While people ages 25 to 49 hold the majority of student loan debt, loans among seniors 65 and older rose more than 500% from 2005 to 2013 ($2.8 billion to $18 billion) according to a recent report from the United States Government Accountability Office. While the majority of senior debt (80%) was taken out to fund their own college education, 20% of the loans were taken out on behalf of a child or dependent. These seniors are digging deep into their Social Security benefits and savings, leaving some retirees with income below the poverty threshold.
Student loan debt is impacting people from the ages of 18 to more than 65, with nearly 19% of borrowers owing more than $50,000, up from only 6% in 2001. The Federal Reserve also recently disclosed that student loans now exceed credit cards and auto loans as the highest source of U.S. debt. According to Experian, 40 million Americans now have at least one student loan (with the average borrower carrying about four loans), which is a dramatic increase from the 29 million consumers in 2008. Student loans debt in the U.S. was at an all-time record of more than $1 trillion in September 2014, an 84% jump since 2008.
- Student loans now exceed credit cards and auto loans as the highest source of U.S. debt.
- Loans among seniors 65 and older rose more than 500% from 2005 to 2013 ($2.8 billion to $18 billion).
- Nearly 19% of borrowers owe more than $50,000 in outstanding student loans.
- 40 million Americans have at least one student loan, up sharply from 29 million in 2008.
The opinions expressed are those of our investment professionals, and are no guarantee of the future performance of any American Century Investments® portfolio. This information is not intended to serve as investment advice; it is for educational purposes only.