As a new crop of grads leaves college, the struggles of student loan debt can take center stage.
Student loan debt is typically viewed as an issue facing younger Americans, but new research finds that the struggles aren’t limited to Americans in their 20s.
Millions of older Americans have made costly decisions about student loans that could impede their retirement plans.
The new analysis shows a burden on some Americans over age 55 that could clash with retirement security.
“It’s not what you usually think that they took out student debt for their children. It’s actually for themselves,” said Teresa Ghilarducci a professor of Economics at The New School.
Student loans have often been described as “good debt” with borrowers taking on loans in the hopes higher education will boost income over time.
But a new analysis by the Schwartz Center for Economic Policy Analysis at The New School finds more than 2.2 million Americans over age 55 carrying student loan debt.
Ghilarducci specializes in retirement and older worker issues.
“It’s only good debt for the young and it’s only good debt if it’s a low amount of debt,” Ghilarducci said.
Older borrowers tend to see income narrow at retirement age and are more likely to carry other debts like mortgages and car loans, than younger workers.
Karthik Manickam, author of The New School report, said that can lead to tough choices
Karthik Manickam/Schwartz Center for Economic Policy Analysis Research Associate:
“It’s likely to affect their retirement ability because they have to either sort of decide between extending their working life and continue to work to repay their debt or reduce the amount of retirement savings that they may be able to save,” Manickam said.
Another potential consequence that could diminish retirement income, Manickam said, is delinquent *federal* student loans, which can result in garnishment of Social Security benefits.