Student Loan Delinquency Highest Among 40 Year-Olds


Middle Age Student Debt

We typically think of student loan debt as an issue that plagues 20- and 30-year-olds. But a report from the Federal Reserve Bank of New York reveals that it is actually 40-somethings that have the highest student loan delinquency rate of any age group.

According to the report, one third of the U.S.’s $900 billion in student debt is held by Americans over 40 and nearly 12% of people age 40-49 have fallen behind on student loan repayments by 90 days or more.

Here is how student loan delinquency compares among age groups:

  • 9.4% delinquency rate for those in their 50s
  • 11.9% delinquency rate for those in their 40s
  • 9.1% delinquency rate for those in their 30s
  • 6.2% delinquency rate for those under 30 years old

Why student loan debt afflicts the middle-aged

Surprising as it may be, at first glance there are several reasons why student loan debt hits forty-somethings the hardest. From pressures of being among the “sandwich generation” to the costs of returning to school later in life, student debt can continue to stack up during this life phase.

Financial burden of children & parents

As of December 2012, the average unemployment rate for Americans age 45-54 was 5.8%. This is actually the lowest rate of unemployment for any age group – the problem is, this generation is often left to pick up the pieces for their struggling children and parents.

According to a report form Pew Research Center, 48% of adults ages 40-59 have provided some financial support to at least one grown child in the past year. Another 27% have provided primary support for a grown child. And 15% of middle-aged adults are providing financial support to both an aging parent and a child.

More adults going back to school

According to the National Center for Education Statistics, in 2010, 3.9 million people ages 35 and over were in degree-granting institutions, which was up 20% form 2006. Just like with young people, it’s not uncommon for middle-aged students to stack up debt thanks to these post-secondary education costs.

To get an idea of what this situation looks like, we talked with David Dewhirst, a business owner who recently went back to school to complete a B.S. in Computer Science. “I have somewhere around $90,000 dollars of standard and private student loans currently,” he says. “I’ll be 45 this year and at my current pace the repayment plan looks ENDLESS.” Despite the monstrous debt, Dewhirst says he wouldn’t hesitate to do it all over again. “Since graduating, I worked professionally for several years as a software engineer and now run my own company. My degree and the education behind it have opened unbelievable doors and created unbelievable opportunities for me.”

For 40-somethings dealing with new student loan balances from having returned to school, this added financial burden can be seen as an investment. With luck, their new training and degrees may open new opportunities that weren’t available before they went back to school – and incurred new loan debts.




Briana Fabbri is a personal lending expert and knows the benefits of great budgeting. She currently works as Head of UK Business for Enova International.