Report Shows 2.2 Million Americans Ages 55 and Older Are Still Burdened by Student Loan Debt

A recent survey revealed that millions of Americans nearing retirement age still carry student loan debt.

The Federal Reserve Board’s 2022 Survey of Consumer Finances showed that 2.2 million Americans aged 55 and above have not yet paid off their college loans. An analysis by The New School’s Schwartz Center for Economic Policy suggests that this debt burden is affecting their retirement plans.

The analysis indicates that 43% of borrowers in this age group fall into the middle-income category. On average, those who earn less than $54,600 owe around $58,000 in student debt.

Various solutions were proposed in the report to help ease the financial strain caused by these loans on older Americans.

“Three policies could help reduce the negative effects of student debt on retirement savings: student loan forgiveness, income-based repayment plans (part of the Saving on a Valuable Education (SAVE) plan), and preventing Social Security benefits garnishment for student loan repayments,” the analysis stated.

The survey coincides with the U.S. Department of Education’s recent announcement of an increase in interest rates on federally backed student loans to 6.53% for the 2024-2025 academic year.

The escalating student loan rates and resulting financial hardships have become a nationwide concern, with relief from college debt forming a central part of President Joe Biden’s reelection campaign.

In August 2022, Biden proposed a significant program to cancel billions in student loan debt, which was subsequently deemed unconstitutional by the Supreme Court the following year. Undaunted, the Biden Administration unveiled a new plan in April to “deliver debt relief to over 30 million Americans,” asserting that this move would benefit borrowers and the entire economy.