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Student Loan Burden Hitting Older Americans
A new survey by education financial management company IonTuition.com shows that more than 37 percent of respondents had fallen behind on their student loan payments and 17 percent had defaulted on their student loans.
Apr. 14, 2017
The impact of student loan debt on millennials is widely discussed, but how is lingering student loan debt affecting the financial wellness of older generations?
A new survey by education financial management company IonTuition.com shows that, of 900 student loan borrowers over the age of 35 surveyed, more than 37 percent of respondents had fallen behind on their student loan payments and 17 percent had defaulted on their student loans.
The survey also found:
An Unexpected Burden for Both Gen Xers and Baby Boomers: Almost three-fourths of respondents did not expect to be repaying student loans at this stage in their lives. Among Baby Boomers, that segment jumped to 94 percent.
Financial Security More Valuable Than Health and Wellness: 54 percent of respondents feel their student loan payments are too high. 29 percent would prefer student loan repayment assistance from their employers over health care benefits. Interestingly, 60 percent reported being unable to prepare properly for retirement because of student loans, and more than a third would prefer student loan repayment assistance over 401(k) contributions.
Taking on Financial Burdens for Others: Respondents taking out and/or cosigning student loans for others are also struggling. 40 percent regularly assist with payments on cosigned education loans. Nearly half of Gen Xers and Baby Boomers who cosigned for loans are concerned that the borrower may not pay back their loans.
A Multigenerational Impact: More than 75 percent of respondents felt employer-provided student loan benefits would be helpful, highlighting the multigenerational impact of what is often considered to be a millennial-only concern.
“Businesses have a unique opportunity to help workers of all ages,” said Balaji “Raj” Rajan, CEO of IonTuition. “Employees are struggling to meet their financial goals. Student loan assistance is a benefit that helps workers meet major milestones in life, from home ownership to retirement.”