Student Loan Debt Takes a Huge Financial Toll on Seniors

Published in the Woonsocket Call on May 26, 2019

As the 2020 presidential campaign heats up, Democratic candidates are zeroing in on a key domestic issue for 44 million voters, carrying $1.5 trillion in student-loan debt. Their proposals range from free-public college for anybody, forgiveness of all college loans up to $50,000, free community college, to refinancing college loans.

With the national political spotlight put on student-loan debt, many are assuming that this issue impacts only younger Americans. That is not the case. A newly released AARP Public Policy report says it’s a skyrocketing problem impacting multiple age groups. Over recent decades, the report highlights the important role that older Americans play in financing college education for their children, grandchildren and other family members.

Federal Reserve data show that Americans owed $1.5 trillion in student loan debt as of December. An updated analysis shows people aged 50 and older owed 20 percent of that total, or $289.5 billion, a more than fivefold increase from $47.3 billion in 2004.

According to the PPI findings, of those age 50 and over who helped pay for ‘someone else,’ 80 percent helped a child, compared with 6 percent who helped a spouse or partner; 8 percent, a grandchild, and even smaller percentages ‘who helped other relatives or friends.’

Student Loan Debit Hits Seniors Hard in their Pocketbooks

“It is stunning that more families are taking on such sharply greater amounts of student debt than in the past,” says Lori Trawinski, director of Banking and Finance at the AARP Public Policy Institute, in a May 15 statement released with the report, “The Student Loan Debt Threat: An Intergenerational Problem.”

“For younger families, this burden impedes their ability to save for other purposes, such as for a home, their children’s education or for their own retirement,” adds Trawinski, who warns that the long-term financial security of seniors can be threatened by student loan debt.

The researchers noted that most older borrowers hold loans taken out for their own education, and the percentage of borrowers aged 50 and older in default is much higher than for younger borrowers. Data also show that Parent PLUS (direct federal loan) borrowers aged 65 and over are facing higher rates of default than younger age groups, they say.

The 10-page PPI report includes survey results that focus on the key role played by age 50 and older Americans in helping “someone else pay for college and other post high school education.”
(The survey specifically included only those individuals who have not yet fully paid off the debt or who have paid it off within the past five years.)

Of those 50 and over who helped “someone else,” 80 percent helped a child, compared with 6 percent who helped a spouse or partner; 8 percent, a grandchild and even smaller percentages “who helped other relatives or friends.”

One interesting finding of the PPI report was that the most common involvement by people aged 50 and older was cosigning a loan (45 percent), while a smaller percentage (34 percent) ran a balance on a credit card and 26 percent took out a Parent PLUS loan.

Among those who co-signed a private student loan, nearly 49 percent made a payment on the loan, often because they wanted to proactively assist the student borrower. Twenty-five percent said they had to make a payment after the student failed to do so.

The survey asked the one quarter of survey respondents who had taken out a Parent PLUS federal loan, and who had made a payment over the prior five years, whether they ever had any difficulty making payments. Nearly a third 32 percent did have a problem with at least one payment. The breakdown by race/ethnicity for those having a problem with a payment was: African-American/Blacks, 46 percent; Hispanics, 49 percent and whites, 29 percent.

Rhode Island Lawmakers Put Student Loan Debt on Radar Screen

Over a week ago, the Senate Finance Committee took testimony on S 0737, titled the Student Loan Bill of Rights. The legislative proposal, sponsored by Sen. Dawn Euer (D), a lawyer representing parts of Newport and Jamestown, would protect student loan borrowers and establish oversight of student loan services operating in the Ocean State. House Health, Education and Welfare Chairman Joseph M. McNamara has introduced the companion measure (H 5936) in the lower chamber.

“The heavy burden of student debt is challenging enough for the majority of college graduates. Incompetent, inefficient or even deceitful loan servicers should not be allowed to exacerbate their struggles. Student loan servicers must be held accountable to ensure that they are providing honest, reliable information and services to their borrowers,” said Senator Euer (D-District 13, Newport, Jamestown), in a Senate press release announcing the held Senate Committee hearing.

