to get off their back.  A loan taken when young can take years to pay off, and keep a person in debt for a while.

We’ve talked about the value of college in debates on college vs. entrepreneurship, as well in a discussion on how education can increase wealth.  One of the other factors in the equation, which we touched on in those posts, is the reality that student loans can be a real burden. Thus it’s important to choose schools and programs wisely, and consider ROI.

A recent article in the Washington Post actually brought this last point to light in a way that certainly caught my attention.  According to the article, there are many people in their 50’s and even 60’s who are paying down student loans.  That’s right: student loans can be a burden for senior citizens!

A chart in the online article indicated that of the student loans that are past due as of the 3rd quarter of 2011, 12.1% were for people in their 50’s, and 4.8% were for people in their 60’s!

That’s really something else. Those debts just don’t go away. Now, to be sure, some of those people might have taken on loans later in life upon returning to school. That doesn’t make it any less unpleasant to have debt later in life though.  But more eye opening is the notion that some people are still dealing with their initial round of loan obligations as they near retirement eligibility!

While I think that it can be said that a lot of debt is bad, student loans can be a more tolerable version of debt since it is being used to invest in one’s future and potential earning power. That’s different from buying an overpriced house or car. However, this goes to show that not all student loans are smart, and good loans can become bad if the repayments aren’t managed properly over the years.

To avoid such a situation, it seems like a good idea to strongly consider ROI when picking out a school and program.  Unless a school is a world renowned name brand, such as an Ivy or Ivy equivalent, it seems like a really good state school might be a better investment than an expensive private school without the name brand.  Does that make sense? Also, majoring in underwater basket weaving or some similar non-marketable endeavor is sure to wreak havoc with that ROI as well.

The big thing I see is that getting a good foundation of financial knowledge when growing up, from a parent or guardian, can be invaluable to people.  Signing up for significant debt shouldn’t be considered a rite of passage for everyone, when the idea for many of us is to work toward financial freedom.

Can you imagine not being able to buy a grandchild a toy, because you had to pay off your own student loan?

My Questions for You

Does this surprise you at all, that there are people out there in their 50’s and especially 60’s that are still paying off their own student loans?

What do you think a solution can be for these types of situations to be avoided?

Did you have any student loans at any time, and how long did it take to pay off? Or, if you still have them, when do you envision getting them paid off?


  1. says

    I’m not going to say this surprises me because many people try to leave student loans in deferral as long as possible. If you have a student that takes 5+ years to graduate, or have some that went to school, got a job, and then went back to get their Masters, then it’s likely they’d defer the loans again when they went back the 2nd time.

    I’m currently coaching somebody that is in their mid-30s (has a masters) that has had their student loans deferred for years and she won’t be finished paying the big ones off until she’s 50.

    I do have student loans (I’m 27) and we started with $85,000 of them. :) Oh joy. We’ll have them paid off in the next 2-3 years.

    • Squirrelers says

      WSL – well, 2 to 3 years isn’t too bad! A lot of work, but won’t that feel great to have them gone?!

  2. says

    Student loans are a bear, when you graduate, they give you false expectations that you will be earning 50k a year. You see what little income is coming in and you have life expenses so, I see why deferring at beginning some people do it. It is not good to do, but I do see why. I hope I am not a senior when I finally am done paying off mine and my wifes masters degrees and undergrad!

    • Squirrelers says

      Christopher – It can be a tough situation for some people, no question about it. Hope you aren’t a senior when paying them off too!

  3. says

    I hadn’t even thought of student loans for the older generation – I couldn’t fathom taking that long to pay mine off. I only have $14500 in student loans which sound like a lot but I’ll be able to pay it off far before my 30s.

  4. says

    I am very surprised. I thought people in their 50s and 60s should have paid those student loans off long ago. That is a tough spot to be in. What happens if they don’t pay the loan, can the government garnish social security payments?

  5. says

    Wow, I must say that really shocks me, about people in their 50s and 60s still repaying student loans. The only solutions I can think of are for taxpayers to better support public universities, or for politicians to put a higher priority on public university funding. Given the prevailing anti-tax mentality, I don’t see the former happening–unless people increase donations directly to universities and bypass the political process–probably a good strategy if you’re conceded about the very high cost of higher education.

    I graduated with $15,000 in student debt–trivial by today’s standards–and repaid it within about 5 years.

    • Squirrelers says

      Kurt – that sure is trivial by today’s standards! Glad you got it taken care of without letting it drag on!

  6. says

    Wow! I’m incredibly surprised by those numbers. Before writing off the private school completely make sure and compare the actual amount you’ll pay without loans. I’ve been pleasantly surprised by how narrow the margin is between our state schools and some of my kids’ private school choices.

  7. says

    This is such a disheartening topic… it’s bad enough to see so many recent graduates struggling with student loan debt, but for senior citizens to still have this kind of debt hanging around… yikes!

    I would imagine this would only become increasingly prevalent unless we start re-evaluating how we’re borrowing and lending in this country. College tuitions continue to rise and high paying jobs are hard to find for many… something’s gotta give!

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