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[LEARNING CURVE] Student loan debt harms financial security for older workers

A recent report from the New School's Schwartz Center for Economic Policy Analysis found that older workers and those who are unemployed are concerned that their student loans will hinder their ability to retire comfortably. Of those who have taken out student loans for college degrees, nearly 5% between ages 55 and 64 and more than 17%  of those 65 and older have not completed their degrees, which means they are not only in debt, but also lack the enhanced earnings to repay what they borrowed.

People normally think of student debt as a problem facing younger workers; however, millions of older debtors ages 55 and up have student loans that make it more difficult to save for retirement, according to the report. Less savings makes older people more likely to need public assistance. Older debtors are unable to benefit as much from returns on education and need policy interventions to help reduce their debt obligations in order to save for retirement or choose to retire, according to the report author, economist Karthik Manickam.

Among the findings:

  • 2.2 million people over the age of 55 have outstanding student loans.
  • Workers ages 55 and up in middle-income brackets comprise the highest proportion of all student loan borrowers (43%).
  • Over 14% of older debtors also haven’t completed their degree and thus fail to get the increased pay expected for workers who have managed to complete their degrees.
  • Policy interventions can mitigate these impacts by forgiving student debt, making debt repayment easier, and by preventing the garnishing of Social Security benefits to repay student loans.

To read the full report, click here


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