Retirement should be filled with plenty of carefree days, peppered with a few bucket-list-worthy adventures. Headaches, such as student loans, ideally should be long gone.

But increasingly, some retirees are wondering how they're going to pay the utilities or the rent in retirement, thanks to monthly student loan bills that add up to hundreds of dollars a month.

Ever since the Great Recession ended, student loan debt has been building among older consumers across the country, including metro Detroit.

The excitement of going to college is top of mind now as high school seniors begin receiving college acceptance letters. Once the financial aid letters arrive in January or later, it will be time for brutally honest, welcome-to-reality conversations.

A college degree can still transform lives and invigorate communities. Many families, though, are on the hook for taking on sharply more student debt than in the past to cope with the rising costs of college tuition, as well as room and board.

And the threat to one's financial security is real.

College student loans: Debt hits a new high in 2018, though growth slows, as free tuition plans spread

FAFSA: Ask any college student. The federal student aid application is needlessly complex.

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Retirees owe $30,000 or more in student loans

Student loan debt isn't something you'd typically think about needing to pay in your 50s or 60s. In some cases, though, retirees now owe as much for a student loan as they would for a typical new car loan.

On average, student loan borrowers in their 60s in the Detroit metropolitan area owed $33,276 in 2017, up nearly 46% from 2010, according to an analysis of TransUnion's consumer credit database. The average was $22,843 in 2010.

Nationwide, student loan borrowers in their 60s owed $33,811.

Retirees are the fastest growing group of student loan borrowers across the nation. In some cases, people went back to school during the Great Recession or after to qualify for new jobs. In many other cases, older borrowers took on student loans to help their children.

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Over the last decade, the average debt at graduation has increased by 21% for bachelor’s degree recipients, according to Mark Kantrowitz, publisher and vice president of research for Savingforcollege.com.

The average debt at graduation has gone up by 53% for parents in the past decade, he said.

"Parent debt has increased because students in bachelor's degree programs are running up against the federal student loan limits," Kantrowitz said.

"For a dependent undergraduate student, the aggregate limit for Federal Direct Stafford loans is $31,000 and the sum of the first four years of annual limits is $27,000."

"As more students hit these limits, it shifts further borrowing to parent and private loans," he said.

What makes things tough for older borrowers is that they're nearing the end of their highest paying years on the job. Soon they may be working part-time or living on their retirement savings. And they already may be juggling mortgage debt, credit card debt and auto loans. Another bill later in life may not fit into a tight budget.

One strategy for older borrowers may be to only borrow as much in student loans as they can afford to pay off before they reach retirement age — recognizing that there often is no new income in retirement to repay the debt, Kantrowitz said.

While many parents do pay off their student loan debt, older borrowers who are struggling tend to have been delinquent or in default or in an income-driven repayment plan — which all cause interest to accrue, he said.

Another strategy: Hope the debt will outlive you.

Kantrowitz said older borrowers may want to reduce their loan payments as low as possible by stretching out the loan term. That way, the student debt has less impact on your ability to pay your regular bills.

The reason? Federal education loans, including Parent PLUS loans, will be discharged upon the death of the borrower. The move could be tax free, depending on when you die. The discharged debt is not charged against the borrower's estate.

Under the Tax Cuts and Jobs Act of 2017, the amount of student loan debt that's cancelled due to death and disability would not be taxed if the debt was cancelled from 2018 through 2025. Unless Congress acts to extend this provision or make it permanent, it will once again be treated as taxable income starting in 2026.

Student loan discharge in the case of disabilities is more complicated but it is possible.

Student loan debt isn't getting paid off quickly in some families.

Borrowers age 60 and older owed more than $86.3 billion in student loans in 2017 — up 161% from 2010, according to an analysis of TransUnion's consumer credit database.

People ages 50 and older owed 20% — or $289.5 billion — of outstanding student loan debt at the end of 2018. That's more than a five-fold increase from $47.3 billion owed by those 50 and older in 2004, according to a report from the AARP Public Policy Institute.

"These loans are really impacting an individual's ability to have security in retirement," said Lori Parham, state director for AARP Maine, which has been active in seeking legislation at the state level to protect student loan borrowers from abusive loan-collection practices and other issues.

"You see this student loan issue adding to an already dire situation when it comes to saving for retirement."

The AARP views student loan debt as a looming threat that can hurt a young consumer's ability to buy a home or save for their children's education, and can hurt one's financial health in retirement.

The issue is not just how much college debt is out there — 45 million Americans collectively owe more than $1.6 trillion in student loan debt. But consumer watchdogs warn that debt has been allowed to build in a system filled with predatory practices and bad actors.

Digging out of debt seems impossible

"I'm never going to get this paid off — and they're never going to give me a break on this thing," said Sharon Stanford, 68, who lives in Southfield.

Stanford owes more than $68,000 for federal student loans, including all the interest that has accumulated over many years.

The grandmother isn't sure how much she initially borrowed for college for her daughter but she maintains it was nothing close to $68,000.

