There’s a significant wrinkle in retirement plans for around 3 million older Americans: Student loan debt.
The average baby boomer (aged 62 to 80 years old) owes $42,780 in federal student loans, according to a recent study from the Education Data Initiative.
One older borrower, Robert Lee, 71, of Auburn, Maine, still owes $51,000 of the $66,000 in student loans he took out 29 years ago for his kids’ education, the Wall Street Journal reported Tuesday.
“I feel like Jimmy Stewart in the movie ‘It’s a Wonderful Life.’ I’m worth more dead than I am alive,” Lee told the Journal.
There are numerous complications of nearing retirement with thousands, or even tens of thousands, left to pay on college debt. The average student loan payment of $390 makes up nearly 25 percent of the average Social Security payment in 2026 - $2,071. According to the Bureau of Labor Statistics, the average retiree is left with just $336 at the end of the month.
Lee’s situation highlights the struggles of older Americans still burdened with student loans.
Federal student loans have been notoriously difficult to manage amid overhauls to the student loan servicing system, repayment plans and loan forgiveness programs, which are designed to discharge remaining balances after a certain number of qualifying payments.
Federal loan forgiveness has been almost impossible to obtain, with 93 percent of applications denied in 2025, according to the Education Data Initiative.
For those who planned to have their loans forgiven by the time they retired, a denied application means loan payments will likely resume, adding an unplanned expense to their retirement.
The elimination of the Department of Education’s SAVE repayment plan will cause payments to increase as much as $244 per month for borrowers with a college degree, Mike Pierce, executive director of the Student Borrower Protection Center, estimated in a June 2025 letter to the Senate.
That’s bad news for the average retiree, who will already outlive their savings in 41 of 50 states, research from senior-care advocate CareScout found last month.
Student loan issues add to the woes that America’s retirees already face.
A key Social Security funding source is predicted to run out in 2032, which could cut monthly payments for all recipients by up to 22 percent.
The average retired person believes they need $823,800 to retire but has under $300,000 saved, according to a January survey published by Clever Real Estate.
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