Student Loan Borrowing Causes Financial Burden for Older Borrowers

Student loans are the market’s second largest consumer debt market.  Unfortunately, the largest increase in borrowers is individuals over the age of 60.  According to a Consumer Financial Protection Bureau report, “From 2005 to 2015, the number of Americans age 60 or older with one or more student loans quadrupled from about 700,000 to 2.8 million.”  According to the same report, the amount of money owed on the loans doubled.

Geraci Law has seen firsthand how student loan debt affects the elderly.  Clients who cosigned on parent plus loans are filing bankruptcy.  The reason?  Their children or grandchildren are either not working or not making enough to pay the student loan debt.  Since the loans taken out are private, options available with federal loans are not available.

Whom does the lender go after?  Not the student.  Instead, the lender go after mom and dad (or grandma and grandpa) to pay back the loan.  Mom and dad, who are now retired and on a fixed income, start to use credit cards for living expenses and end up with $10,000 in unsecured creditors.  Few programs can help with student loans.  The existing programs can be either too complex, time consuming or lenders refuse to follow fair practices.

The Consumer Financial Protection Bureau reports older consumers are complaining about problems from private and federal student loans.  The complaints include: delaying or prohibiting enrollment in income driven plan payment, incorrectly applying cosigner payments to other loans owed by the primary borrower, failing to provided borrowers’ access to loan information, or threatening to offset private student loan borrowers’ federally protected benefits.  So, what do you do?

The good news, Geraci Law can handle the $10,000 in unsecured creditors.  The student loan debt is almost always non-dischargeable, meaning the debt will survive the bankruptcy.  However, when you file a bankruptcy case with Geraci Law L.L.C. we go through your income and expenses and discuss your options for financial success.