"I started paying in 2006 — six months after she graduated," Stanford said. "I look at this and it's all interest. The balance never goes down."

Stanford retired in 2002 as a social work supervisor for the State of Michigan. She held a few jobs after that but is no longer working.

She took out student loans to cover her daughter's college education at Howard University. She was able to pay most of the first two years out of a college savings fund but then turned to Parent PLUS loans.

Stanford says she has no regrets when it comes to helping her daughter.

She recalls the painful experience of spending 11 years to get her own bachelor's degree in sociology from Wayne State University, working off and on. She didn't want her daughter to face the same kind of headaches.

"I told her that the first four years are on me," she said, sitting in her modest apartment in Southfield.

Of course, she said, her daughter picked the most expensive black college on her list.

Stanford saw her daughter's enthusiasm for Howard and rationalized that sending her to college in Washington, D.C., seemed a much better option than seeing her move even further away to college in Texas or Florida.

Sharon Stanford, 68, of Southfield reviews the terms of four student loans that she took out for her daughter who graduated from Howard University in 2006. She currently owes more than $68,000 as interest has built over time.

"It was bad enough that my only child was leaving me," she said.

She's extremely proud of her daughter April Wallace, who is 36, married and has a job with the American Heart Association. Stanford loves traveling to Bowie, Maryland, to visit the family and her 2½-year-old grandson Austin.

It's the student loan debt — and the system — that has her in an uproar.

She was able to defer payments while her daughter was in college but interest built up. And she's still unsure how best to handle that debt.

Stanford consolidated four federal student loans to try to keep better track of things and qualify for an income-driven repayment plan. Currently, Parent PLUS borrowers must first consolidate federal loans to qualify for income-driven plans.

She applied for an income-based repayment plan to lower her payment to $171.50 a month. She had been paying around $250 a month, she said.

But a few months ago, she became distraught when she saw that her payments could shoot up to $736.87 a month in July 2020 because she didn't know that you need to reapply every year for income-driven repayment plans.

"And my rent is $790 — come on, people," she said.

She blames a system where she never received a payment history or good advice at any point along the way.

"Nobody explains anything to you," she said.

Angry, frustrated and defiant, she recently decided only to pay $100 a month, figuring, what difference does it make?

"I'm going to send them a little something every month," she said.

It will make a difference, though, as she risks seeing her federal income tax refund garnished, as well as a portion of her Social Security check.

"If she pays less than what is due — less than the $171.50 — she'll be in default, even though she's paying something," Kantrowitz said.

"Then the government can garnish up to 15% of her Social Security retirement benefit payment."

Someone with an average Social Security check of $1,475 a month, for example, would risk losing up to $221.25 a month in benefits.

Risks remain for those who seriously fall behind

Being severely delinquent or in default on a student loan hurts your credit. And you can face garnishment of wages, Social Security, or other federal payments; withholding of federal income tax refunds; and possible collection fees of up to approximately 25% of total principal and interest — all while interest continues to accrue.

Many borrowers age 50 and older who default on federal student loans have seen up to 15% of their Social Security benefit payment withheld, according to a U.S. Government Accountability Office report.

Older borrowers could end up losing around $140 a month as part of this offset, according to the GAO, based on data for fiscal 2015.

The analysis concluded that about 43% of those borrowers who were subject to the offset for the first time had held their student loans for 20 years or more.

"Compared to younger borrowers, borrowers age 50 and older have considerably higher rates of default on federal student loans," the report stated.

"For those who are in default on their student loans, this debt is generally not dischargeable in bankruptcy, and their Social Security benefits may be reduced to repay this debt."

The AARP maintains that "under no circumstances should the critical lifeline of Social Security be threatened to collect on student loan debt."

Retirees, of course, face some of the same hurdles that other borrowers face when trying to pick a good repayment strategy. Many do not understand the complex set of rules involved with income-driven repayment plans that could reduce their monthly payments to better fit their current budgets.

Not knowing the rules proves costly

Student loan debt builds significantly when interest is added to the principal owed and the interest begins accruing interest itself.

If you don't apply for certification every year on a repayment plan, you're playing with fire. When the loan size goes up, your monthly payment would go up, potentially leading to delinquency and default.

U.S. Department of Education data from 2013 and 2014 show that more than half of borrowers in income-driven plans did not recertify in time to stay in such plans.

Borrowers with income-driven repayment plans could benefit from new legislation which was signed into law on Dec. 19 by President Donald Trump.

The main focus of the bipartisan bill is to permanently provide more than $250 million a year to the nation's historically black colleges and universities and other colleges that serve large shares of minority students. The bill restores $255 million in annual funding that lapsed Sept. 30 after Congress failed to renew it.

In addition, the compromise legislation will simplify the Free Application for Federal Student Aid, or FAFSA, the form that college students fill out to determine their eligibility for financial aid. And the new law streamlines the process for income-driven repayment plans.