According to a press statement, more than 133,000 Rhode Islanders, including 16,000 senior citizens, have a combined $4.5 billion in student loan debt. Over $470 million of Rhode Islanders’ student loan debt is delinquent.

S 0733 would set standards for student loan serving, both prohibiting predatory behavior and providing best practices for protecting consumers’ rights. It also requires student loan servicers register with the state and allows state regulators to examine servicers’ business practices. Additionally, the Senate bill allows both the Attorney General and department of business Regulation to penalize servicers who violate borrow rights and to seek restitution on behalf of borrowers in Rhode Island. It would also require better communication from lenders to borrowers about any transfer of their loans to another institution and about any alternative repayment or forgiveness program for which the borrower may qualify.

Borrowers in Rhode Island report being double-charged or incorrectly marked as delinquent in payment, with loan servicers taking months, or ever years, to correct mistakes. Additionally, many student loan borrowers eligible for the national “Public Service Loan Forgiveness” program have received incorrect and contradictory information from their loan servicers, leading to improper denials of loan forgiveness.

Calling for Passage of Rhode Island’s “Student Loan Bill of Rights

Bill sponsors Euer and McNamara were joined by Treasurer Seth Magaziner, Attorney General Peter Neronha, Commissioner of Postsecondary Education Brenda Dann-Messier and department of business Regulation Director Liz Tanner, on March 28 at the statehouse to push for legislative fix to protect Rhode Islanders who are shouldering crushing student loan debt.

“By several measures, student loan debt has increased greatly in the last 10 years,” said McNamara at the news conference. “It has surpassed the amount households owe on auto loans, home equity loans and credit cards. This legislation will help to address the crisis by establishing oversight of the student loan process and prohibiting predatory practices,” he noted.

Euer added, “The heavy burden of student debt is challenging enough for the majority of college graduates. Incompetent, inefficient or even deceitful loan servicers should not be allowed to exacerbate their struggles. Student loan servicers must be held accountable to ensure that they are providing honest, reliable information and services to their borrowers.”

Treasurer Magaziner threw in his two cents. “Too many Rhode Islanders are vulnerable to deceptive and predatory practices by their student loan servicers, who make it hard for borrowers to keep their loan payments affordable.” He added, “Too often, borrowers aren’t receiving accurate information about their loan, which can result in higher interest, leave them in debt longer, and make them more likely to default. This legislation will hold student loan servicers accountable and help Rhode Islanders choose the options that are best for them.”

Finally, Attorney General Neronha touted the importance of passing the Student Loan Bill of Rights. “If and when borrowers have issues with their loans or loan servicers, this legislation provides them with a place to go to address those issues. While our primary focus will be on helping Rhode, Islanders get the information they need to solve their student loan problems, my office will be ready, on behalf of mistreated borrowers, to investigate and enforce violations of the student loan standards outlined in this bill.”

If Congress can’t tackle the student loan debt crisis, in a timely fashion, it is now time for Rhode Island lawmakers to offer assistance to Rhode Islanders faced with crippling student loan debt. The Rhode Island General Assembly should pass Euer and McNamara’s “Student Loan Bill of Rights.” and the legislative proposals should not “be held for further study. It’s the right thing to do.

Senators Collins, Casey, Pushing for Reauthorization of Older Americans Act

Published in Woonsocket Call on May 19, 2019

With the Older Americans Act (OAA) scheduled to expire on September 30, 2019, the U.S. Special Senate Committee on Aging puts the spotlight on the importance of this critical law to older American’s, calling for its reauthorization.

Enacted in 1965, the OAA helps more than 11 million seniors age in their communities by funding programs that support grandparents raising grandchildren, reduce social isolation, provide congregate or home-delivered meals and offer respite care among other services.
OAA was last reauthorized in 2016 for a period of three years.

