Since founding Student Debt Diaries over a year and a half ago, I have received emails from numerous people across the country. Some of the individuals who email me are non-traditional students seeking advice about how they can pay for their educational costs. On a few occasions, individuals in their 50s and 60s have reached out to me and asked me if I thought they were too old to borrow student loans. Of course, individuals of all ages are capable of borrowing student debt. However, some older individuals have asked me whether their age, and the fact that they would not be able to use their degrees as long as they would if they went to school earlier, might make it less practical for them to borrow student debt.
My initial reaction when individuals ask me if they are too old to borrow student loans is to suggest that they should follow their dreams even if there are practical concerns. People can, of course, find their callings later than most, and their age should not prevent them from pursuing their passions. However, there are practical considerations that should be evaluated when deciding if an individual is too old to borrow student loans.
Of course, someone’s age can make it more difficult to pay off student loans. When individuals borrow student debt earlier in their lives, they typically have more time to pay off student loans. In addition, younger borrowers usually repay their student loans during the prime of their earning potential, during which they are able to work the most lucrative jobs. Furthermore, younger borrowers typically have less family obligations and other responsibilities, so they are often able to work part-time gigs in order to devote additional cash to student loans.
In addition, younger borrowers usually have less expenses than older borrowers. Of course, as people age, they usually need to spend more money on medical costs, retirement accounts, and other expenses. However, younger borrowers can save money in a variety of ways, and devote a larger percentage of their income to repaying student debt.
With these considerations in mind, you could eventually be too old to borrow student debt if you will not be able to foreseeably enjoy the benefits of your degree long enough to justify the educational costs. Of course, this analysis will largely depend on the type of educational program you are entering later in life.
For instance, if you simply want to earn a Master’s degree in a field that interests you, and this program only requires one year of study, then it is more likely you will enjoy the benefits of your degree even if you return to school later in life. However, if you want to attend law school or medical school later than most, the analysis might be different. As many people know, medical training not only includes four years of medical school, but several years of residency and fellowship training as well. If you begin this process later in life, you might not have enough time to enjoy the benefits of your training to justify the burdens of student loans. Like many other life decisions, the assessment of whether you are too old to borrow student loans is highly personal, and will depend on the type of program you are entering, your personal background, and a number of other factors.
It should also be mentioned that income-driven repayment plans need to be considered when evaluating if someone is too old to borrow student loans. One person in their 60s contacted me recently, and related that income-driven repayment plans can incentivize older people to earn a degree. Income-driven repayment plans allow individuals to simply devote a reasonable percentage of their income to student loans each month, and usually after a few decades, all remaining debt is forgiven. Not to be dark, but if someone is living on a fixed income, and might not be around for the full 20 to 25 years for income-driven repayment, it might make sense to enroll in educational programs later in life!
When I was in law school, one of my classmates was in his late 60s, and he told me that this reasoning incentivized him to fulfill his dream of attending law school. If this classmate of mine could not find a job, or could not work for too long after earning his law degree, he faced limited repercussions. He told me that under income-driven repayment, his relatively low fixed income would be used when calculating his monthly student loan payment amount and he might not be around in 25 years for the full term of income-driven repayment.
I even jokingly told my father a few times that income-driven repayment could be his solution to some financial issues he was experiencing towards the end of his life. My father never went to college, but if he enrolled in school in his 60s, he could borrow money for living expenses and educational costs. This would give him some support, and there would be few repercussions to borrowing student loans if he didn’t secure gainful employment after graduating. Of course, there are moral and legal reasons why it might not make sense for older borrowers to game the income-driven repayment system, but this repayment option leads to abuse from all types of borrowers. And income-driven repayment should be assessed when older individuals are thinking about heading back to school.
All told, determining whether someone is tool old to borrow student loans is a highly personal assessment. Indeed, the type of educational program an individual hopes to enter, and the years they can expect to work, are some of the factors that must be considered. In addition, income-driven repayment options might actually incentivize older individuals to enter educational programs.