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Millions of older Americans still grapple with student loan debt, hindering retirement
Graduating with student loan debt is an all too common reality for new college degree holders beginning their careers. But there’s another, often overlooked cohort of debtors facing their own set of challenges: Americans over the age of 55 approaching their retirement years.
About 2.2 million people over the age of 55 have outstanding student loans, according to data from the Federal Reserve Board’s 2022 Survey of Consumer Finance (SCF). These older workers and unemployed people, who at a late stage in their lives still find themselves with outstanding debt, say the loans they took out years earlier could hinder their ability to retire comfortably, according to a new report on the effects of student loan debt on retirement and financial security for older workers.
The report comes as Americans increasingly question the value of a college degree, with a new Pew Research Center survey showing that only about 1 in 4 Americans believe a bachelor’s degree is necessary to land a good job.
Of all student loan borrowers over the age of 55, 43% are considered middle-income. Half of debtors aged 55 and over, who are still working, are in the bottom half of income earners, making under $54,600 a year, according to 2022 SCF data analyzed by researchers behind the report.
The latter’s relatively small incomes mean they sharply feel the effects of putting a portion of their salary toward paying off student loans, making it hard for them to retire and save for retirement.
Representation versus reality
Borrowing money for school and earning a bachelor’s degree or higher can help younger workers access job opportunities that are higher-paying and provide more upward mobility than those that don’t require a degree.
For younger workers, student loans can even be considered “good debt” taken on to invest in an education that will lead to returns down the road.
The picture’s not as rosy for older workers though, who don’t have a long employment runway ahead of them.
Some older student debtors didn’t even complete or obtain the degree for which they initially took out loans, putting them in a particularly precarious financial position. Not only must they make repayments on the loans, but they must do so without having benefited from what is known as the “sheepskin effect,” which is the advantages a college degree confers on job seekers.
Nearly 5% of workers between 55 and 64, and more than 17% of workers 65 and older, have not completed the degrees for which they’d taken out loans, according to the report. These older workers are both in debt and lack enhanced earning power.
Policy interventions like debt forgiveness, making debt repayment easier, or preventing the garnishing of Social Security benefits to repay student loans, can mitigate these impacts, the report’s authors argue.
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Sen. Thom Tillis says “the scope” of Helene damage in North Carolina “is more like Katrina”
As recovery missions and repairs continue in North Carolina more than a week after Hurricane Helene carved a path of devastation through the western part of the state, the state’s Republican Sen. Thom Tillis called for more resources to bolster the relief effort and likened the damage to Hurricane Katrina’s mark on Louisiana in 2005.
“This is unlike anything that we’ve seen in this state,” Tillis told CBS News’ Margaret Brennan on “Face the Nation with Margaret Brennan” on Sunday morning. “We need increased attention. We need to continue to increase the surge of federal resources.”
Hurricane Helene ripped through the Southeast U.S. after making landfall in Florida on Sept. 26 as a powerful Category 4 storm. Helene brought heavy rain and catastrophic flooding to communities across multiple states, including Georgia, South Carolina, Tennessee and Virginia, with North Carolina bearing the brunt of the destruction. Officials previously said hundreds of roads in western North Carolina were washed out and inaccessible after the storm, hampering rescue operations, and several highways were blocked by mudslides.
Tillis said Sunday that most roads in the region likely remained closed due to flooding and debris. Water, electricity and other essential services still have not been fully restored.
“The scope of this storm is more like Katrina,” he said. “It may look like a flood to the outside observer, but again, this is a landmass roughly the size of the state of Massachusetts, with damage distributed throughout. We have to get maximum resources on the ground immediately to finish rescue operations.”
Hurricane Katrina left more than 1,000 people dead after it slammed into Louisiana’s Gulf Coast in August 2005, flooding neighborhoods and destroying infrastructure in and around New Orleans as well as in parts of the surrounding region. It was the deadliest hurricane to hit the mainland U.S. in the last 50 years, and the costliest storm on record.
The death toll from Hurricane Helene is at least 229, CBS News has confirmed, with at least 116 of those deaths reported in North Carolina alone. Officials have said they expect the death toll to continue to rise as recovery efforts were ongoing, and a spokesperson for the police department in Asheville told CBS News Friday their officers were “actively working 75 cases of missing persons.”
On Saturday, the U.S. Department of Transportation released $100 million in emergency funds for North Carolina to rebuild the roads and bridges damaged by the hurricane.
“We are providing this initial round of funding so there’s no delay getting roads repaired and reopened, and re-establishing critical routes,” U.S. Transportation Secretary Pete Buttigieg said in a statement. “The Biden-Harris administration will be with North Carolina every step of the way, and today’s emergency funding to help get transportation networks back up and running safely will be followed by additional federal resources.”
President Biden previously announced that the federal government would cover “100%” of costs for debris removal and emergency protective measures in North Carolina for six months.
With North Carolina leaders working with a number of relief agencies to deal with the aftermath of the storm, Tillis urged federal officials to ramp up the resources being funneled into the state’s hardest-hit areas. The senator also addressed a surge in conspiracy theories and misinformation about the Biden Administration’s disaster response, which have been fueled by Republican political figures like former President Donald Trump.
Trump falsely claimed that Mr. Biden and Vice President Kamala Harris, his Democratic opponent in the November presidential election, were diverting funds from Federal Emergency Management Agency that would support the relief effort in North Carolina toward initiatives for immigrants. He also said baselessly that the administration and North Carolina Gov. Roy Cooper, a Democrat, were withholding funds because many communities that were hit hardest are predominantly Republican. Elon Musk has shared false claims about FEMA, too.
“Many of these observations are not even from people on the ground,” Tillis said of those claims. “I believe that we have to stay focused on rescue operations, recovery operations, clearing operations, and we don’t need any of these distractions on the ground. It’s at the expense of the hard-working first responders and people that are just trying to recover their lives.”
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