Bipartisan Push in Senate to Reauthorize OAA

While the Senate Aging Committee does not have legislative jurisdiction over OAA, the panel traditionally has put attention on the OAA by holding hearings or special events at the start of any reauthorization process. And the Chair and Ranking Member of the Senate Aging Committee – Senators Susan Collins (R-Maine) and Robert Casey (D-Pa.)—have taken an especially keen interest in this year’s OAA reauthorization process. The Senators are leading a bipartisan coalition of Senators pushing for reauthorization, which includes Senate HELP Committee Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Murray (D-Wa) as well as Senators Mike Enlzi (R-Wyo.) and Bernie Sanders (I-Vt.).

In Collin’s opening statement, she pledged to “get across the finish line, on time, a robust and bipartisan Older Americans Act that will strengthen support for its bread and butter programs, while providing more flexibility for states to meet local needs.”

At the Senate Aging hearing, Collins says she plans to focus on five priority areas in the reauthorization of OOA, specifically family caregivers, nutrition, social isolation, transportation and elder justice. “By enriching the lives of seniors, the Older Americans Act improves the lives of all Americans,” says the Maine Senator, kicking off the two hour and 26-minute hearing, aptly titled, “The Older Americans Act: Protecting and Supporting Seniors as they Age.”

“The Older Americans Act is a shining example of a federal policy that works. Every $1 invested into the Older Americans Act generates $3 to help seniors stay at home through low cost, community-based services,” says Collins.

“The Older Americans Act reminds us who we are as a country. It represents our commitment to the generations who made us who we are today. And, it lifts up the seniors who need our help the most, added Casey in his opening statement.

Before the May 18 hearing, Casey noted that he had reached out to 34 Area Agencies on Aging, representing 60 percent of the counties in his home state, for their feedback about OAA’s effectiveness in delivering services to older Pennsylvanians. He asked these two questions: “How is the OAA currently working?” and “How should this important law be strengthened?”

“In every city and every town, the aging network said that there is no match for the high-quality services that senior centers and Area Agencies on Aging provide to older Pennsylvanians. The OAA programs support Pennsylvanians and their caregivers by providing meals, respite and protection from fraud and abuse. And importantly, the OAA also helps seniors age in the location of their choice, which of course is most often their homes and communities.”

Senate Panel Witnesses Give Thumbs-up to OAA

Larry Gross, the chief executive officer of the Southern Maine Agency on Aging shared with the attending Senators his more than four decades of experience serving seniors in both urban and rural areas. He explained how OAA bolsters nutrition programs, supports family caregivers, reduces social isolation and addresses elder justice. He highlighted a partnership with Maine Medical Center showing that home-delivered meals reduce hospital readmissions, and discussed innovations that he has led to improve senior nutrition and build community.

Faith Lewis, a great-grandparent from Simpson, Pennsylvania, shared her personal experience raising her 5-year-old great-granddaughter and the importance of OAA program support that assist grand families like hers. She receives support through the National Family Caregiver Support Program and regularly attends a support group for grandparents raising grandchildren that is hosted by her local Area Agency on Aging.

Lance Robertson, the Administrator & Assistant Secretary for Aging at the administration for Community Living, gave an overview of OAA, including its history, sustainability, and variability across states and communities. He shared background and data on how OAA has helped millions of seniors to age in their local communities. He also discussed his agency’s mission to connect people to resources, protect rights and prevent abuse, expand employment opportunities, support family caregivers and strengthen aging networks.

Finally, Richard Prudom, the Secretary of Florida’s Department of Elder Affairs, Mr. Prudom talked about his work with his state’s 11 Area Agencies on Aging. He offered a state perspective on interfacing both with the administration for Community Living as well as with the Area Agencies on Aging to develop programs that meet the needs of communities. He focused on priorities in supporting family caregivers, advancing senior nutrition, combating elder abuse and addressing disaster preparedness.

