‘A war on the old and the poor’: 70-year-old with $84K in student loan debt worries Social Security won’t be enough to survive on if SAVE Plan is scrapped. Millions face end of debt relief

Older Americans are struggling with student debt

Americans have a collective $1.59 trillion in outstanding student loan debt, according to the Federal Reserve Bank of New York. While ballooning student debt is often seen as a problem that affects younger Americans, it affects older people too — and not just those who are paying off federal Parent PLUS loans on behalf of their children.

The number of Americans approaching retirement age with student loan debt has skyrocketed by more than 500% in about 20 years, according to New America. The think tank reported that in 2022 3.5 million Americans over the age of 60 held $1.25 billion in student loan debt.

In many cases, they’re still paying off loans for their own post-secondary education, according to the U.S. Government Accountability Office (GAO). Most owed less than $10,000 at the time of their initial offset, but thanks to accruing interest, those debts are following them into their golden years.

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What happens next

With the SAVE program in limbo, many Americans are wondering what to do, if anything. For younger Americans, a pause on SAVE — which could be held up in the courts for months or even years — could give them some breathing room. But, while student loan payments are on pause, it also means borrowers aren’t able to earn IDR forgiveness credit.

For someone close to debt forgiveness, a buyback option from the Department of Education allows borrowers to make retroactive payments and receive credit for those payments (though this isn’t an option for Sue, since she’s not close to debt forgiveness). Borrowers could also consider switching to another repayment plan, but depending on their situation, it may make more sense to wait it out. If SAVE does get the axe, other IDR plans may still be an option.

During this time, while student loan payments are on pause, borrowers may want to use that money to pay off other debts (or put it aside in a high-interest savings account). But for older Americans on a fixed income, like Sue, their options may be more limited. While Sue could look for part-time work to bring in more money — something more reliable than babysitting and dog walking — she may also want to explore other avenues for loan repayment and stay up-to-date with SAVE Plan court actions.