Photo-Illustration: Intelligencer; Photos: Getty
When Mary Donahue was 18 years old, she dreamed of college and a career in fashion merchandising, but it was the 1970s, and her family didn’t support her college goals. Then she got pregnant. “I think I believed that my only way to be successful in life was to find a successful husband,” she recalls five decades later. At 21, she married and had two more children. She would spend a decade getting her associate’s degree while raising her family.
After she was laid off from work, Donahue decided she could go to college at age 40. She says the school told her that she could use the money to pay her rent, which would make it easier for her to earn a bachelor’s degree. “So when they told me that, I thought that sounded like a great idea, and now I could achieve what I wanted to achieve in life,” she says. Her fashion dreams were long behind her, so she decided instead to pursue clinical social work and later obtained a master’s degree from University of Maryland — all while battling cervical cancer. Today she runs her own therapy practice, but a shadow hangs over her success: student-loan debt. “My principal right now is listed at $134,000,” says Donahue, who is now 62.
The loan servicer told Donahue that her current payments will be close to $900 a month for the next seven years before they jump to $1,350 per month, just as she nears 80 years of age. Both her parents developed Alzheimer’s in their 70s and Donahue fears that she will be next, and if that happens she won’t be able to work — and she has to work. “I just don’t picture that I will ever retire,” she says.
Though student-loan debt is often portrayed as only a young person’s issue, older Americans like Donahue are drowning in debt, too. As of this year, 2.2 million Americans over 55 have outstanding student loans and that figure will likely increase over time, according to Karthik Manickam, a doctoral student at the New School for Social Research who has studied the issue. According to Manickam, older debtors face specific challenges as they age.
“First, you take on student debt under the assumption that you’ll be working long enough to repay that student debt,” Manickam says. “So you’re expected to work for another ten years, 20 years, 30 years, and by that point you’ll have repaid your debt.” Older Americans don’t have the same work life ahead of them, whether they took out debt recently or a long time ago. “The next issue is that all the money that they’re repaying is money that they then can’t use to contribute to their 401(k)s or to their retirement savings or to other areas that are traditionally used as methods of retirement.” Many older debtors are set to age into financial precarity or even outright poverty. His research has found that half of all debtors over 55 who still work “are in the bottom half of income earners, making less than $54,600.”
As older Americans wrestle with debt, some have turned to activism. Donahue organizes with the Debt Collective, which calls for the mass cancellation of both student and medical debt, like when they organized a student debt strike in 2015 with members who’d attended the for-profit Corinthian Colleges. Older debtors, many of them women of color, who organize with the group hope they can deliver relief not only for themselves but for others in the same position. First, though, many have to overcome feelings of shame.
“Even after I joined the Debt Collective, I didn’t do certain public things because I was still traumatized by being in this type of debt,” says 71-year-old Valerie Warner, who tells me that she owes $268,000 in student loans. “To know when you apply for something, when you pay your bills and do the best you can, that you just can’t go any further because you have this thing hanging over your head.”
Warner says that she eventually concluded that she was being “selfish.”
“Because there are so many other people who are in a similar situation that I am, I should at least let people know that this is something that is not my fault,” she adds. “I tried to do the right thing by increasing my education, trying to improve my lot in life by going to school, but it just didn’t work out that way because it’s not what they let us believe it is.”
Members of the Debt Collective believe the federal government, which issues most student loans, could take action now if it chose. They point, often, to the case of Betty Ann, who was profiled in a 2022 story for The New Yorker by Eleni Schirmer. Betty Ann, then 91, owed over $300,000 in student-loan debt, which she could realistically never repay given her age. Months later, in 2023, Schirmer published an update: She’d contacted the Department of Education’s ombudsperson to discuss Betty Ann’s debts — only to be told that the senior woman’s loan servicer never told her that she could have enrolled in a payment plan and had her balance dismissed after 20 or 25 years. A week later, the department canceled her debt entirely. Betty Ann was free.
Schirmer, who is a staff organizer with the Debt Collective, tells me that her inbox filled up with anecdotes from older debtors after she published her first story on Betty Ann. After the government discharged Betty Ann’s debts, people began to wonder if they, too, could find relief in their golden years. “We worked with a team of lawyers to develop an online platform where people could put in some of the basic details about their loan history, and it would generate a memo that would be automatically sent to the ombuds office and everybody else,” Schirmer explains. “If we were going to get debt cancellation one memo at a time, let’s flood that possibility.”
Though legal challenges have stalled the Biden administration’s efforts to cancel some student-loan debt, Schirmer says that there remains an “opening for cancellation” on the sole basis of age. The group believes that the federal government has the legal authority to do for other senior debtors what it did for Betty Ann, based on a 1966 law governing how Washington collects debts. Beyond the legality of the matter lies a pressing moral issue, advocates and debtors argue. Older debtors are, like their younger counterparts, evidence of a lending system that has gone badly wrong — and of federal priorities that are deeply askew. Predatory interest rates increase the burden on debtors, as do rising tuition rates. Now millions of older Americans stare precarity in the face, along with their own mortality. “For the debtors, there’s something very morbid about the fact that they know that between now and their last breath, they will be asked to make payments, but immediately after they die, their debts will be discharged,” Schirmer says. In the meantime, “they suffer all kinds of financial and psychological and emotional stress.”
Donahue knows that all too well. “I’m extremely responsible. I pay all my debt on time,” she says. “I really took this seriously, but I also then felt a lot of guilt and regret that I wasn’t making any headway on it.” She tells me that it’s time for the government to adjust its priorities. “We’ve bailed out corporations, we pay for wars, while those of us who are working and trying to survive are not considered, particularly elderly people,” she says, adding that older women like herself, and older women of color, like Warner, tend to be left behind. “We’re the forgotten people.”
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