December 2020

What do you call a loan that has been obtained for the purpose of financing the costs of higher education? A student loan. However, considering the fastest-growing age segment of student loan borrowers are over the age of 60 and are not students themselves, perhaps there is a more suitable term that can be used–education debt. Much like auto debt, mortgages, and credit debt, the term education debt places emphasis on what the debt has been used for, instead of who has used it.

Employing the term education debt allows us to paint a more accurate picture of who actually holds debt associated with higher education. Instead of only thinking of the typical American student, we are able to see the wider net of people who are caught in this burdensome trap.

Although most higher education loan borrowers are younger adults between the ages of 18 and 39, those aged 60 and older are the fastest-growing age segment of the student loan market (FPI, 2020). The number of adults aged 60 and older with education debt has increased by 44% from 181,248 in 2012 to 260,352 in 2017 (FPI, 2020). This data helps highlight the misconception about who is burdened by education debt in America.

Increasingly, those who have education debt include parents and grandparents, not just students. These individuals who take out education loans are relatives of students and do not have any other means of supporting their family, other than relying on education loans to provide financial assistance to their students as they pursue higher education–with the hopes of them leveraging their degree for the benefit of the entire family. A sort of investment, which should not be punished. Older Americans with outstanding education debt are more likely than those without such debt to report that they have skipped necessary health care needs, such as prescription medicines, doctor’s visits, and dental care because they could not afford it.

We are in the grips of the COVID-19 pandemic, and as we know, older adults and people who have serious underlying medical conditions might be at a higher risk for severe illness from COVID-19 (CDC). No one should sacrifice their health care needs in order to make an education debt payment, especially during unprecedented times like these. The COVID-19 has brought to light many of the staggering inequities that exist within our society. With it, this issue of education debt has come to the forefront of policy discussions.

Recognizing COVID-19’s potential impact on the state’s education debt holders, Governor Cuomo temporarily halted education debt collection as well as any interest accrual. Congress passed the CARES Act, allowing anyone with federal education debt to defer payments for six months interest-free. President Trump signed an executive order pausing all federal student loan payments until January 2021. Now, as President-Elect Joe Biden transitions into the White House, questions remain on debt-relief.

These policies are all meant to alleviate the pressure that families face. However, instead of continuing to put this issue off by halting payments, federal policymakers must take bold action to cancel all education debt. This is not just an expense but an investment in the people. Instead of making payments on education loan debt, older Americans over 65 will be able to pay for their health care needs and make purchases from businesses that have been strained due to pandemic mitigation policies. This is a bold option that would center public well-being and therefore stimulate the economy which has been stunned by the global pandemic.  


  • At a time when interest rates are low, the interest on education loans should be canceled, and the loans should be refinanced at zero percent interest.
  • Public policy on education debt would be improved by the release of data on the ethnicity, gender, and race of education debt holders. Knowing how the burden of debt is distributed by these demographics would better inform the policy response to this crisis.

By Shamier Settle

Shamier Settle is a State Policy Fellow with the Fiscal Policy Institute