AARP Talks About Impact of OAA Programs

Wendy Fox-Grage, Senior Strategic Policy adviser at the Washington, DC-based AARP, in a Feb 19 blog posting, says that despite “woeful inadequacy of current funding, OAA enables 11 million older Americans to live independently. Recent evaluations confirm the positive impact on the Act’s nutrition and family caregiver program, she says.

As to evaluating the impact of OAA’s nutrition programs, Grage says that forty-two percent of congregate meal participants and 61 percent of home delivered meal participants would skip meals or eat less in the absence of these programs. Congregate meal participants are also less likely to be admitted to nursing homes, and congregate meal participants who live alone are less likely to be admitted to hospital than nonparticipant, she says.

As to caregiving, Grage noted that family caregivers received four hours or more of respite care per week reported a decline in burden over time and those who received at least one education/training, counseling, or support group session experienced an increase in self-reported confidence over time.

AARP joins Senators Collins and Casey’s call on Congress to reauthorize the Older Americans Act before the end of September. OAA’s 11 million beneficiaries, 700,000 caregivers, and providers in the nation’s aging network — consisting of the federal Administration on Aging, State Units on Aging, local Area Agencies on Aging, and local service providers – also wait for Congress to make its move and reauthorize the Act.

General Assembly: It’s Time to Endorse State Alzheimer’s Plan

Published in the Woonsocket Call on May 12, 2019

Just days ago, the Alzheimer’s Association-Rhode Island Chapter, along with over 75 volunteers and supporters gathered for the group’s Advocacy Day, in the Governor’s statehouse at the Rhode Island State, warning state lawmakers about the increasing incidence in Alzheimer’s disease and its impending impact on state programs and services. According to the Alzheimer’s Association 2019 Alzheimer’s Disease Facts & Figures report, there are now 23,000 people living with Alzheimer’s and 53,000 Alzheimer’s caregivers in Rhode Island. This number will skyrocket as Rhode Island’s population continues to age; they say.

During the two-hour rally, Alzheimer’s advocates pushed for the passage of H 5569, sponsored by Rep. Mia Ackerman (D-Cumberland), and S 310, Sen. Cynthia A. Coyne (D-Barrington), companion measures that would legislatively endorse the newly released State Alzheimer’s Plan.

House Majority Leader Joseph Shekarchi also joined in, calling for passage of H. 5189, his legislative proposal that would create a program under the Department of Health and an advisory council to oversee implementation of programming, requiring training for medical professionals, and establishing Alzheimer’s plans in medical facilities. the Senate companion measure is S 223.

Improving Supports for Those Afflicted with Alzheimer’s

Once the Rhode Island General Assembly passes the legislative proposals to endorses the State Alzheimer’s Plan, the state’s Long-Term Care Coordinating Council’s executive board would seek legislative and regulatory changes to carry out its bold set of recommendations for improving supports to those afflicted by Alzheimer’s and other dementias. But this legislation is stalled.
Twenty-three town meetings,45 expert interviews, combined with a survey of 200 Rhode Islanders impacted by Alzheimer’s, enabled Columbia, Maryland-based Splaine Consulting, a nationally recognized health policy firm, to pull together the content for the State Alzheimer’s Plan. More than 30 recommendations are detailed in this 35-page plan to combat the devastating mental disorder which calls for the implementation of three main recommendations.

The updated State Plan provides Rhode Island with the framework to cooperatively address the full range of issues surrounding Alzheimer’s and other dementias. It will be the blueprint that allows us to take unified, targeted action against the disease, says Lieutenant Governor Daniel McKee McKee, who serves as chair of the state’s Long-Term Care Coordinating Council (LTCCC).

McKee’s LTCCC served as the organizational umbrella for a workgroup, including the Alzheimer’s Association– Rhode Island Chapter, the state’s Division of Elderly Affairs, researchers, advocates, clinicians and caregivers oversaw the development of the newly released State Plan.

“Our updated plan will also position the state, local small businesses and nonprofits to take advantage of federal and other funding opportunities aimed at fighting Alzheimer’s disease,” says McKee.

