Millions Over 50 Will Take Student Debts With Them To Hell (And Navient Will Find Them)
As a nearly-59-year-old who knows darn well my student loan debt will follow me the rest of my life (haha, I almost typed "into retirement" — as if!), I took particular interest in this Business Insider story on Americans over 50 who still have student debt. Turns out there's some 8.4 million of us, according to a March estimate by AARP, and we hold over a fifth (22 percent, or $336 billion) of Americans' $1.6 trillion in student debt. And the portion of student debt held by folks over 50 has gotten much bigger over the years: In 2004, borrowers over 50 held only 10 percent of the total.
Hmm. I turned 50 in 2012. Maybe that was me.
The AARP estimate, we'd add, reflects both the debts that older Americans are carrying for their own education as well as debts they've taken out to help their progeny with higher education. Many parents co-sign private student loans for kids, and then there's also the federal Parent Plus loan program, which seems like a terrific idea if you can afford it. Not that anyone's checking:
Parents taking out federal Parent Plus loans can borrow up to the full cost of attendance, without being subject to any underwriting designed to ensure they can afford to repay. As a result, defaults of Parent Plus loans have been increasing with the rising numbers and amounts of outstanding loans (that is, prior to the forbearance granted to borrowers during the pandemic), particularly for borrowers age 65 and older.
On top of that, the AARP research found that when it comes to private student loan debt, "a quarter of cosigners age 50 and older ended up having to make a payment because the student borrower failed to do so."
Whew. So it wasn't all just my personal debt!
Business Insider talked to several people who are technically at or nearing what we used to call retirement age, but who are also carrying student debt for their own education. None of them are likely to pay off the loans during their lifetimes, but there's little chance they'll see any relief unless Joe Biden can be persuaded to do some serious federal student loan forgiveness, as Senators Elizabeth Warren and Chuck Schumer have been calling on him to do. They argue that with an executive order, Biden could forgive $50,000 in student debt per borrower; Biden's more amenable to the nice but insufficient $10,000, which pays for part of a year at a state school.
Their stories are awfully familiar: They went to school, believing in that American Dream stuff about bettering themselves through education, but then life and the economy happened to them, and now they're all, as one of the borrowers, Linda Navarro, 70, puts it, "on a hamster wheel, and you will not get off. You know that you will never get off."
Navarro started out with a $20,000 loan in 1990, when she went to graduate school. Now she owes $145,000, but her total payback amount, on income-based repayment, will be around $212,000. Not that she's likely to get there, ever.
Mind you, the financial experts who swarm every Twitter thread about student debt will no doubt point out this is all her fault, because she made bad decisions. She served in the Navy but "didn't qualify for loan forgiveness under the GI Bill because she missed the 10-year window to use the bill's student-loan-forgiveness benefits." She also lost income while going to school, lost her home, and didn't finish that graduate degree — because those are all things that happen in people's lives, so people not in that situation can blame them and call them irresponsible.
Now, she says,
"There's a real fear in dying in this. [...] And the best part is that my family has to prove that I died so the loan will die as well."
Then there's David Wise, who's been making student loan payments over the course of 40 years, to the tune of $175,000 so far. But because he had a default in there (even while he was still making payments!), with the attendant penalties and fees and interest, he still owes more than $236,000, and has little hope of ever paying it all off. He compares his situation to "debtor's prison."
But wait, we shouldn't have any sympathy at all for him, either, because default, right? He took out about $79,000 in debt to go to law school, but then foolishly chose to help poor people in public-interest law, and that didn't pay anything, so he switched to working in food service instead of chasing the smart money in corporate law. (All his fault, all his fault, burn him.)
Wise, clearly a very bad person, doesn't see the point of continuing to push that rock up the hill:
Like many of his peers, Wise doesn't foresee his loans being paid off before he dies.
"I have no motivation whatsoever to pay anything more than I've already paid," Wise said. "I've done my duty to the student-loan program many times over."
As we noted when we wrote about Elizabeth Warren's debt forgiveness plan during the presidential campaign, student debt has very real effects on mental health. A frightening number of people think about killing themselves over their impossible student debts, and a substantial portion actually do. A study published last year on student loan debt found
Overwhelming debt prevented 80% of borrowers from saving for retirement, 56% from buying a home, 42% from buying a car, and 50% from contributing to charity, according to the report. More than 85% said student loan debt was a major source of stress, and one in three said such debt is the biggest stress in their lives.
Senator Warren was interviewed for the Business Insider piece, and she has this crazy idea that maybe America would be a better place if we didn't have so many people worried that they're going to die on the hamster wheel.
"Student debt isn't just crushing young people: 6.3 million borrowers ages 50 to 64 and nearly a million people over 65 are still paying for a loved one's education or their own," Sen. Elizabeth Warren of Massachusetts told Insider. "Student debt is also one of the biggest contributors to the rise in the amount of debt seniors hold overall."
In a CNBC op-ed she coauthored with Senate Majority Leader Chuck Schumer in February, Warren highlighted how the government would even garnish Social Security benefits to make up what is owed in student-loan payments. In 2015, she said, the government garnished the Social Security checks of almost 114,000 borrowers ages 50 and older.
She repeats her call for Biden to take that executive action to wipe out $50K in student debt per person, and points out that older Americans should be part of the discussion, because this isn't just a problem affecting youngs. Also, we should note that the loan forgiveness Warren and Schumer are calling for would affect only federal student loans, so even if that happened, people could still have a hissy about the bad choices made by those with private student loan debt.
Let's hope that happens. It would make a hell of a lot of difference to a lot of us hamsters. Not all of us have excellent political dick-joke jobs that keep us able to pay our monthly tithe to Navient.
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Doktor Zoom's real name is Marty Kelley, and he lives in the wilds of Boise, Idaho. He is not a medical doctor, but does have a real PhD in Rhetoric. You should definitely donate some money to this little mommyblog where he has finally found acceptance and cat pictures. He is on maternity leave until 2033. Here is his Twitter, also. His quest to avoid prolixity is not going so great.