Arizona seniors increasingly trapped by decades-old student loans

By Stacy Mantle
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Student loans were once considered a financial hurdle for young adults beginning their careers. Today, they're increasingly becoming a retirement crisis as the pandemic payment pause ends, interest balances grow and the rising cost of living impacts our senior citizens.

"The fact that older people now outnumber younger people with student loans — nobody knows that,” said Alan Collier, founder of the Student Loan Justice Facebook group with over 84,000 members and chapters in all 50 states. “Since 2020, I've been screaming from the rooftops trying to get mainstream media to cover it. Ninety percent of them [retirees] are suffering in silence. They think they're the only ones."

Older Americans are carrying education debt longer than ever before and many are entering retirement still making payments on loans they borrowed decades ago — or on Parent PLUS loans taken out to help their children attend college. For many, years of repayment have failed to reduce their balances as programs changed and interest continued to accumulate, leaving retirement plans on hold.

Arizona reflects that growing national problem.

"The repayment structure and system for federal student loans changed dramatically and over the course of the next two years we're going to see more changes implemented," said Anna Anderson, staff attorney for the National Consumer Law Center. "This is really going to impact a lot of people going forward as they're trying to manage their debt long term." 

Between September 2025 and March 2026, the number of Arizona residents more than 360 days delinquent on their federal student loans increased by 94,000, reaching about 232,000 borrowers — roughly one in four Arizona residents with federal student loans. Nationally, an estimated 2.7 million borrowers are now 62 or older, and hundreds of thousands of them are already in default, according to an Associated Press analysis of Office of Federal Student Aid data.

"We think for a lot of people it's going to be harder because older repayment plans that were more favorable are being phased out and the newer plan is not going to be as affordable for a number of people who are struggling with their student loans," Anderson said. "The federal government has very powerful tools that they can use to collect on that debt, including taking a portion of Social Security benefits and tax refunds." 

The average newly retired Arizona worker receives about $2,158 per month in Social Security benefits, according to the Social Security Administration. Consumer advocates warn that even modest reductions from student loan collections can force retirees living on fixed incomes to choose between paying for housing, food, prescriptions or loan payments. 

Arizona borrowers continue falling behind

In Arizona, about 916,100 residents owed roughly $34 billion in federal student loans as of March 2026. Approximately 232,000 borrowers — about one in four — were more than 360 days delinquent, owing a combined $5.34 billion in defaulted loans.

The number of seriously delinquent borrowers increased by 94,000 between September 2025 and March 2026, reflecting a nationwide surge in defaults after pandemic-era payment protections ended. 

By mid-2026, the number of borrowers in default had climbed to approximately 9.5 million, according to the Department of Education.

A separate federal dataset also found about 205,200 borrowers who attended Arizona colleges were at least 90 days behind on their payments as of May 2026, suggesting additional defaults may still be ahead. Those figures represent borrowers who attended Arizona institutions regardless of where they currently live.

Education Secretary Linda McMahon has said the department intends to return borrowers to repayment while protecting taxpayers.

"American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies... Going forward, the Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment—both for the sake of their own financial health and our nation's economic outlook."

Consumer advocates argue that many older borrowers qualify for hardship relief, disability discharge or more affordable repayment plans but never receive them because existing federal systems fail to automatically identify eligible borrowers.

"There are really unique financial needs for people who are in retirement, and carrying student loan debt is going to make it much more difficult for them to afford healthcare, housing and caregiving," said Anderson. "Policymakers should find solutions to make it easier for them, not harder."

Student debt is becoming a retirement issue

Consumer advocates say the consequences of default become significantly more severe as borrowers age. Older borrowers are disproportionately struggling with student loan debt. 

According to the Consumer Financial Protection Bureau, 28% of federal student loan borrowers 62 and older are in default, compared with 14% of borrowers younger than 62.

The agency found the number of Social Security recipients whose benefits were reduced because of defaulted student loans increased more than 3,000% between 2001 and 2019, climbing from roughly 6,200 people to more than 192,000.

During that same period, the amount collected from Social Security benefits increased from $16.2 million to nearly $430 million.

Much of that money never reduced borrowers' original debt.

The CFPB found that most collections were applied toward accumulated interest and fees rather than principal balances.

It also reported that 37% of Social Security beneficiaries with student loans depend on those monthly checks for at least 90% of their income. Half said they skipped medical care or prescription medications because of cost, while the federal law protecting only the first $750 of monthly Social Security benefits has remained unchanged since 1996.

"This debt is impacting people beyond just their wallets,” Anderson said. “It is impacting people at a level that I don't think we have truly come to terms with yet. The majority of older adults carrying student loan debt are still paying for their own education, and that should be a big warning flag that something is going wrong here."

Why balances continue growing

Financial experts say borrowers often remain in debt for decades because interest continues accumulating during deferments, forbearances and periods of reduced payments. Many older borrowers have also navigated multiple changes to federal repayment programs, loan servicers and forgiveness programs.

"The problem is the system has changed very dramatically... This is really going to impact a lot of people going forward as they're trying to manage their debt long term," Anderson said.

Since federal student loan payments resumed after the pandemic pause, borrowers have faced complex, ongoing changes to repayment options, including legal challenges affecting income-driven repayment plans and processing delays for applications.

Borrowers report lengthy customer service wait times, delayed paperwork and inconsistent guidance from loan servicers, making it difficult to remain current even when attempting to repay their loans.

"There are still a number of things that people with these debts can do to get out of default, get into a more affordable repayment plan, and even potentially get these loans canceled or discharged. A lot of folks don't know they have those rights," Anderson said.

As the nation's student loan borrowers continue aging, experts say the crisis is no longer centered on recent college graduates. Increasingly, it is affecting Americans who expected to spend retirement enjoying the later years of life — not struggling to repay decades-old education debt.

"There's almost always something someone can do to make their student loan situation slightly better,” said Anderson. “We really want to get the word out because these programs are being underutilized, in large part because people don't have help to guide them through it."

Editor’s note:  A grant from the Arizona Local News Foundation made this story possible. The foundation awarded 15 newsrooms to pay for solutions-focused education reporters for two years. Please submit comments at yourvalley.net/letters or email them to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.

Stacy Mantle
Education Solutions Reporter

smantle@iniusa.org

Meet Stacy
Stacy Mantle is joining the team at Independent Newsmedia, Inc. as an Education Solutions journalist, thanks to a grant from the Arizona Community Collaborative. She has a long history in education that ranges from teaching junior high and middle school to developing curriculum and standards-based assessments.

Community: A longtime advocate for animal welfare, Stacy is deeply involved in rescue efforts and volunteers with several nonprofit organizations.

Random Fact: Once upon a time, she shared her home with a pet coyote and two wolf hybrids. The experiences were wild enough to become the subject of her first book!

Education: She holds a BA in English with a minor in Political Science, a Post-baccalaureate in Secondary Education, and an MBA with a emphasis on Marketing.

Hobbies: In her spare time, Stacy writes fast-paced urban fantasy novels, crafts small-batch artisan soap, and is always up for hiking or off-roading through the Arizona wilderness with her husband of 23 years.