“Unless we move quickly to address this crisis and find better treatments for those who have it, these costs will grow swiftly in lock step with the numbers of those affected, and Alzheimer’s will increasingly overwhelm our health care system. We must decisively address this epidemic,” says Donna M. McGowan, Executive Director of the Alzheimer’s Association–Rhode Island Chapter, who came to the May 7 news conference on Smith Hill to put Alzheimer’s on the General Assembly’s policy radar screen.

Taking Bold Actions to Confront Alzheimer’s Epidemic

“State government must address the challenges the disease poses and take bold action to confront this crisis now. Alzheimer’s is a growing crisis for our families and the economy. That’s why we are unrelenting advocates for public policy that advances research and improves access to care and support services,” says McGowan.

“Alzheimer’s disease and its impact on society is not only a growing public health concern, it very well may be the next biggest public health emergency that we as policymakers need to address,” said Rep. Ackerman. “We’ve already begun crafting legislation that will establish a program in Rhode Island to address the disease,” she says.

Rep. Ackerman used the Alzheimer’s news conference as a bully pulpit, calling on hospitals, researchers, medical professionals, state agencies, and state law makers to act swiftly to address the looming public health crisis.

“There are many factors to be considered in the great work ahead of us,” Rep. Ackerman said. “From early detection and diagnosis, to building a workforce capable of handling the unique health care needs of Alzheimer’s patients. This is something that will take a lot of effort and a lot of time. Now is the time to get to work on this,” she notes.

Like Rep. Ackerman, Sen. Coyne called for the General Assembly to endorse the State Alzheimer’s Plan and also supported Shekarchi’s legislative proposal, too. She also promoted a bill that she put in the legislative hopper that would allow spouses to live with their partners in Alzheimer’s special care units. Allowing couples to live together would help maintain patients’ relationships, connections and personal dignity, she said.

Rose Amoros Jones, Director of the Division of Elderly Affairs(DEA), noted that the power to the Alzheimer’s Association – Rhode Island Chapter’s Advocacy Day creates connections to people that can influence policy and shine light on the supports and information that families need. “Connection is a core value at DEA – as is choice, she said.

Sharing personal stories, Melody Drnach, a caregiver residing in Jamestown, talked about the challenges of taking care of her father with dementia. From her personal caregiving experiences, she agrees with the updated plans assessment that Rhode Island is dramatically under-resourced to address today’s needs.

Marc Archambault of South Kingstown, who has been diagnosed with the disease, came, too, talking about his efforts to cope with the devastating disorder.

At press time, both Rep. Shekarchi and Rep. Ackerman’s Alzheimer’s proposals have been heard at the committee level and have been held for further study, some call legislative purgatory.

Alzheimer’s Impacts Almost Everyone

The devastating impact of Alzheimer’s may well touch everyone in Rhode Island, the nation’s smallest state. Everyone knows someone who either has Alzheimer’s or dementia or is a care giver to these individuals. It’s time for the Rhode Island General Assembly to endorse the State’s Alzheimer’s Plan especially with no fiscal cost. We need a battle plan now more than ever to effectively deploy the state’s resources to provide better programs and services to those in need and to support caregivers.

Call your state representatives and Senators and urge that H 5569 and S 310 are passed and sent to Governor Gina Raimondo to be signed. For contact information, call Eric Creamer, Director of Public Policy and Media Relations, Alzheimer’s Association – Rhode Island Chapter, (401) 859-2334. Or email ercreamer@alz.org.

Concerns Expressed About Savings and Social Security Covering Retiree Expenses

Published in the Woonsocket Call on May 5, 2019

What resolution did you make as new year’s eve approached Dec. 31, 2018? You might have mentioned losing weight, or improving your health by eating healthy foods and regularly exercising. Better budgeting and saving money for retirement might have even made your short list, too.

According to a new national AARP study, reported in Financial Resolutions, Mistakes and Accomplishments, 83 percent of the 1,500 adults (age 35 and over), participating in an online survey, say they made a new year’s resolution or goal within the past five years. Over half (52 percent) say that saving money was their top resolution pick, followed by losing weight (43 percent), increasing fitness (40 percent), and getting better organized (40 percent).

