Welcome to the weekly look at the world of student debt, the crushing problem Fundfly is building a crowdfunding solution to.
It's not just Americans in their 20s, 30s and 40s who are looking for relief from student loan debt. An estimated 8.4 million people in their pre-retirement years are burdened with school debt, too — from their own time in college decades earlier or from loans taken out for children or grandchildren.
Student loan debt held by borrowers in their 50s and 60s is growing rapidly and threatening retirement security, a study says.
Some of that debt could be erased if President Joe Biden uses his executive authority to forgive as much as $50,000 in student loan debt per borrower. He’s facing mounting pressure to take action — and alarming numbers of baby boomers and older Gen Xers are among those hoping he does something soon.
Though student loan balances have been increasing among all age groups, the growth has been greatest among those closing in on retirement, according to research from AARP.
In 2020, borrowers 50 and older owed $336.1 billion on student loans — 22% of the nation's total student loan debt. That was more than double the 10% share held by that age group in 2004, AARP says.
Civil Rights Groups have banded together to ask the Biden Administration to cancel student debt.
The American student-debt problem encompasses 45 million people with a combined $1.7 trillion of debt, and much of the burden falls on communities of color. Civil-rights organizations want President Joe Biden to change that by canceling $50,000 in student debt per person.
On Monday, 36 civil rights organizations, led by the Leadership Conference on Civil and Human Rights, released_ civil rights principles _for student debt cancelation in an effort to encourage the Biden administration to act on racial, gender, disability, and wealth disparities in the country. They said these disparities have left borrowers "on the brink of financial devastation" simply because they sought a higher education, and the only solution is to cancel $50,000 in student debt per person.
"As we navigate the concurrent crises of systemic racism, a global health pandemic, and the resulting economic_ recession_, it is more important than ever that we take bold action that benefits everyone, especially communities of color," the organizations said. "Student debt cancellation will help Black and brown borrowers build wealth and enable our economy to move forward as millions of Americans are able to start families, buy homes, and set up small businesses."
Note: we often get the question “wouldn’t this make Fundfly obsolete? Sadly, no. Canceling $50K per person would only eliminate half of all student debt.
And finally, as the pandemic drags on and some student loans require monthly re-certification to delay payments, there are some steps you can take to avoid harassment.
If you find yourself in the unfortunate situation of your student loan debt defaulting and going into collections, be aware that debt collection for both federal and private loans is regulated by the federal Fair Debt Collection Practices Act, which makes it illegal for a debt collector to mislead or harass you. Debt collectors can't engage in illegal practices and are required to validate that you owe the debt they’re attempting to collect.
If you think your rights are being violated by a debt collector, you should report it to a governmental agency such as your state attorney general's office, the Federal Trade Commission or the Consumer Financial Protection Bureau.