aNewDomain — Crushing student loan debt is not exclusive to the young. Rosemary Anderson amassed more than $60,000 in student loan debt in her thirties while pursuing her graduate degree. Now age 57, Anderson doesn’t think she’ll be able to pay off this loan completely until she’s 81.
Anderson spoke last fall to the U.S. Senate Special Committee on Aging, formed to address the problems of our nation’s aging population. One surprising finding was that many older Americans are struggling under the weight of student loan debt.
After finishing her degree, Anderson suffered through setbacks that are common for many Americans — a divorce, loss of employment and health issues. Over the past eight years she hasn’t been able to pay anything toward her student loan debt and it has nearly doubled to $126,000.
Many Americans choose to go back to school with the ultimate goal of improving their income, but many find the opposite has occurred. For some, the job isn’t there when they graduate, for others there isn’t an immediate promotion and bump in pay. With many older Americans already shouldering the burden of some debt for their children’s education, absorbing the added expense of their own student loan debt is difficult if not impossible.
“I find it very ironic that I incurred this debt as a way to improve my life, and yet I still sit here today because the debt has become my undoing,” Anderson said in testimony prepared for the hearing.
Student Debt by the Numbers
According to a report issued by the committee, the amount that older Americans currently owe in outstanding federal student loans is staggering: with more than $18 billion owed last year, there has been a six-fold increase from the $2.8 billion owed in 2005.
While it’s true that American seniors only account for a small fraction of student loan debt holders, the number of seniors facing student loan debt between 2004 and 2010 quadrupled to 706,000 households. Roughly 80 percent of the student loan debt held by retirement-aged Americans was for their own education, while only 20 percent of loans taken out went to help finance a child or dependent’s education, the report said.
According to the Brookings Institute – which compiled data from 1989 to 2010 – roughly one-quarter of the increase in student loan debt since 1989 can be directly attributed to Americans obtaining more education, especially graduate degrees. The average debt levels of borrowers with a graduate degree more than quadrupled, from just under $10,000 to more than $40,000.
Yet the Brookings report also found that the burden to households that have accumulated student debt may be overstated. It concluded that the increases in the average lifetime incomes of college-educated Americans have more than kept pace with increases in debt loads. Between 1992 and 2010, the average household with student debt saw an increase of about $7,400 in annual income and $18,000 in total debt. In other words, the increase in earnings received over the course of 2.4 years would pay for the increase in debt incurred.
The authors of the Brookings report are looking at the macro picture. For people like Rosemary Anderson, it offers little solace.