When you think of those who have student loans, you’re likely to think of young adults – typically, those in their 20s to 40s. But student loan payments, either from their personal education or student loans taken out for a family member, are unfortunately affecting consumers leading up to and into their retirement years. Regardless of age, this is a topic of concern for many. The burden of student loan payments and their higher-than-most interest rates are even affecting people’s ability to retire comfortably, or even retire at all.

Figure 1: Consumers who have student loans and amount by age segment

One in four consumers have student loan debt

Source: Loans Baseline, Raddon Research Insights, 2024

While it is true that the younger you are, the likelihood of having student loan debt is higher, Figure 1 shows that student loan debt affects consumers of all ages.

It makes sense that as people age, the proportion of people who have student loan debt decreases, simply due to older people having a longer time to make payments if we assume that people typically complete higher education at a younger age. What many do not anticipate, however, is that these payments may last into your retirement years, or even affect your ability to retire at the age you expected. In fact, nearly one in ten consumers age 55 and older have student loans amounting to $125,000 or more.

Figure 2: Percent of balance 90+ days delinquent by loan type

Student loan delinquencies spike in Q1 2025 as repayment policies shift

Source: New York Fed Consumer Credit Panel/Equifax

Delinquency of student loans declining from 2020 to 2024, as shown in Figure 2, makes sense due to the implementation of repayment pauses and income driven repayment plans during and after the COVID-19 pandemic. However, now that those policies are being rescinded, we are now seeing a rapid increase in student loan payment delinquencies.

It is no surprise that once these monthly expenses are added, we are seeing similar reactions in other loan types such as credit card payments and auto loans. These delinquencies are already approaching pre-pandemic levels just in Q1. The additional monthly expenses trickle into other bills and payments, which is creating hardship for consumers. If borrowers aren’t able to pay these back, they will start seeing a hit on their credit report/score, which will affect their financial standing, increase their cost for future borrowing and inhibit their ability to borrow for other purposes.

According to this article, the government is now implementing involuntary collections. The article highlights those who have faced Social Security garnishment in the past, even profiling a consumer who has been paying her student loans for over 40 years. According to the Consumer Financial Protection Bureau, nearly 452,000 people age 62 and older had student loans default in the last year and are likely to face forced collections on these loans.

Key takeaways:

We can see that student loans do not discriminate and can affect anyone regardless of age. Not only can this affect people’s likelihood to borrow, retire, or continue a life of retirement, this is also something likely to affect those who rely on Social Security benefits. With this in mind, it is important to ask ourselves: As financial institutions, what can we do to help accountholders?

Are you able to identify accountholders with student loan debt? If so:

• Gauge how many of your loan accountholders and how much of your loan portfolio could be at risk of increasing delinquencies.
• Reach out to these accountholders to offer education around the importance of paying back their student loans and guidance to help them effectively manage this and their other existing debt obligations.
• Offer products and services that can alleviate monthly expenses, such as debt consolidation or loan programs that have a traditionally lower interest rate.

By being proactive and consulting with these borrowers, you may garner greater loyalty/affinity from them and reduce the potential impact to your own loan portfolio. These folks may still not be able to pay back all their debts on time, but with greater loyalty/affinity to you, they will be more likely to pay you back first. You may also be able to help them with overall debt burdens affecting their lives.