Student loans are a powerful tool for affording education that can be transformative. For many Baby Boomers, higher education opened doors to career growth and financial stability: In 1980, a quarter (25%) of adults aged 25 to 34 held a college degree, compared to just 15% in 1960.¹

Debt from student loans can persist into retirement for some. Approximately 3.5 million Americans aged 60 or older still hold student loan debt, amounting to $125 billion in 2024.² In the past two decades, the number of seniors with student loans has increased more than fivefold.

For seniors, student loan repayment can significantly impact their ability to save or spend in retirement: The average student loan repayment is $393 a month, and the average Social Security retirement benefit is $1,907 a month.^3,4

High stakes for higher education

Research indicates many seniors who carry student loan debt took out loans themselves, rather than co-signing on a relative’s loan.⁵ More than 1.6 million borrowers aged 62 or more still have debt on a student loan that they began repaying 15 years ago.

However, some older Americans aren’t only repaying their own student loans. Roughly 78,000 seniors are responsible for their child’s student loan debt as well.⁶ This is because Federal Parent PLUS (PPLUS) allows parents to take out a loan for their children. If PPLUS loans go unpaid, the borrower may find a portion of their Social Security checks withheld until the balance is paid.

And for many seniors, that final repayment can seem further away than ever. Empower data shows that a majority of Americans (59%) do not feel ready to retire. Sixteen percent say they aren’t preparing to retire at all.

Savvy strategies for seniors

There are ways to cope with higher education expenses that linger long after the last day on campus.

Balancing a budget on a fixed income while also paying down debt is challenging but possible. As always, consult a financial professional before pursuing any of these potential options.

Optimize your repayment plan

Income-Driven Repayment (IDR) plans. For seniors with federal loans, IDR plans may reduce loan payments to a percentage of your discretionary income. This can result in payments as low as $0 for those with limited retirement income.⁷ IDR plans are particularly useful for borrowers who rely on Social Security payments, as they can help prevent student loan deductions from Social Security checks if you default on your loan.

Loan consolidation. Federal loan consolidation can combine multiple loans into one, which could extend the repayment term and reduce monthly obligations. Parent PLUS loan borrowers can often access income-contingent repayment plans through consolidation as well.

Avoid default and garnishment

Work with your loan servicer. Staying in contact with your servicer is vital. Your servicer can help navigate your options, which can include deferment or forbearance that might temporarily pause or lower payments. Working with your servicer might also help prevent Social Security garnishment or tax refund seizures.

Explore forgiveness options

IDR forgiveness. Seniors who have made payments under an IDR plan may see the remaining balance forgiven after 20–25 years, although taxes may apply.

Public Service Loan Forgiveness (PSLF). Retirees who worked in public service roles may qualify for PSLF after 10 years of qualifying payments, even if they are now retired. Balances that are forgiven under PSLF are not considered taxable income, but private loans are not eligible for forgiveness. That’s because private loans come from financial institutions and do not have the same government protections and forgiveness options that federal student loans offer.⁸

Access support services

Credit counseling for seniors. Nonprofit financial counseling agencies can help retirees create a plan to manage student debt alongside other financial obligations, such as medical expenses and housing costs.

Community resources. Local governments, nonprofit organizations, and senior centers often provide free or low-cost workshops and advice for managing debt in retirement. Some organizations offer webinars and tools to help tackle debt.

What retirement savers can do now

Whether you’re nearing retirement or still have a few decades to go, there are options to help you manage your student loan repayments.

Contribute to employer-sponsored student loan repayment programs

The Secure Act 2.0 includes benefits for people paying off student loans. It allows companies to match their employees’ student loan repayments, similar to how 401(k) and 403(b) plans can include qualified matching contributions. Plan sponsors can deposit matching contributions into their employees’ retirement accounts, which can help employees stay on track with retirement savings.

Take advantage of IDR plans

IDRs aren’t just for seniors. If you have federal student loans, setting up an IDR can be an option for tailoring your repayment amount. An IDR plan adjusts monthly payments based on income and family size, which can be helpful for retirement savers who are on a fixed income or are nearing retirement.

Refinance loans (with caution)

Before you consider refinancing student loan debt, be sure to speak with a financial professional. If refinancing is right for you, it can potentially lower interest rates and reduce monthly payments, which may free up more funds for retirement savings. Retirement savers should be cautious, however: Refinancing federal loans means losing access to federal protections, such as income-driven repayment and PSLF. It's important to weigh the pros and cons of refinancing based on your long-term financial goals.

Prioritize saving in tax-advantaged accounts

Retirement savers should prioritize contributions to tax-advantaged accounts, such as Individual Retirement Accounts (IRAs) and 401(k)s, while balancing student loan repayment. These accounts can offer tax benefits that compound over time, which can be particularly helpful later in life. The IRS allows individuals 50 and older to make catch-up contributions to retirement accounts, which can help accelerate savings.⁹ The key is finding a balance that allows for both loan repayment and retirement savings.

Set up a debt repayment strategy

Just like retirement, paying off debt from student loans requires a plan. There are several methods available that can help optimize your repayments, including the debt snowball or debt avalanche methods. These can help retirement savers focus on high-interest loans first, or small debts to build momentum.

The bottom line

Student loan debt doesn’t just affect young adults or those in the middle of their career. The good news across each generation is that there are several saving strategies and debt relief options that could help. Whether that’s an employer-sponsored student loan repayment program, income-driven repayment plans, or forgiveness (for those who qualify), the important thing to know is you are likely to have options to tackle student loan debt.