The Aging Student Debtors of America

On a warm October evening, in 1932, Franklin Delano Roosevelt stood in a baseball field in Pittsburgh, delivering an impassioned speech about passion’s improbable subject: the federal budget. “Sometime, somewhere in this campaign, I have got to talk dollars and cents, and it’s a terrible thing to ask you people to listen for forty-five minutes to the story of the federal budget, but I am going to ask you do it,” he told the crowd. In the back of the park, a two-year-old Black girl named Betty Ann sat on the shoulders of her father, Robert, as he strained to point out the man he was sure would become President. Robert was a dyed-in-the-wool Republican—his grandfather, an enslaved man from Virginia, had been emancipated by President Abraham Lincoln. Still, he felt compelled by F.D.R.’s message. Hard times had meant he had started to pay the reporters of Pittsburgh’s Black newspaper, which he ran, out of his own pocket. Much to his distress, his wife had taken to standing in relief lines in order to feed Betty Ann and her sisters. A few weeks later, when Robert cast his ballot for F.D.R., he wept, aghast to vote against the party of Lincoln. Thereafter, he became a devoted Democrat and jumped into local politics with fervor until he fell ill, five years later. He had two dying wishes: for his wife to take over his role as a Democratic ward chairperson, and for Betty Ann and her sisters to go to college.

The family made good on both: as ward chairwoman, Robert’s wife maintained the family home as a community backbone, and Betty Ann, who asked that she and her family members be identified by first name only, grew up with a steady stream of neighbors flowing through the house. Although her mother had no money, Betty Ann was a strong student and earned enough scholarships to receive a bachelor’s and master’s degree in education. In the next few decades, she worked as a public-school teacher in Pittsburgh and Harlem, in addition to raising two children as a single mother. But she grew increasingly frustrated by the marks of educational inequity—moldy lunches, low-grade reading materials—that plagued her classrooms. “I thought the only way that I could change things was to have a higher degree,” she told me.

In 1983, at the age of fifty-two, Betty Ann enrolled in New York University’s law school. As a middle-aged Black woman, she wasn’t exactly the typical N.Y.U. law student. Her white male classmates would slyly elbow her books off the long library tables, and once, while standing at her locker, a classmate waved a ten-thousand-dollar tuition check, signed by his father, in her face. Betty Ann had borrowed twenty-nine thousand dollars in federal loans. Today, she owes $329,309.69 in student debt. She is ninety-one years old.

Americans aged sixty-two and older are the fastest-growing demographic of student borrowers. Of the forty-five million Americans who hold student debt, one in five are over fifty years old. Between 2004 and 2018, student-loan balances for borrowers over fifty increased by five hundred and twelve per cent. Perhaps because policymakers have considered student debt as the burden of upwardly mobile young people, inaction has seemed a reasonable response, as if time itself will solve the problem. But, in an era of declining wages and rising debt, Americans are not aging out of their student loans—they are aging into them.

Credit supposes that which we cannot afford today will be able to be paid back by tomorrow’s wealthier self—a self who is wealthier because of riches leveraged by these debts. Perhaps no form of credit better embodies the myth of a future, richer self than student loans. Under the vision of the free-market economist Milton Friedman, student loans emerged in the nineteen-fifties as an outgrowth of “human capital” theory, which posits the self as, above all, a unit of investment. Lending money for people to be educated was not only a sound investment—borrowers were sure to get high-paying jobs that would allow them to repay the loan—but smart macroeconomics: more educated people would increase the nation’s G.D.P. Education would be an incidental benefit.

But the surge of aging debtors calls into question the premise of education for human capital. Eroding union density, declining wages, and skyrocketing tuition have all made college less a path to high-paying jobs than an escape hatch from the worst-paying ones. Those who have taken on debt are increasingly unable to pay it off; many haven’t even received diplomas. The student-debt crisis is particularly dire for Black borrowers. Racial wealth gaps mean that Black debtors borrow more to attend college and carry balances for a longer time, effectively paying more for the same degree than their white classmates. Four years after graduating, nearly half of Black graduates owe more on their loans than their initial balance, compared with just seventeen per cent of white graduates. As a researcher and organizer with the Debt Collective, the nation’s first debtors’ union, I’m well versed in the notion of debt as a poor tax—those who have the least end up paying the most. But it was a revelation to me when I realized that elders are the fastest-growing population of student debtors. Debt, I have since understood, is also a time tax—it seizes the future, and corrodes the present, wearing down health, wealth, and pursuits of happiness.

