Your Student Loans Can Follow You Into Retirement -- and Poverty
Student debt isn't just for your 20s anymore. With more than $1.3 trillion dollars in outstanding student loan debt in the United States, more and more students are taking decades to pay off their loans.
Some student borrowers, according to the New York Times, are saddled with debt well into retirement. And almost 40 percent of those retirement-age student debtors see a portion of their Social Security checks garnished for student loan payments, even when those payments push them into poverty.
But We Don't Need to Tell You About Loans
J.D.s know a thing or two about debt. Law school is expensive -- very expensive -- and most law students pay for their degree by taking out loans, often well over $100,000 in loans.
The average indebtedness of 2015 loan-taking law school graduates from Arizona State, for example, was a relatively low $106,426. At Georgetown, it was $160,606.
With interest rates of over 6 percent, those aren't the kind of debts that you get rid of easily. Even grads who land high-paying BigLaw jobs spend years paying down their loans. Hell, even Barack Obama didn't pay off his loans until just two years before becoming President.
Then there are those who are patiently waiting for their loans simply to go away -- after 10 years of payments for public interest workers, 20 to 25 for the rest -- and hoping to survive the tax consequences.
Think You've Got It Bad?
But hey, at least most J.D.s will retire student-debt free. Most students enter law school at around 23 or 24 years old, so even if they take 20 years for their loans to be repaid, those loans will be gone before they're 60.
But for many others, that's not the case. Americans age 60 and older are the fastest growing group of student debtors, according to the Times. These aren't just grandparents going back to school either. Some are borrowing or co-signing on behalf of their children and grandchildren.
When those older debtors come to retirement age, the government can seize their federal loan payments directly from their Social Security check. According to a report by the Government Accountability Office, 20,000 Americans had their Social Security checks reduced to below the poverty line because of student loans.
Sounds bad, right? Because it is. But if you find yourself drowning in student loan debt, at 27 or 65, there are some ways to get help. You can work towards loan forgiveness or set up an income-based payment plan, for your federal loans at least. These programs aren't perfect solutions, but they can make your payments much more manageable, and they apply to debtors of any age.
Related Resources:
- Student Loan Forgiveness Can Come With a Tax Bomb (CNBC)
- Top 5 Tips for Dealing With Your Law School Student Loans (FindLaw's Greedy Associates)
- Defaulting on a Student Loan Can Cost You Your Law License (FindLaw's Greedy Associates)
- How Will Trump Impact Your Law School Student Loans? (FindLaw's Greedy Associates)