A particularly disturbing trend is the number of older adults who continue to be dogged by student loans. At the end of 2020, roughly 8.5 million Americans who were at least 50 years old owed about $349 billion in federal student loans, up 37% from the fourth quarter of 2017, according to Federal Student Aid. Worse, that debt lingers past their working years.
"Every year, thousands of seniors are carrying student loan debt into retirement, and a lot of that is unnecessary," says Martin Lynch, compliance manager and director of education for the nonprofit Cambridge Credit Counseling in Agawam, Mass., which provides free counseling on student loans.
If you're struggling to repay federal student loans, ask your loan servicer if you're eligible for one of four income-driven repayment plans. Payments are set as a percentage of your discretionary income, which is based on a comparison of your income and family size to the federal poverty guideline. The remaining balance may be forgiven after 20 or 25 years, depending on the plan. If you work for a state, municipality or nonprofit, you could qualify for forgiveness of your remaining balance after making 120 qualifying payments. Studentaid.gov has more information about loan forgiveness program.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Although you could consolidate federal student loans with a private lender to get a lower rate, doing so will make you ineligible for federal loan forgiveness and income-driven repayment programs.
-
Stock Market Today: The Dow Adds 15 Points To End Its Losing StreakEquity indexes opened higher but drifted lower as markets priced in new Fed forecasts.
-
What Is a Qualified Charitable Distribution (QCD)?Tax Breaks A QCD can lower your tax bill while meeting your charitable giving goals in retirement. Here’s how.
-
457 Plan Contribution Limits for 2025Retirement plans There are higher 457 plan contribution limits for state and local government workers in 2025 than in 2024.
-
Medicare Basics: 11 Things You Need to KnowMedicare There's Medicare Part A, Part B, Part D, Medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare — and much more.
-
The Seven Worst Assets to Leave Your Kids or Grandkidsinheritance Leaving these assets to your loved ones may be more trouble than it’s worth. Here's how to avoid adding to their grief after you're gone.
-
SEP IRA Contribution Limits for 2024 and 2025SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 in 2024 and $70,000 in 2025..
-
Roth IRA Contribution Limits for 2024 and 2025Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
-
SIMPLE IRA Contribution Limits for 2024 and 2025simple IRA The SIMPLE IRA contribution limit increased by $500 for 2025. Workers at small businesses can contribute up to $16,500 or $20,000 if 50 or over and $21,750 if 60-63.
-
457 Contribution Limits for 2024
retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
-
Roth 401(k) Contribution Limits for 2025retirement plans The Roth 401(k) contribution limit for 2024 is increasing, and workers who are 50 and older can save even more.
