Student loan debt is a burden at any age, but if you’re older and concerned about your debt’s impact on your retirement or on sending your own children to college, the stress can be multiplied.
More and more older people are struggling with student debt, and 2017 AARP research findings show the population of those above 60 years old with student debt quadrupled during the 2005 to 2015 decade. Similarly, a recent Student Loan Hero study found 40-year-old borrowers tended to have higher-than-average debt balances.
Luckily, there are many options available to older borrowers, particularly those who are repaying their loans into their 40s, 50s and beyond. While each of the below strategies aren’t necessarily easy, using one or more of them can be effective in reducing student loan debt.
While student loan payments can be a heavy burden, many borrowers spend more on their housing, so there’s often a lot of scope to save money. One possibility involves moving, whether within the area you live now, or to a completely new city or town. In some cases, relocating can shave off a good amount of your monthly expenses.
Of course, this can be a difficult choice for some, especially for those who have been residents of their communities for quite some time, or if they live close to family and don’t want to move.
However, moving can take on different forms and can be temporary. Maybe it’s just moving to a smaller house or condo in the same city. Maybe it involves heading to a state with less taxes. Or maybe it’s retiring outside the U.S. in a country with a far lower cost of living. The goal is to reduce your regular expenses without sacrificing much in quality of life.
Paying off your student loans faster is definitely easier if you have more money, and it’s never too late in life to increase your income. There are various ways to do so.
You could consider a side hustle, some of which require little or no money and time to get started. There are gigs out there for every type and interest, from side hustles for introverts to side hustles for sports fans.
Taking part in the sharing economy is another great way to make extra income. You can rent out a room in your home on a website like Airbnb, or even rent out your car. Likewise, you can seek more income by asking for a raise in your current job or changing companies to a similar job that might pay you more.
Once you find a way to increase your income, you can put the extra money toward your student loans.
Refinancing is another feasible option for borrowers who are older. This involves taking all or some of your current student loans and replacing them with a private refinancing loan, ideally at a lower interest rate.
Getting a lower rate can save a significant amount of money on interest, even if the difference in rates seems minor. Check out our refinancing calculator to see what the potential savings might be.
The main drawback in refinancing federal student loans with a private lender is that you will lose many of the benefits that are specific to federal student loan borrowing, such as income-driven repayment plans or easy access to deferment (which you can use to pause your student loan repayment if you’re going through economic hardship).
Chances are, if you’re older, you’ve spent a lifetime acquiring possessions. Paying off your student loans is a great reason to reduce your possessions and make money through selling them.
Use a website like Craigslist or eBay to help sell your possessions. In order to be successful, be sure to be very descriptive about the quality of the items, take great pictures, and keep the price low. Also, if you sell on Craigslist, remember to keep your personal safety in mind and always meet your buyer in a public place.
If you’re having trouble making your repayments, know there are many ways to get help in dealing with student loans.
First, contact your student loan servicer to see if you can lower your payments. For example, income-driven repayment plans are available to federal student loan borrowers. And if things are really tight, they can help you pause your repayment until you’re back on your feet.
Beyond your servicer, there are other places to turn for help with student debt repayment, from government agencies to student loan lawyers.
With enough hard work, budgeting, and, perhaps, starting extra work on the side, you can focus your efforts on reducing your student debt burden completely for a few years, allowing you to live out your future retirement years in peace.
Michael Kitchen contributed to this report.