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Attention Employers: Student Loan Debt is Not Just a Millennial Problem


Last Update: June 27, 2022

It’s all over the news. Student loan debt is growing, with the current debt totaling $1.71 trillion1.

Before student loan payments were suspended, 11.1 percent of loans were delinquent or in default2. The graduating class of 2019 took out an average of $29,900 in student loans, while their parents took out $37,200 in federal parent PLUS loans3.

Most people assume that the student loan problem is focused on millennials, the group that has had enough time out of college to get settled into a job but is still dealing with crippling debt.

Although millennials make up a large portion (32 percent4) of student loan holders, those nearing retirement also struggle with student loan debt.

Fastest Growing Segment

According to the Consumer Financial Protection Bureau5, the fastest-growing segment of the student loan market is people 60 and older.

The number of older consumers with student loan debt quadrupled between 2005 and 2015, from 700,000 to 2.8 million. Not only that, but the average student loan balance for this age group has almost doubled from $12,100 to $23,500.

Unfortunately, 40 percent of loans to borrowers over 65 are in default.

These individuals fall into one of three categories:

  • Carrying student debt from their own college experience
  • Parents who took a loan for a child’s tuition
  • Grandparents who secured a loan for a grandchild’s education

In addition to taking out federal loans, older Americans are likely to have tapped into their retirement savings, home equity, and credit cards making this problem even worse. 

Issues Arising Due to Student Loan Debt

Because they are making student loan payments, older student loan borrowers may have difficulty affording basic needs. The Consumer Financial Protection Bureau found that borrowers in this age group:

  • Skip doctor’s visits
  • Don’t fill needed prescriptions
  • Cut medication in half to save money

Additionally, those making student loan payments are less likely to have enough money saved for retirement.

The median amount of money saved in an IRA for those between 50 and 59 who did not have student loan debt was $56,000. For those with student loan debt, the median amount dropped to $31,000.

Finally, those who have student loans are also likely to have other debt, including:

  • Mortgage debt (63 percent)
  • Credit card debt (67 percent)
  • Auto loan debt (45 percent)

How Financial Wellness Can Help Your Older Employees

Although retirement is on the horizon, an employee financial wellness program can also help older employees make necessary changes before hitting retirement age – making retiring on time more feasible. A program like Enrich can help them:

  • Make a budget
  • Pay down debt (student loan and consumer)
  • Learn about student loan repayment programs based on income
  • Determine if loan consolidation is appropriate
  • Consider downsizing
  • Learn about reverse mortgages
  • Understand Social Security and how a defaulted loan affects these benefits

How Financial Wellness Can Help Middle-Aged Employees

Just as important as helping your older employees with student debt, is helping younger employees pay off their debt and avoid taking on more. A holistic financial wellness program will help them understand:

  • Student loans and how they work
  • The benefit of saving for retirement early
  • How 401k loans affect their retirement savings balance
  • Alternate ways to fund a child’s or grandchild’s education

Helping employees of all ages understand their financial situation and move to a place of financial wellness is good for employees and employers alike – it can even positively impact your business's bottom line.



1 - https://www.federalreserve.gov/releases/g19/current/default.htm 

2 - https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/hhdc_2019q3.pdf 

3 - https://studentloanhero.com/student-loan-debt-statistics/

4 - https://educationdata.org/student-loan-debt-by-generation

5 - https://files.consumerfinance.gov/f/documents/201701_cfpb_OA-Student-Loan-Snapshot.pdf



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