Fortysomethings hit hard by delinquent loans, what does that mean for the next generation?
August 7, 2012


By Priya Krishnakumar for


“Delinquency” is a scary word, especially when it comes to paying off your loans, and new data indicates that debt and delinquency aren’t just for those in their 20s. For Americans aged 40-49, delinquency rates for student loans remain higher than any other age group, a clear combination of both hard economic times and a burgeoning student loan crisis that has affected Americans of all ages. According to data released by the Federal Reserve Bank of New York, nearly 12% of Americans aged 40-49 have fallen behind on their student loan payments by 90 days or more, and are the only age group to have reached double-digit delinquency rates. In comparison, Americans aged 30-39 have a delinquency rate of 9.1%, while those fifty and older hover at around 9.5%. Somewhat surprisingly, 20somethings have the lowest delinquency rates at 6.2%, due in part to the fact that those in their twenties can defer their loan payments for a while, an option that older Americans do not have.

In a way, these statistics make sense—middle-aged Americans have suffered just as much under the current economic crisis as young college graduates and new job-hunters, and with the added financial burdens that come with raising a family and sending their own kids to college, it’s no wonder that delinquency rates remain high.  The good news is that while these delinquency rates are high, they’re down from the 13.1% in 2010-2011, a hopefully positive indicator of a slowly improving economy.

As 40somethings continue to remain in debt, the prospects for current college students and recent graduates are frightening. Outstanding federal student loans increase in amount every year (reaching almost $900 billion in 2011), creating, according to Barclays Capital, an increased credit risk. Data provided by the Federal Reserve indicates that almost half of all student borrowers were not making loan payments—47% were still in school or in deferral, forbearance, or in a grace period granted by their loan provider. And with a weak job market and high dropout rates, it’s unlikely that their delinquency rates will do much to lower the national average.

Unfortunately for college students, it appears that for the time being, tuition at both public and private colleges will continue to rise as more and more students are accepted into and choose to attend college—in the meantime, it’s up to the new generation of college graduates to do everything they can to avoid the debt and delinquency that’s plaguing the older generation. For ways to curb your debt as early as possible, stay tuned for an upcoming feature on the site on the do’s and don’ts for new borrowers.

Priya Krishnakumar is a rising junior at Northwestern University’s Medill School of Journalism. She writes for