The common perception of a student loan recipient focuses on young adults either fresh out of high school or fresh out of the graduation ceremony. Both cases have one thing in common: they are going to be paying off their students loans way down the road.
A new trend with student loans is receiving attention that pertains to individuals of an even more advanced age past 60 years old. According to a study from the Government Accountability Office of the United States, student loan debt held by adults over 60 years old has risen at twice the overall growth of debt since 2005. To put this in perspective, the tally reached around $18 billion in 2013 compared to around $3 billion in 2005.
In a report from the New York Federal Reserve, the overall debt (including auto loans and mortgages) has increased by 60%. While this includes other types of loans, these loans have been relatively stable throughout the past few years, but this is not the case for student loans since they have been increasing substantially.
Possibly one of the most startling statistics from the Government Accountability Office involves the purpose of the loans. Over 80% of student loans borrowed by individuals over 65 years old are meant for their personal education, and over 70% of Individuals between the ages of 50 and 64 have students loans out for their own personal education. This means the increase in student loan debt for this age group cannot be largely attributed to co-signing for younger students.
Some analysts believe these older citizens have taken a hit from the recession in the previous decade; additionally, wages have not risen to meet a new wave of financial needs. With this in mind, senior citizens are most likely entering higher education to obtain better work opportunities and higher pay.
Reiterated once again, higher education costs have been increasing each year; consequently, student loan disbursement has increased right along with education costs. More and more loans increase the debt toll which is now over $1.4 trillion.
Now this issue can be translated across generations to the baby boomer generation. At any rate, it is clear that the student loan debacle is growing with the increasing demand for higher education.