Student loan debt is not just a problem for young people.
Still in the red on her old college loans, 57-year-old Rosemary Anderson told a Senate committee Wednesday about her ongoing battle with student debt, and her fear that the Social Security check she will start receiving when she reaches her 60s eventually will be garnished to pay it off.
During the course of a divorce, illness and financial hardships, Anderson’s $64,000 in student loans ballooned to more than $126,000.
“I find it very ironic that I incurred this debt as a way to improve my life, and yet I sit here today because the debt has become my undoing,” she testified at a hearing before the Senate Special Committee on Aging.
Anderson is not unique. The percentage of households headed by someone 65 to 74 years old with student debt increased to 4 percent in 2010 from 1 percent in 2004, according to a study released Wednesday by the Government Accountability Office.
The GAO also found that in 2005, the outstanding federal student debt for this age group was about $2.8 billion; by last year, it had climbed to more than $18 billion.
“While many think of student loan debt for just a young person, increasingly that is not the case,” said Sen. Bill Nelson, D-Fla., the committee chairman.
While student debt is not the prevailing type of debt among senior citizens _ most common are mortgages and credit cards _ about 706,000 households headed by someone 65 or older carry debt from their education. That’s 3 percent of households headed by someone in that age group.
Sen. Elizabeth Warren, D-Mass., said more and more Americans are dealing with student loan debt into their 50s, 60s, 70s and beyond.
“We can’t just bury our heads in the sand and hope that it goes away,” she said. “We need to face it head on, and find solutions that will reduce the burden of student debt and provide real protection for borrowers who find themselves struggling to pay back their loans.”
The GAO found that the majority of student loan debt for older Americans was incurred as a result of their own education, not the education of their children. Seventy-three percent of loans held by the 50-64 age group were incurred by borrowers paying for their own schooling; 82 percent for ages 65-74; and 83 percent for those 75 and older.
Anderson, who works for the University of California, Santa Cruz, attended college in her 30s and eventually graduated with bachelor’s and master’s degrees, according to her prepared testimony for the hearing. She said she decided to consolidate her loans to make one payment instead of having to keep track of all of the separate payments. When going through the almost yearlong consolidation process, she did not know that she could never refinance the loan.
Warren authored the Bank on Students Emergency Loan Refinancing Act, which would allow students to refinance their loans. It was filibustered earlier this year, but Sen. Dick Durbin, D-Ill., the majority whip, has said that the Senate would vote on the bill this month.