How College Debt Can Ruin the Lives of Older Americans

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http://www.alternet.org/hard-times-usa/how-college-debt-can-ruin-lives-older-americans



Growing numbers of older Americans who have defaulted on government student loans are finding the federal government is taking a big slice of their monthly Social Security check to get paid back, according to a new congressional study.

“A significant number of older Americans still have student loans debt from financing their own college education,” said Sen. Bill Nelson, D-Florida, Senate Special Committee on Aging chair, opening a hearing last Wednesday on the trend. “What happens to these folks when they hit retirement age is frightening. Those in default on their loans can see their Social Security checks garnished, leaving them with retirement income that leaves them well below the federal poverty line.”

“Furthermore, unlike other types of debt, defaulted student loan debt can lead to reductions in federal payments, including federal tax refunds,” said Benjamin Veghte, the research director at Social Security Works, which advocates for protecting and expanding the program, in an analysis of the Government Accountability Office study. “Student loan debt poses a significant threat to economic security in old age, both because such debt limits the ability to set aside savings, and because defaulted loans may result in substantially reduced Social Security benefits.”

The GAO’s figures are striking. There are 706,000 Americans 65 and older who have student loan debt ranging from $6,000 to $17,500, which is 3 percent of that age group. “While those 65 and older account for a small fraction of the total amount of outstanding federal student debt, the outstanding federal student debt for this age group grew from about $2.8 billion in 2005 to about $18.2 billion in 2013,” GAO found.