Student Loan Debt Surging for Americans 50 and Older: AARP
The senior advocacy group is launching a student debt management tool.
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.
American 50 and older have student loan debt from their own educational pursuits, or they borrow to finance their children’s education or co-sign private student loans. AARP found that 1 in 4 co-signers 50 and older have to make payments because the student borrower fails to do so.
New Tool
AARP has collaborated with Savi, a social impact technology startup, on a tool to help people identify the best payment options, with special features for those 50 and older.
The Savi Student Loan Repayment Tool provides individuals with a free, personalized assessment of student loan repayment options. It can also help identify loan forgiveness opportunities based on employment, and assistance in preparing and filing paperwork.
“This is about changing the narrative and providing freedom from the burdens of student debt to those who need it most,” Savi co-founder Tobin Van Ostern said in the statement.
AARP worked with Savi to customize the tool for older borrowers, and includes:
- Options for various national and state repayment and forgiveness programs.
- Ways to synchronize federal and private loans across all loan servicers easily with industry-standard security.
- Support from student loan experts.
- Access to free educational resources.
AARP has also worked with Savi to help provide this tool to low-income older adults at no cost through the AARP Foundation.
AARP noted in its statement that its collaboration with Savi does not involve or promote student loan refinancing and only supports taking advantage of existing student loan options.