More older Americans than ever are struggling with student debt

Watch Video | Listen to the Audio


This is part of an ongoing series of reports called ‘Chasing
the Dream,’ which reports on poverty and opportunity in
America.


By Megan Thompson and Mori Rothman


MEGAN THOMPSON: Nancy Kukay works at a community
college in Maryland, coordinating technical education programs.
She’s worked in education most of her career and loves her job.
But at 65-years-old, she had imagined retiring by now.


NANCY KUKAY: I can’t afford to retire. I could
never make the payments.


MEGAN THOMPSON: Payments for student loans she
took out for her son Andrew about a decade ago. She pays around
$500 a month on the nearly $75,000 she owes on loans she took
out, and others she co-signed with her son. By her math, she’ll
probably be paying on her loans alone for another 11 years.


NANCY KUKAY: Even if I started drawing on my
retirement and Social Security together, I still wouldn’t have
enough monthly to make those payments.


It’s certainly not where I hoped to be at this stage in life.


MEGAN THOMPSON: The number of Americans age 60
and older with student loan debt quadrupled between 2005 and 2015
to nearly 3 million. And the average amount they owe has nearly
doubled from 12-thousand dollars to almost 24-thousand.


PERSIS YU: There’s a number of factors that
contribute to why the number of older borrowers is increasing.


MEGAN THOMPSON: Attorney Persis Yu directs the
Student Loan Borrower Assistance Project at the National Consumer
Law Center in Boston.


PERSIS YU: Student loans are structured to be
paid over a very long period of time. They have no statute of
limitations, which means that they follow you. They can follow
you till you die, literally. And so there are a lot of borrowers
who are out there who still have their own student loan debts
from the ’70s, from the ’80s.


ANNETTE PELAEZ: I think originally it was, like,
27,000 dollars…


MEGAN THOMPSON: 64-year-old Annette Pelaez of
Boston is still paying about 300 dollars a month for the loan she
took out 20 years ago to pursue graduate degrees in American
Studies, a loan she expects to be paying for another 10 years.
She worked for nonprofits serving children and the elderly, but
her income never reached the level she had hoped.


ANNETTE PELAEZ: I’m making now what I made in
the ’80s. I’m making about $42,000 a year.


MEGAN THOMPSON: So when you went back to grad
school, you assumed you’d be making a lot more money than that?


ANNETTE PELAEZ: Oh, yes. Absolutely. I mean if I
was making that money with a bachelor’s degree in the ’80s, I
assumed that, you know, with a Master’s I’d do a little bit
better.


PERSIS YU: Folks with student loan debt
typically save less than folks without student loan debt. And
then, once they’re in retirement, if they are repaying loans,
certainly that is a liability that they wouldn’t otherwise have
to pay for when they’re on a fixed and limited income.


MEGAN THOMPSON: Because of her debt and the high
cost of living in Boston, Pelaez says, she has little retirement
savings. She recently retired but can’t afford to keep living in
Boston – so she moved New Mexico, where it’s cheaper to live. But
even still, her expected 1,000 dollar a month social security
check won’t cover her expenses.


ANNETTE PELAEZ: Rent will be $620 plus
utilities, and then there is the school loan, and there goes the
$1,000. So I will be doing some part-time work.


MEGAN THOMPSON: How do you feel about that? I
mean, is this what you pictured retirement being?


ANNETTE PELAEZ: Well, you know, at this point,
I’m not so terribly concerned, because I’m still young enough to
do so. What concerns me is that when I’m in my 70s or 80s,
hopefully, if I get there, I may not be able to do that.


MEGAN THOMPSON: Like Pelaez, 27 percent of older
Americans with student loans borrowed for their own education.
But most, more than 70 percent, borrowed for their children’s or
grandchildren’s education. People like Nancy Kukay. Kukay, who’s
divorced, took out about $46,000 in her name and co-signed for
around $34,000 more with her son Andrew, who graduated from the
University of South Carolina in 2008.


NANCY KUKAY: I entered into that, now as I, in
hindsight, without nearly enough information. And didn’t know
what I didn’t know about– financial aid. It’s vastly different
from when I went to school. I didn’t have to borrow to go to
school.


MEGAN THOMPSON: Kukay obtained about half of the
46-thousand dollars she borrowed for her son’s education through
a federal loan program called “Parent Plus.” The number of Parent
Plus borrowers has grown by 60 percent since 2005 to
three-and-half million Americans.


The National Consumer Law Center says some families can borrow
more than they can afford under parent plus because the program
lets them borrow as much as a college says they need without
verifying their income.


PERSIS YU: At no point is the school or the
federal government seeing if the family can afford to repay this
loan.


MEGAN THOMPSON: Is anyone along the way saying,
‘Hey, if you take out this amount of money, this is what it’s
gonna mean for you.’ Is anybody kind of giving a warning to
families?


