Older Americans With Student Loan Debt

The front page of Yahoo is riddled with stories every day about the dramatic rise in older Americans holding college debt, either for themselves or their children. What should be getting more attention, but isn’t, are the practical student loans in bankruptcy and non-bankruptcy solutions this population can use to take control of their overwhelming student loan debt.

If you’re in, or approaching retirement, and the federal student loans you’re carrying were for your own education and you’re having a hard time making the payment on a fixed income, but the loans are still in good standing (i.e- not in default) — contact one of the Crossley Law Offices student loan lawyer specialists to learn about income-based repayment options.

Income-driven repayment plans are available to all borrowers, and there are also some new options available for older student loan holders. If you’re eligible, one of our student loan lawyer specialists will help you get your monthly student loan payment set at no more than 15 percent of your income.

Interested in seeing more, just use the U.S. Department of Education’s Repayment Estimator to explore eligibility for income-based repayment plans and possible payment amounts.

After 25 years of payments on this plan, any remaining balance is forgiven, and that is reduced to 10 years if you are currently employed in public service.  One of our student loan lawyer specialists will ensure that you are eligibility re-certified for your IBR plan each year.

There is a newer version of income-based repayment called Pay As You Earn that’s slightly more generous, but is only available for loans taken out in recent years . If you have older Federal Family Education Loans, you’re not eligible for these plans, but you can use a similar plan called income-sensitive repayment.

With income-sensitive repayment, you can choose a monthly payment amount between 4 percent and 25 percent of your monthly income but can only use the plan for five years. Another option is to consolidate your existing Federal Family Education Loans into a new federal direct consolidation loan so that you can take advantage of income-based repayment plans.

If you have Parent PLUS loans that you took out for your children, things get a little trickier but there are still options. These loans aren’t technically eligible for income-based repayment, but if they are consolidated into the Direct Loan program, they gain eligibility for income-contingent repayment. That makes three different payment plans determined by income — four if you count Pay As You Earn separately.

While most of the USA’s $1.2 trillion in student debt is held by the federal government, there’s still approximately $150 billion in non-federal private student loans. And often borrowers of private loans, regardless of age, struggle the most because private loans don’t come with all the repayment options described above.

Private loans also often require a co-signer, so many older Americans have cosigned these loans for their children and are on the hook if their child can’t repay because they haven’t been able to find employment. If you’re struggling with private student loan payments, contact one of our student loan lawyer specialists to discuss other consolidation, refinancing or modification options.

Discharging both federal and private education student loans in bankruptcy is another practical solution for many older Americans nearing retirement.