The FUTURE Act includes important provisions for the sharing of data between the Internal Revenue Service and the U.S. Department of Education. Borrowers who have federal student loans would have to give their initial consent for the data to be shared but under the new rules, they would no longer complete forms year after year.

Borrowers could opt out of the new automatic process if they wish and provide income verification in another way.

Sarah Sattelmeyer, manager of Pew’s project on student borrower success, said the data sharing provision “will be a great help to the roughly 8 million borrowers enrolled in income-driven repayment plans, as well as those who seek to enroll in IDR in the future.”

She noted that the Pew Charitable Trusts found that a staggering 1 in 4 student loan borrowers defaulted in the first five years of repayment.

"By tearing down a significant barrier facing those who try to access, or remain in, income-driven repayment plans, this legislation should reduce the number of Americans who struggle with loan payments," she said in a statement.

The timeline is unclear, experts said, for when the process would change.

Many times, of course, the conversation about student debt focuses on the students who borrowed the money, not their parents. Yet parents bring a great deal to the table to fund the higher costs of colleges.

Parents in 22% of families borrowed money to pay for college education, according to Sallie Mae statistics sited in the the AARP Public Policy Institute's report titled "The Student Debt Threat: An Intergenerational Problem."

Out of that group 13% took out Parent PLUS loans, which are offered by the federal government directly to parents or guardians, 9% took out private student loans, 8% used credit cards and 4% took out a loan through a retirement account.

Many parents and grandparents and other relatives are on the hook for student loan debt when they co-sign private student loans for students who cannot qualify on their own. Co-signers are responsible for making loan payments when the borrower fails to do so.

"The issue around the dramatic rise in student debt by older Americans is a critical component of the student debt crisis," said Seth Frotman, the executive director of the Student Borrower Protection Center.

Frotman says blaming the Parent PLUS loan — now at a fixed rate of 7.08% for loans issued for the 2019-20 school year — misses the bigger picture: a broken system with skyrocketing costs and families left with no option but to take on huge amounts of debt to access opportunity.

The rates for Parent PLUS loans are higher than the Stafford student loans, now at 4.53%, for loans issued for the current school year.

While the Parent PLUS loans have higher rates than other student loans, as well as costly origination fees, they also help bridge the gap when college students need access to more loans than they can get on their own. Frotman warns that the alternative — private loan products — can be predatory, even more expensive, or difficult to obtain.

Frotman was the assistant director and student loan ombudsman for the Consumer Financial Protection Bureau, where he led a government-wide effort to develop consumer-driven policy reforms and protect millions of Americans with student debt.

The student loan watchdog resigned in September 2018 and stepped down from the Trump administration, saying the bureau had abandoned consumers. "Student loan borrowers are trapped in a broken system," he said then.

He has been traveling to various states to support bills that would provide better borrower protections from illegal and harmful practices by private student loan servicers, which handle the payment of federal student loans.

Frotman said borrowers are up against servicers who steer them into forbearance despite asking for an income-driven repayment plan — and as a result, the borrower ends up accruing thousands of dollars in capitalized interest as well.

Or borrowers see their loans transferred to a new servicer who may not provide the necessary information to access the account.

One borrower in Maine, he said in testimony before a legislative committee there, was trying to pay down her loans ahead of schedule. "But her servicer lowered her monthly payment and extended her loan term without her knowledge or permission," he said. "As a result, she spent months paying more interest on her loans than necessary, increasing the overall cost of her loan."

He stressed that the student loan servicing industry has failed every type of borrower at some level.

"We see student loan servicers force older borrowers into years of unexpected debt — denying parents and grandparents a promised 'way out' after they had been required to co-sign for student loans that imperiled their retirement security," he said.

To be sure, far more younger consumers have student loan debt than retirees.

The Class of 2018 racked up an average of $29,200 in college loans to obtain bachelor's degrees — a record in the United States, according to the latest report by the Institute for College Access & Success. The average in Michigan was even higher at $32,158, where 59% of graduates carry some college debt along with that diploma. File photo taken at Michigan State University's Fall 2019 Commencement at the Breslin Center on Dec. 14.

Right now, many consumers are fairly optimistic and confident about their job prospects and finances. Many feel like they can handle the debt — and as of now, many can, said Matt Komos, vice president of financial services, research and consulting for TransUnion.

More: Who's dealing with the biggest student loan payments?

More: Black women bear largest burden in student debt crisis

More: How one student loan strategy drives you deeper in debt

More: College grads average $32,158 in debt in Michigan. Here's what some didn't know

But as companies cut back — or people get closer to retirement age — they may not feel as confident.

Many people, of course, haven't saved up enough to cover most of their everyday bills in retirement, let alone adding on a student loan payment.

Contact Susan Tompor at 313-222-8876 or stompor@freepress.com. Follow her on Twitter @tompor. Read more on business and sign up for our business newsletter.

This article originally appeared on Detroit Free Press: Retirees owe $30,000 or more in student loans