According to the Consumer Financial Protection Bureau (CFPB), the number of student loan borrowers ages 60 and older climbed at least 20% from 2012 to 2017. Additionally, from 1995 to 2017, the amount of outstanding federal student debt increased more than sevenfold.

Taken together, these two figures suggest a disturbing trend that could mean economic hardship for millions of older Americans in the years ahead if they’re stuck with loan 澳洲幸运5官方开奖结果体彩网:repayment after retirement.

Why Older Adults Are Sadd⛄led with Student Loan Debt

The vast majority of older adults with 澳洲幸运5官方开奖结果体彩网:student loan debt didn’t take out the loans for their own higher education. A CFPB report found that 73% obtained or co-signed loans on behalf of a child or a grandchild, while just 27% said they took out loans for themselves or their spouses.

Unfortunately, co-signers of loans can find themselves in a difficult situation if the loan recipients fail to honor the agreed-upon payment schedules. By 澳洲幸运5官方开奖结果体彩网:co-signing, they have put themselves on the hook for payments, just as if the loan had been theirs alone. This can become even more difficult during their retirement years when they may be living on a fixed income.

Disad🐎vantages of Loan Repayment After Retirement

Since most student loan debt cannot be eradicated by 澳洲幸运5官方开奖结果体彩网:filing for bankruptcy protection (it is possible in some rare cases), pre-retirees (typically ages 55–65) who owe balances often face some or all of the following ramifications:

• They’re forced to work beyond the traditional retirement age: Social Security benefits and other retirement income may not be adequate to cover their living expenses plus the loan payment.
• They sacrifice retirement savings: According to a study by the Association of Young Americans (AYA) and AARP, 31% of baby boomers claim that loan debt has either hindered their retirement saving efforts or caused them to prematurely dip into their nest egg to cover the payments.
• They delay their healthcare: Also according to the AYA/AARP study, student loan debt causes approximately 9% of seniors to put off seeking medical treatment.
• They experience credit issues: According to 澳洲幸运5官方开奖结果体彩网:Credit Sesame, older adults with at least $40,000 in student debt can struggle to obtain new loans they need to finance home repairs, purchase cars, or cover other big expenses. The AYA/AARP study also found that lingering student loan debt caused 32% to put off buying homes.
• They’re unable to help their families: More than 25% of baby boomers claim student loan debt prevented them from extending a financial helping hand to loved ones in need.
• Their Social Security benefits are garnished: The American Seniors Association reports that retirees who struggle to pay back their federal student loans in a timely manner may discover that lenders can garnish up to 15% of their 澳洲幸运5官方开奖结果体彩网:Social Security benefits or part of their tax refunds.

How to Minimize Student Loan Difficulties

Fortunately, there are some constructive♏ steps you can take both before and after ♕you take out or co-sign for a student loan.

Hold Honest Discussions Before You Borrow

Before co-signing for a loan, talk with your co-borrower to determine how much you’ll need to borrow and agree on a realistic timetable for making payments. Discuss how scholarships, less expensive colleges, or other options mig𒆙ht ease their debt burden.

Prepare a Contingency Plan

Before you commit, make sure you can afford to cover the loan payments yourself if your co-borrower is unable to. If other family members offer a safety net, see i🌟f they’ll put that promise in writing, just in case they forget.

Monitor the Loan

After you borrow, be sure that the loan servicer furnishes regular statements that show the balance due, payments made, the interest rate, and the payoff date. File a complaint with the CFPB if you do not receive this information on a timely basis or if you’re unduly bombarded with harassing calls or letters because the borrower has failed to make payments.

Know Your Repayment Options

Deferment and 澳洲幸运5官方开奖结果体彩网:forbearance programs can let you temporarily stop making payments if you or the person you co-signed for experiences hard times, such as difficulty feeding your family or paying other household bills. One option, 澳洲幸运5官方开奖结果体彩网:consolidating multiple student loans, may result in one smaller payment compared to multiple larger payments.

There are also 澳洲幸运5官方开奖结果体彩网:other repayment options that might help, including Saving on a Valuable Education (SAVE), Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), and 澳洲幸运5官方开奖结果体彩网:Pay as You Earn (PAYE). Some programs forgive an existing balance after 20 years or if you pass away.

If your Social Security payments are in jeopardy of being garnished, you should know that your monthly benefit cannot sink below $750. Furthermore, the garnishment cannot occur until two years after you default on a loan, ♛giving you ample time to contact the loan servicer to modify t🐲he repayment plan.

The Bottom Line

It’s exciting to go back to school or to help out a child or grandchild pursue a higher education. However, if you or your co-signer cannot afford to make payments, then your finances can take a hit that you can’t afford to take. Instead, crunch the numbers and get everything in writing before you agree to take out a loan for you or your loved one.