700,000 U.S. Seniors Owe $18 Billion in Student Debt; Fed Taps Retirees’ Social Security Checks

Sunday, August 02, 2015
(photo illustration: Steve Straehley, AllGov)

Hundreds of thousands of seniors are having their already-small Social Security checks reduced because they owe money on student loans.

 

Among the 41 million people making student loan payments, there are 706,000 households headed by someone 65 or older still paying off student debts. Those senior debtors collectively owed a whopping $18.2 billion in 2013.

 

Ninety-one thousand seniors with student loan balances are in default, putting their Social Security payments at risk of being garnished. The government can garnish up to 15% of a Social Security check to repay a student loan, as long as the check amount does not drop below $750 a month. The federal government sucked a total of $150 million out of seniors’ checks in 2013 to satisfy student loan debt, according to the Government Accountability Office, which also made it clear that 82% of senior still owe money for their own student loans rather than those of their children or other dependents.

 

Social Security checks used to be entirely protected from any kind of garnishment. But that changed in 1996, when Congress carved out an exception for student loan debt.

 

Senator Claire McCaskill (D-Missouri) would like that practice reviewed. “Social Security is the sole means of retirement income for tens of millions of Americans, and allowing those benefits to be garnished to collect student loan debt cuts a dangerous hole in our safety net,” she said.

-Noel Brinkerhoff

 

To Learn More:

Haunted by Student Debt to the Grave (by Mary Green Swig, Roger Hickey and Steven Swig, Campaign for America’s Future)

When Your Social Security Check Disappears Because of an Old Student Loan (by Jillian Berman, MarketWatch)

Older Americans: Inability to Repay Student Loans May Affect Financial Security of a Small Percentage of Retirees (Statement of Charles Jeszeck, Government Accountability Office) (pdf)

U.S. Education Department’s Student Debt Collector Accused of Ruthless Tactics (by Noel Brinkerhoff, AllGov)

Education Dept. Reaps Profits from Student Debt (by Noel Brinkerhoff, AllGov)

See all 12 comments

Comments

Man Minchew 1 year ago
The system relies on a virtualized credit card which acts as a proxy for your actual card, thus your sensitive data isn't shared with merchants. Speaking of merchants, Android Pay will be working with over 700,000 stores in the US that have contactless payment terminals.
Don_in_Odessa 1 year ago
There is no reason a parent should need to go into debt for a child's education. There is a little thing called work and these other things called grants and scholarships. The well brought up child will have both the work ethic and the study ethic to be able to take advantage of all these things. If, in the event the well brought up child decides to take a path against his/her/it's upbringing, then the bill is his/her's/it's, not the parent's.
Barbara 1 year ago
How can so many Seniors have Student Debt, it doesn't make sense. Or is the Student Debt a front to get money to something else??? Or is this some bait and switch. Is this mystery money going to something else by this Gov.
Mhp 1 year ago
Wow! Some of you folks commenting must not have anyone to love! My kids want higher education and loans are the only way. Now, how on earth did tuition get so outrageous for bottom of the barrel state schools, I wonder? Our family is working hard but we are so effd. Good to know our social security will also be drained. The world has gone mad.
oldbat 1 year ago
jim, you did not have to take it on. she didn't need a loan. could have just worked and gone to school part time. simple as that. i made it very clear to my boys that there we would not be paying for college. they could live at home, but that was all the contribution they would get. perhaps you should get the shortfall in your check from her. let's see how grateful she is.
oldbat 1 year ago
make them pay!!!! they know they owe it. have known. decide to give the country their middle finger. time to start opening up boarding houses again.
Irene 1 year ago
uuuh folks ? WHY the hell did anyone GET INVOLVED with this FILTH to begin with and then BELIEVE they will NOT BE OBLIGATED TO PAY ? when THE COLLECTIONS contacted YOU, you should have REACTED by 1st finding out does this agency even have JURISDICTION regarding your location, are they LICENSED etc ,LEGIT ? then seeking the ways to RESOLVE IT. flame away.
william zabel 1 year ago
Congress changed the law so they could get access to this money to save their filthy overpriced schools that they themselves own stock in. See, if a certain number of students that attended a school default, then Congress and the department of education have to disqualify that school from receiving further student loans. No way can Congress let that happen, their stock would drop like a rock!
Jim 1 year ago
While I can agree with the preceding comments, there is a severe lack of awareness involved. I am one who is saddled with a student loan debt. However, it was not my intention to get into debt again. It was very simply a ploy by the government to get as many people into debt and I say that quite frankly and without the conspiracy meme. Our last child going to college agreed to take on the loan. BUT!!!! she was DENIED until I was denied. It was explained to us that I have to be denied in order for her to prove she had to take the loan. It was explained to us that I would NEVER be approved as I had a bad credit line from outstanding debts since paid off. Repeat. I.WAS.TOLD.I.WOULD.NEVER.BE.APPROVED!!!! BY THE GOVERNMENT!!!!!! THEN, Obama got elected and suddenly I not only got approval, but was given the TOTAL AMOUNT AVAILABLE even though I entered only what was necessary for tuition. $8000 MORE THAN NEEDED!!! Before, during and after I STILL cannot get financing for a used car, BUT.THE.GOVERNMENT.SET.THE.STANDARD.FOR.APPROVALS.FOR.STUDENT.LOANS. SO.GO.PISS.OFF.TO.ALL.WHO.WANT.TO.COMPLAIN.ABOUT.THEIR.SS.MONEY!!!! I lose as well as you. At least I didn't vote for BHO.
SMK 1 year ago
Rose, I totally agree. And, if they fall below the $750 threshold where they can't have their wages garnished, they should be forced to sell blood once a week until they pay it back. Those seniors should have known 20+ years ago that they would not be able to afford their student loan debt today. Make them pay!

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