That student loan debt has been bad for millennials is well documented.
But according to a new study released on Wednesday by AARP, older Americans are also increasingly borrowing money to help their children and other family members pay for college tuition, potentially threatening their financial security as they head into retirement.
“It is stunning that more families are taking on such sharply greater amounts of student debt than in the past,” said Lori Trawinski, director of banking and finance at the AARP Public Policy Institute.
Student loan debt in the U.S. has nearly doubled over the past decade, reaching a staggering $1.5 trillion in 2019, according to data from the Federal Reserve Bank of New York. Americans who are 50 and older owe about 20 percent of that total, or $289.5 billion -- a more than five-fold increase from 2004, when they owed $47.3 billion.
Most older Americans took out loans for their own education; interestingly, the percentage of borrowers over the age of 50 who defaulted on their loans is much higher than it is for young borrowers.
A large swath also took out loans, however, to pay for someone else; about 80 percent of those respondents paid for a child, compared with 6 percent who helped a spouse or partner and 8 percent who assisted a grandchild.
“For younger families, this burden impedes their ability to save for other purposes, such as for a home, their children’s education or for their own retirement,” Trawinski said. “For older families, long-term financial security can be threatened by this burden.”
The study was conducted online in 2017 and includes a sample of 3,319 adults who are 40 or older. It has a margin of error of 2.2 percent.