A growing number of Americans who borrowed money for college are still repaying their debt into their 60s and 70s. Compound interest and prolonged repayment periods have trapped them in a vicious cycle, leaving them unable to escape debt even after paying several times the original principal.
The number of federal student loan borrowers aged 62 and older has recently surpassed 3 million, according to The Wall Street Journal on the 8th. That marks a 67% increase from 1.8 million in 2018, just eight years ago.
Delinquency rates among older borrowers are also climbing sharply. Living on fixed incomes after retirement while facing mounting medical costs, their capacity to repay is deteriorating rapidly. Prolonged delinquency can lead to the garnishment of Social Security benefits, tax refunds and even wages.
Chris and Carolyn McAuliffe, a couple in their 60s living in New Jersey, borrowed $114,000 (approximately 171 million won) for graduate school tuition. But as interest kept accumulating while they extended their repayment period, their loan balance has ballooned to $500,000 (approximately 750 million won).
"I regret going to college," said Chris, an engineer at an insurance company. "Starting in July, our monthly payment jumps to $3,000 (approximately 4.5 million won), which is nearly three times what it was just before the pandemic," he said in despair.
Parents who took on debt for their children's education are suffering as well. Robert Lee, 71, borrowed $66,000 (approximately 100 million won) 29 years ago to pay tuition for his two children. Even after repaying $91,000 (approximately 137 million won) so far, he still owes $51,000 (approximately 77 million won).
"My children succeeded, but I am still tied down by debt," he said, adding that he fears unexpected medical expenses. Sharon Duki, a 72-year-old social worker, has also given up her post-retirement travel plans. To repay 152 million won in student loans, she works a part-time job on top of receiving her pension.
The financial situation of American retirees is even more serious. According to the U.S. Social Security Administration, retirees receive an average monthly pension of approximately 3.1 million won, of which the average student loan payment of 600,000 won accounts for 19%. A survey found that an average of 125.6 million won in assets is needed for retirement, but actual average savings stand at only 440 million won, leaving a massive gap.
The Trump administration's new system risks making the situation worse. The overhaul, which takes effect in July, will increase monthly payments for some borrowers and require them to carry debt longer to qualify for loan forgiveness. The income-driven repayment program (SAVE), introduced by the U.S. government last year, will also end in July this year, forcing more than 7 million people to switch to higher payment plans.
The WSJ diagnosed student loans as no longer just a problem for the young but a structural flaw that upends life even after retirement. It predicted that the vicious cycle will continue, with interest and long-term repayment combining to leave borrowers unable to break free from debt even after repaying several times the original principal.
