When Student Loans Linger: Characteristics of Borrowers Who Hold Student Loans over Multiple Decades

See Full Report

Author(s): Urban Institute

Published: Jan. 8, 2020

Report Intro/Brief:
“Conversations about the burden of student loan debt have become increasingly common. But for some Americans, the issue is not new. More than 1.5 million borrowers who first took out loans before 2000 still have debt. Borrowers with debt from the mid-1990s or earlier tend to have higher default rates, have lower credit scores, and live in lower-income neighborhoods than more recent student loan borrowers.

Reason Loans Linger
Federal student loans are generally not subject to a statute of limitations for pursuing legal action to collect on defaulted debt. This means the government can collect on debt regardless of how old it is. Discharging student loans in bankruptcy is possible but requires special circumstances. When borrowers delay repayment or fall into default, the amount owed on the student debt tends to rise because of accumulating interest and fees. Although these penalties are intended to motivate borrowers to repay their debts, they can prolong the time it takes to fully pay down the loan.

Characteristics of Borrowers with Old Loans
I estimate that 0.2 percent of current borrowers had a first debt origination date before 1990 and 3.5 percent had a first origination date before 2000. That means 99,000 consumers have an origination date before 1990 on their credit record and 1.5 million have an origination date before 2000. But these are likely underestimates, as some of these lingering loans may have fallen off the borrower’s credit record, even though they are still collectible.

Borrowers with loans first disbursed before 1995

  • are more likely to live in neighborhoods with higher shares of black residents in their age cohort;
  • at the median, currently owe slightly more on their loan than they initially borrowed;
  • have lower credit scores than those who first borrowed in the late 1990s and early 2000s; and
  • live in areas with lower household incomes than later cohorts.

Policy Options
Some lingering student debt will never be completely repaid. There are policy solutions that could provide relief for borrowers and decrease the chances of recent borrowers holding loans for decades. Potential solutions include

  • making it easier for borrowers to enter income-driven repayment,
  • mitigating the accrual of student loan interest,
  • allowing student loan forgiveness for borrowers facing long-run hardships, and improving the process of default and default resolution.”

>>> CLICK HERE to see all of Youth Today’s REPORT LIBRARY


Youth Today is the only independent, internationally distributed digital media publication that is read by thousands of professionals in the youth service field.

Youth Today adheres to high-quality journalistic standards, providing readers with professional news coverage dedicated to examining a wide spectrum of complex issues in the youth services industry from legislation to community-based youth work.


Our organization retains full authority over editorial content to protect the best journalistic and business interests of our organization. We maintain a firewall between news coverage decisions and sources of all revenue.


We are committed to transparency in every aspect of funding our organization. Donors may be quoted, mentioned or featured in our stories. Our news judgments are made independently – not based on or influenced by donors. Accepting financial support does not mean we endorse donors or their products, services or opinions…(read more)

Youth Today's ISSN: 10896724
Our XML website site map:

Recent Comments



Logo Grant professional Association Business Alliance
LOGO Institute for Nonprofit News 3 turquoise boxes stacked in "J" shape

Copyright © 2019 Youth Today and MVP Themes --- Published by Center for Sustainable Journalism,
1200 Chastain Rd, MD 00310, Chastain Pointe Bldg 300, Suite 310, Kennesaw, GA 30144-5591

To Top