A particularly worrying trend is the number of seniors who continue to be sued by student loans. At the end of 2020, about 8.5 million Americans aged 50 and over owed about $ 349 billion in federal student loans, up 37% from the fourth quarter of 2017., according to Federal Student Aid. Worse yet, this debt lingers beyond their years of work.
âEvery year, thousands of seniors accumulate student loan debt until they retire, and much of it is unnecessary,â says Martin Lynch, compliance officer and director of education for the association at Cambridge Credit Counseling nonprofit in Agawam, Mass. that provides free counseling. on student loans.
If you’re having trouble repaying federal student loans, ask your loan manager if you qualify for one of the four income-based repayment plans. Payments are set as a percentage of your discretionary income, which is based on a comparison of your income and family size with the Federal Poverty Guideline. The balance can be canceled after 20 or 25 years, depending on the plan. If you work for a state, municipality, or nonprofit, you may be eligible for your remaining balance back after you’ve made 120 qualifying payments. Studentaid.gov has more information on loan forgiveness program.
While you can bundle federal student loans with a private lender for a lower rate, this will make you ineligible for federal loan cancellation and income-tested repayment programs.