More older Americans caught in student debt crisis
An increasing number of older Americans are having problems with student loan debt — so much so that their Social Security checks are being reduced because the federal government is withholding loan repayments.
And those reductions result in Social Security recipients falling below the poverty line.
That’s the finding of a Government Accountability Office report sought by Sens. Claire McCaskill, D-Mo., and Elizabeth Warren, D-Mass. The report concludes that Congress should consider adjusting withholdings from Social Security checks to reflect the increased cost of living.
In a statement calling attention to the report, McCaskill noted that the rapid escalation of student loans are a more widespread problem than most people realize.
“This report shows that seniors clearly aren’t immune to the student loan crisis,” McCaskill said. “They’re deeply impacted by this issue to the point that it’s leaving many of them in a dire financial situation.”
Among the report’s findings:
— The more than 7 million Americans over the age of 50 who have student loan debt is a group growing much faster than those who are younger.
— Since 2005, Americans aged 65 and up saw their total student loan debt grow by 385 percent.
— The number of Americans whose Social Security checks are being garnished to recover defaulted student loan payments has increased by 540 percent in the past 10 years, to more than 114,000 older borrowers.
— Since 2004, the number of seniors whose Social Security benefits have been garnished to a level below the poverty line has increased to 67,300, from 8,300.
— Thirteen percent of borrowers aged 50 or older at the time money was first withheld from their benefit checks died while their loans were still outstanding.
— Between 2001 and 2015, 43 percent of older borrowers whose checked were garnished for the first time had held student loans for 20 years or more.
— In fiscal year 2015, more than half of the 114,000 older borrowers who had money withheld from their benefits were receiving Social Security disability checks rather than retirement income.
“We could have hundreds of thousands of American seniors living in poverty due to garnished Social Security benefits if this trend continues,” McCaskill’s statement said, “and we shouldn’t allow that to happen.”
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