Recent graduates are no longer the only ones saddled with student debt. Americans older than 65 currently have $18.2 billion in student debt, according to a recent report from the Government Accountability Office.

Student debt in this age group is now six times what it was in 2005. Although a small amount of households headed by those age 65 and older have student debt—just three percent—those that are in debt may owe just as much as their younger counterparts, according to the report.

“It’s partly with the aging of the baby boomers, the rising cost of college as well as people trying to better themselves. That’s where you get the growth in borrowing,” said Charles Jeszeck, the GAO’s director of education, income and workforce security.

Regardless of cause, one in four student loans belonging to a person aged 65 to 74 was in default, and for those over 75, more than half of student loans are in default. If a loan is in default, the government reduces Social Security and disability benefits to $750 per month in order to offset the debt owed, according to the report.

For those that rely on Social Security, defaulting on student loans poses a threat. Earning $750 per month would put a person below the poverty line. At a Senate hearing, when the GAO presented its data, Sen. Susan Collins (R-ME) of Maine said she would submit legislation decreasing the level of cuts so that benefits could only be reduced to the poverty line, according to a Sept. 11 Chronicle of Higher Education article.

While new legislation may help those who hold student debt after they retire, current and future students can also benefit from learning from past problems. The lack of information for students going to school remains a problem.

“For some students, I just really believe they don’t have an idea how much tuition is every semester and just the nature of Federal Loan programs,” said Chris Faricy, an assistant professor of political science at the Maxwell School.

The Syracuse University Office of Financial Aid did not respond to phone calls or emails.

Faricy said he believes that students should be presented with information on how much debt the average student has at their particular college, employment figures for graduates and average starting salary by major.

Some students say SU is among the schools that fail to communicate information that could be beneficial relating to debt and financial aid.

“I had a lot of questions. I wasn’t sure if I was going to get enough money from the school. I wasn’t sure if I was going to go private, what the split was,” said Conor Sullivan, a senior international relations and public policy dual major.

A lack of information does not just affect a student when it comes to cost and how much a student needs to take out in loans. Faricy said it is beneficial to also understand the difference between federal and private loans. Federal loans are often low interest, fixed rate loans while private loans can be high interest, variable rate loans.

“Where a lot people got into trouble is when people took out loans with private banks and an adjustable interest rate that rose over time and now they are paying a lot where a lot of the government rates are fixed,” Faricy said.

Sullivan took out money from Sallie Mae and knows that paying it back will be difficult, but said he thinks it is worth the cost.

“I think if you know what you want to do and you’re dedicated to your career path and you’re working on that career path then spending the money is a good investment,” he said.

Published on September 18, 2014 at 1:24 am

Contact Chris: cjlibona@syr.edu | @ChrisLibonati