Older student loan borrowers face high delinquency rates as Trump administration ramps up collections
Nearly 1 in 5 — or roughly 18% — of student loan borrowers who are 50 and older became "seriously delinquent," or 90 days or more late on their payments, in the second quarter of 2025, according to the Federal Reserve Bank of New York. The rate for that age group was closer to 10% in 2019.
For comparison, closer to 8% of student loan borrowers between the ages of 18 and 29 became seriously delinquent during that time frame, and around 11% of those aged 30 to 39 did.
"Being delinquent on student loan debt is difficult for people who are approaching their retirement years," said Lori Trawinski, director of finance and employment at AARP.
"People end up having to make extremely difficult choices," Trawinski said.
Some of the repayment troubles may stem from older Americans borrowing more than they can afford for their children's college education, experts say. Other people run into financial difficulties after returning to school later in life and then not accessing the career opportunities they'd hoped for.
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Whatever the reason, falling behind on your education debt may quickly have more financial consequences.
Earlier this summer, the Trump administration announced that it would soon resume collection activity against student loan borrowers who aren't making their payments. This comes after a nearly five-year period during which student loan holders were shielded from the consequences of missing their bills, a policy that began at the start of the Covid-19 pandemic.
Here's what older borrowers in the red need to know.
There are key differences between student loan delinquency and default.
While becoming delinquent for 90 days or more on your student loans can show up on your credit report and lower your score, the more severe consequences of federal collection activity don't usually start until you're more than 270 days late and eventually fall into default, said higher education expert Mark Kantrowitz.
Meanwhile, private lenders typically consider student borrowers in default after 120 days without a payment, he said.
Delinquent student loan borrowers have time to get current, said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York.
"For those struggling, the first step is to explore all available federal repayment options, especially income-driven repayment plans, which can significantly lower monthly payments and prevent default," said Boneparth, who is also a member of the CNBC Financial Advisor Council.
You can try to find a repayment plan with monthly bills you can afford at Studentaid.gov.
The so-called Income-Based Repayment plan is one of what may be a dwindling number of manageable repayment options left to borrowers, after recent court actions and the passage of President Donald Trump's tax and spending bill. That legislation phases out several other repayment plans.
There are tools from the Education Department to help you determine how much your monthly bill would be under different plans.
Struggling borrowers can also see if they're eligible to pause their payments, such as through a forbearance or economic hardship deferment — though it's important to check if your debt will accrue interest during the reprieve.
"Requesting a temporary forbearance can buy time, but ideally, borrowers should aim for an affordable, sustainable payment plan rather than stop-gap measures," Boneparth said.
Older student loan borrowers who are behind on their payments received some good news earlier this summer: The Department of Education has paused its plan to garnish defaulted borrowers' Social Security benefits. Normally, Social Security recipients can see their checks reduced by up to 15% to pay back their defaulted student loan.
An Education Department spokesperson told CNBC in an email Tuesday that the department has not offset any Social Security benefits since restarting collections on May 5 and has paused future Social Security offsets.
Still, older borrowers should take steps to get their debt out of delinquency as quickly as possible and avoid becoming at risk for more punishing collection activity, said AARP's Trawinski.
While the Trump administration said in June that it was pausing Social Security offsets, "what they did not do is issue a formal rule or regulation saying they won't do so in the future," Trawinski said. As a result, she said, "there's an expectation that they will at some point resume those garnishments."
For those older borrowers who are still working, the Education Department can also garnish up to 15% of your disposable, or after-tax, pay, toward a defaulted student loan, Kantrowitz said.
"We anticipate wage garnishment to begin later this summer," a spokesperson for the Education Department told CNBC on Aug. 5.
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