Saving Money Most Popular 2019 Resolution

Sixty percent of those surveyed say polled noted that their 2019 savings resolution included a mix of short-term and long-term goals. Adults ages 35-39 (75 percent) are more likely to have made this resolution, compared to the respondents ages 50-54 (50 percent) and those ages 65 and over (45 percent). The most common goals mentioned by these poll respondents were building of an emergency fund (45 percent), paying off debt (37 percent), saving for vacation (41 percent), building up retirement fund (35 percent), and making home improvements (31 percent)

Just two months into 2019, when AARP’s poll was taken in March, 43 percent of the respondents who made a savings resolution for 2019, expressed concern that they were already at risk of not meeting this goal, tying their failure to unexpected expenses (61 percent), covering basic expenses (46 percent), or a drop in their income (20 percent) due to unemployment or a business slowdown.

The survey respondents say the most common financial mistake relates to not saving (19 percent), followed by buying on credit (10 percent), accumulating too much credit card debt (10 percent) and spending too much (8 percent).

By gender, when compared to men, women are especially likely to say their mistakes were related to credit cards and loans. Men point to mistakes related to making poor stock market decisions, bad investments or not investing.

The AARP survey findings reveal that making financial mistakes can have a lasting impact, too. Over 55 percent say that their mistake is still affecting their current financial situation.

Fifty-nine percent of those polled by AARP said it was only “somewhat likely” to “not at all likely” that the combination of their savings, investments and Social Security benefits would be sufficient to cover their financial needs throughout retirement. This included more women (67 percent) than men (51 percent). Only 41 percent of all respondents said their retirement assets are “very” or “extremely” likely to pay for their needs through retirement.
Over 35 percent of those who are uncertain whether they have enough money to live in retirement attribute their doubts to either not knowing how much money they will need in retirement (31 percent) or not knowing how much to save (9 percent), notes the AARP survey findings.

The AARP survey is in line with a recent updated report from the U.S. Government Accountability Office that found most households approaching retirement have low amounts of savings. When polled about their “biggest financial mistakes” in the AARP survey, respondents said their most common mistakes related to not saving enough.

“The situation is serious, but not one that can’t be improved,” said AARP Financial Ambassador Jean Chatzky, in a statement released with the report. “No matter your circumstance, there are resources available to help almost anyone take simple steps to improve your finances, start a savings plan and get into the habit of putting away money on a regular basis,” says Chatzky.

Education combined with learning simple steps to assist in saving more money are key help people make more informed decisions that result in either saving inadequately or accumulating debt, especially with credit cards.

Check Out These Savings and Planning Tools

Do you need to beef up on your knowledge on ways to better save for your retirement? If so, check out these websites…

AceYourRetirement.org, a website sponsored by AARP and the Ad Council, breaks down the retirement savings process into easy, actionable steps. Just answer a few questions about your savings and goals, and you will receive a personalized action plan that highlights three practical next steps.

AARP’s Money Essentials webpage offers advice about saving, living on a budget, managing debt and other topics.

The Social Security Resource Center provides answers to questions about when to claim, how to maximize benefits and other Social Security essentials.

A new AARP podcast, Closing the Savings Gap™, hosted Chatzky profiles women who are facing a retirement savings gap and matches each with a financial planner who then helps them solve common challenges in retirement planning.

AARP’s website also provides work, career and employment resources to help you maximize your earning potential.

For full access to the 38 page research report, Financial Resolutions, Mistakes and Accomplishments, go to http://www.aarp.org/content/dam/aarp/research/surveys_statistics/econ/2019/financial-resolutions-mistakes-accomplishments.doi.10.26419-2Fres.00309.001.pdf.

For more information, contact S. Kathi Brown of AARP Research at skbrown@aarp.org or G. Oscar Anderson at ganderson@aarp.org.