Older student debtors are not exceptional cases within the mounting student-debt crisis; their experiences are, in fact, indicative of its hallmark features. Mounting interest, looming balances, faulty relief methods, and declining wages all force borrowers to carry loans for longer and longer, pushing student debt across generations. Older debtors shuffle their income between credit-card bills, house payments, car loans; student debts, often the furthest from their day-to-day lives, get paid off last—or don’t get paid at all. For aging borrowers on declining incomes, the crisis is acute: student debtors over sixty-five default at the highest rates. In 2015, more than a third of borrowers in their age group defaulted on their educational loans.

“Years and years of erosion of labor rights has meant that wage power has not kept up with student debt,” Randi Weingarten, the president of the American Federation of Teachers, told me. As such, student loans don’t take people out of the working class; they merely change the accounting of people living within it. Fifty-year-old David Ormsby, for example, had been working at a Home Depot in Detroit for eight years when he decided to go back to school. “I wouldn’t call it a dead-end job,” he said, but he felt he wouldn’t be able to advance without a higher degree. In 2005, he began studying part time at a local university for a bachelor’s degree in supply-chain management, while also raising his two sons and working more than fifty hours a week. Today, he holds close to ninety thousand dollars in student debt. The degree helped him secure an auto-manufacturing job with higher earnings and more satisfaction than his previous work. Still, the five-hundred-dollar monthly loan payments are hard to manage. Ormsby has begun working a second job delivering groceries to make his loan payments. “Going back to school was a good thing,” Ormsby said, but he’s frustrated that he will be in his seventies before he will be able to start saving for retirement.

Although most older student debtors have borrowed money for their own education, approximately one-third have taken out loans on behalf of a child or grandchild. Unlike direct federal loans, which have borrowing limits, parents can take on virtually infinite amounts of debt—up to the full cost of attendance each year—to finance their children’s education through a program called Parent Plus. Parent loans often come with punishing terms, such as significantly higher interest rates and scant options for relief. Parent Plus recipients are only eligible for one type of income-driven repayment program, which requires loan consolidation; any opportunities for public-service loan forgiveness are extremely limited. Some parents are stuck paying for loans even if their child dies. Calvin Nafziger, who is eighty, pays two hundred and fifty dollars each month for private loans for his son, who died three years ago. “I’ll probably be dead myself before I finish paying those off,” Nafziger said.

Student debts can plague borrowers until their last breath, jeopardizing even the government’s meagre protections for those of old age: Social Security. Defaulted student loans can trigger the Department of Education to command garnishment for tax refunds, wages, and Social Security. In 2015, more than two hundred thousand student debtors over the age of fifty had their Social Security garnished. One of them was Olivia Faison, a retired analytical chemist who is now seventy-one. Faison studied biology, chemistry, and music at Queens College in the early nineteen-eighties. “I was very fortunate to be able to get a college education on very little debt,” she said, receiving scholarships that paid for the majority of her degree and borrowing approximately nine thousand dollars for the rest. Upon graduating, she worked in private industry for several decades. But, when her company downsized in the early two-thousands, she was laid off. As an older Black woman seeking a job in the sciences, Faison struggled to get her foot in the door at other companies. Many prospective employers required her to submit her undergraduate transcripts as part of the application. But, because she still owed money from her undergraduate degree, Queens College refused to release her transcripts. (CUNY ended this policy, known as transcript ransom, last year.) “My way of getting employment after 2001 was very inconsistent,” Faison said; she worked mostly temporary jobs for the next thirteen years. As her income dwindled, her loan payments became sporadic.