Americans in their 60s have nearly as much student loan debt as people in their 30s
- According to data from Experian, borrowers at age 30 and age 60 tend to have very similar student loan balances: the average 30 year old borrower owes $36,406, and the average 60-year-old borrower owes $35,637.
- In a separate study, Experian also found that the amount parents borrowed for their children through parent PLUS loans has increased by 38% since 2015.
- While parents borrowing for their children's education is becoming more common, it could be jeopardizing retirement for many older borrowers.
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Student loan debt is a pervasive problem in the US, but it isn't just a burden on younger generations - new data from credit reporting agency Experian shows that student loan debt is spilling over onto their retirement-aged parents.
Experian looked at a sample from its consumer credit database, and found that the average student loan balances have increased for every age level over the past year, including for borrowers in their 60s, 70s, and 80s. While 35-year-olds had the highest student loan debt balance on average, the average balances of 60-year-olds didn't fall far behind.The average student loan balance of borrowers aged 60 to 69 is up $1,700 since the second quarter of 2018, to $35,637. Compare that to 30-year-old student loan borrowers, who face an average balance of $36,406 in the second quarter of 2019.
There's a correlation that explains why so many 60-year-olds are taking on student loan debt: They're increasingly taking out loans for their children. A separate Experian study looked at data from federal student loans, and the amount borrowed by parents for children. Since 2015, the data shows that the number of parents borrowing parent PLUS loans for their children has gone up by 13%. Over the same time period, the amount borrowed has also increased by 38%.
Increasingly, parents who are nearing or at retirement age are taking on student loan debt for their children. And for a generation that's already not prepared for retirement, that's a problem.
As Business Insider's Tanza Loudenback reports, 48% of Gen Xers have less than $50,000 saved for retirement, according to data from a survey of Gen Xers conducted by Insider and Morning Consult. For most who want to retire at age 65, that amount won't meet their needs.
Supporting adult children through college and beyond is a potentially unexpected retirement expense that's become common. According to a Merrill Lynch survey, 79% of parents are still supporting their adult and college-age children while in retirement.
The high student loan balances many 60-year-olds face could delay their retirement. Even so, Experian's data shows that for an increasing number of parents, dealing with student loans for their children's college expenses in retirement is becoming a reality.
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