What You Need to Know
- About a fifth of student loan debt is not eligible for the payment pause instituted in 2020.
- AARP worked with Savi to customize the Student Loan Repayment Tool for older borrowers.
- The tool does not involve or promote student loan refinancing.
Student loan debt has reached crisis proportions in the U.S., and it is a cross-generational problem, according to a new study.
The AARP Public Policy Institute reported this week that Americans 50 and older held $336.1 billion, or 22%, of the $1.6 trillion in student loan debt in 2020, up from 10%, or $455.2 billion, in 2004.
The organization also announced an initiative to help people manage their student debt.
“Student loan debt is becoming a burden for all generations, ensnaring more older adults and delaying or battering the retirement plans for many,” Gary Koenig, AARP’s vice president for financial security, said in a statement. “Paying for higher education was never meant to last a lifetime.”
In March, the Biden administration extended through September the payment suspension that started at the onset of the pandemic, including for some 7 million people 50 and older.
However, AARP’s analysis found that about a fifth of student loan debt, more than $300 million, is not eligible for the payment pause. AARP estimated that between 2 million and 3 million older debtholders may be left out.