It may seem unlikely, but individuals over the age of 60 appear to be the fastest growing segment of student loan borrowers, according to a new report from the Consumer Financial Protection Bureau (CFPB).
The number of older student loan borrowers has quadrupled in the last decade, and the amount of debt per borrower has doubled, according to a new report that outlines concerns about servicing practices that can jeopardize these borrowers’ long-term financial security.
The new report, released on Thursday, focuses on older borrowers age 60 or older who may take out student loans for children or grandchildren. Between 2005 and 2015, according to the report, the number of borrowers in that category with one or more student loans increased from about 700,000 to 2.8 million, while the average debt per borrower spiked from $12,000 to $23,500. What’s more, older borrowers have reported problems with enrolling in income-driven repayment plans and accessing their protections as cosigners, according to the report.
“It is alarming that older Americans are the fastest growing segment of student loan borrowers,” said CFPB Director Richard Cordray, in a statement. “Many of these older Americans are helping to finance their children’s or grandchildren’s education while living on a fixed income. We are concerned that student loans are contributing to financial insecurity for many older Americans and that student loan servicing problems can add to their distress.”
Specifically, older borrowers with private and federal student loans reported that their servicers were not advising them to enroll in income-driven repayment plans when their income changes. In fact, some reported being placed in plans intended for borrowers with growing incomes, the report said. Others said their servicers were incorrectly applying their cosigner payments to other loans and were spread out over all of the primary borrower’s loans, which can result in late fees and interest charges.
In addition to the report, the CFPB released financial protection tips for older Americans that, among other things, help them identify scammers and protect their information.
Publication Date: 1/6/2017