When we think about student loan debt, our minds automatically think about millennials. The reality is, it’s not just young adults struggling to pay back their loans. A large number of senior citizens are also fighting with their loans during a time when they should be enjoying retirement. As you can imagine, this debt makes life difficult for all.
The Wall Street Journal released a new report about senior citizens and their student loan debt. This age group owes more than $86 billion! It’s a small chunk of change when compared to the $1.53 trillion of total debt. Yet, we wouldn’t expect seniors to still owe that much and it contributes to the total.
It would appear as if the last decade was tumultuous for everyone, even seniors! Their overall student loan debt grew 161% since 2010. This is the largest increase among any other age group. This type of debt is wreaking havoc on the lives of senior citizens. So, what is happening and why is it hurting the older generation?
How the Student Loan Debt Crisis Happened
After the 2008 Recession hit, Americans were suffering. Jobs were scarce. Factories were closing at a record rate. People could afford their houses or to pay the bills. More people than ever were on food stamps and receiving government assistance. This disaster also led millions of people to decide to want to do better for themselves.
Going to college and getting a degree appeared to be the only way to find a job that was recession proof. The problem is, a lot of colleges took advantage of the situation. They started putting out false advertisements about their job placement rates. That essentially guaranteed a job if you went to their school.
In order to afford the expensive classes, you had to get yourself deep into student loan debt. And at the time, it was worth it. You got a degree, a guaranteed job, and so the debt wouldn’t be a problem. Except, these students didn’t realize they were being lied to. There was no real job placement guarantee to fall back on.
Sure, a few people found some employment, but the jobs still weren’t there. Many new college graduates with a bachelor’s degree were forced to work minimum wage jobs. That’s all the work that was available to them at the time. Their degree was worthless at helping them solve the situation.
How this Impacted Senior Citizens
You wouldn’t think of too many senior citizens as the generation eager to go to college. Yet, at the time of the economic collapse, most of them were still at a working age. It’s not uncommon for an older person to desire to improve their life. Older generations tend to be passed over to make room for younger employees. That makes having a degree worthwhile.
But the main reason why they got caught up in this mess wasn’t necessarily because they went to college. It’s because they helped their children and grandchildren. They became victims of student loan debt just by co-signing loans. When their kids got caught up in the scams and couldn’t pay, the banks went after the co-signers.
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In 2015, over 40,000 senior citizens were forced to hand over Social Security checks and other benefits because the defaulted. All their money, including any tax refunds, went towards their student loan debt. This is a 362% increase in the last decade. It just goes to show how deep this crisis has become.