PERSIS YU: So, you know, there is some very
minimal counseling that is required– when folks take out federal
loans. The other component is a lot of these families don’t have
a lot of other options. Because education is expensive. So a lot
of families feel trapped, and they feel like they have to take
out this, because they want to provide for their kids. And they
want their kids to have a better future.


MEGAN THOMPSON: And that’s exactly what Nancy
Kukay wanted for her son. Kukay says she wasn’t too worried about
his ability to pay off his loans once he graduated.


NANCY KUKAY: I kept telling him, and I thought
this would be true, is, “This degree will give you a career that
you can pay that off. Turns out not to be the case. He graduated
in 2008 in the depths of the Great Recession. And jobs were hard
to come by.


MEGAN THOMPSON: After graduating with a degree
in sports management, Andrew has worked steadily — even taking on
second jobs at night and on the weekends. But his earnings
haven’t been enough to keep up with the 4-and 5 hundred dollar
payments on the roughly 45-thousand dollars he took out, so
Nancy’s been paying the loans she co-signed. I spoke to Andrew
over Google Hangout.


ANDREW KUKAY: I did not think that you would be
this hard to pay student loans. I definitely went in to school
thinking I’ll get a decent paying job.


MEGAN THOMPSON: Andrew recently landed a
higher-paying job and wants to help pay the loans his mom
co-signed.


ANDREW KUKAY: I don’t want her to be suffering
for any longer than she has to just for doing the nice thing and
cosigning on a loan. Would I do it all over again? No. I would
not do it again. I would stick around and stay home for a couple
of years. And go to a community college. Near my house.


MEGAN THOMPSON: In the meantime, Nancy says, the
loan payments are weighing her down.


NANCY KUKAY: It governs everything I do, every
decision I make. It all revolves around making sure that I have
that money to make that payment every single month.


MEGAN THOMPSON: Nancy has consolidated, and has
gotten slightly lower interest rates, on some of the loans. But
she expects she’ll need to work part-time after she retires. And
she’s also considering moving to Montana, where the cost of
living is cheaper.


NANCY KUKAY: My life isn’t going to be the way
that I’d hoped that it would be. It just simply isn’t going to
be.


MEGAN THOMPSON: There’s also this catch with
federal loans, and older borrowers who can’t pay them off. The
U.S. treasury can garnish their Social Security benefits.


In fact, between 2002 and 2015, the number of Americans having
social security disability and retirements garnished because of
unpaid loans increased almost 500 percent to 173-thousand.


MANUEL ROBERTS: Who do I go and get this money
back from?


MEGAN THOMPSON: It happened to 55-year-old
Manuel Roberts of Brooklyn, New York.
He paid off most all of the 13,000 dollars he borrowed to attend
the University of Southern California in the 1980’s. But after
losing a job, he defaulted on the last three thousand dollars and
then sustained a severe head injury in 2002.


MANUEL ROBERTS: Then I was injured- street
violence. I was a victim of a violent crime. I was in a coma for
two weeks or so.


MEGAN THOMPSON: Roberts received Social Security
disability checks for 1,300 dollars every month. But the
government began deducting 200 dollars from every check for the
defaulted loan.


MANUEL ROBERTS: I was already in a bad
situation. It’s plain to see they just made it worse.


MEGAN THOMPSON: The Social Security deductions
pushed Roberts to the verge of the federal poverty line. It turns
out, there’s a program for people disabled like Roberts to get
their loans eliminated. But many people don’t know about it.


MEGAN THOMPSON: So no one ever said, ‘Hey, we
notice you’re getting disability income. You might be also
eligible for a disability discharge. This could stop.’


MANUEL ROBERTS: No, that never- that was never
brought to me by anybody.


MEGAN THOMPSON: Roberts’ attorney helped him get
the disability discharge…and is also helping him and six people
with similar stories sue the heads of the federal Department of
Education, Treasury, and the Social Security Administration-
alleging that they don’t do enough to let people know about the
Disability Discharge program.


The federal Department of Education declined an on-camera
interview with PBS NewsHour Weekend and did not respond to
written questions. The Social Security administration and
Treasury Department also did not comment.


MEGAN THOMPSON: US senators Ron Wyden of Oregon
and Sherrod Brown of Ohio are sponsoring legislation to eliminate
the practice of garnishing social security benefits for unpaid
loans… but the bill’s gone nowhere so far.


Nancy Kukay’s Social Security checks are not at risk, because she
keeps kept up with her monthly student loan payments. For other
parents trying to figure out how to pay for college now, she has
this advice.


NANCY KUKAY: I would strongly encourage them to
become educated in the– in every aspect of financial aid. Talk to
the college financial aid people. I didn’t do that. That’s a huge
mistake. I made assumptions that turned out not to be true. And
mine is a cautionary tale.


Chasing the Dream: Poverty and Opportunity in America is a
multi-platform public media initiative that provides a deeper
understanding of the impact of poverty on American society. Major
funding for this initiative is provided by The JPB Foundation.
Additional funding is provided by Ford Foundation.


The post More older Americans than ever are struggling with
student debt appeared first on PBS NewsHour.