A recent Washington Post article highlights the numbers of older individuals struggling with student loan debt. The Federal Reserve Bank of New York published new data showing that Americans 60 and older still owe about $36 billion in student loans.
We have cautioned for some time that student loan burdens are not only a “young persons” problem. Many of our clients are over 60. In some cases, they are struggling to repay loans taken out many years ago. Others went back to school later in life and are now struggling to find work. Some are parents who took out federal PLUS loans for their children or co-signed on private loans.
Even very low-income borrowers who are outside the reach of most creditors are often unable to escape student loan debt burdens. This is because of the government’s authority to seize portions of Social Security payments to collect defaulted student loans and because unlike nearly every other type of civil or criminal action, there is no time limit (statute of limitations) for federal student loan collections.
Social Security offsets are an extraordinary collection tool. Social Security as a lifeline for older Americans has long enjoyed bipartisan support. President Carter stated in 1977 that the Social Security program “…represents our commitment as a society to the belief that workers should not live in dread that a disability, death, or old age could leave them or their families destitute.” President Reagan affirmed this sentiment in 1983, referring to Social Security as a monument to the spirit of compassion and commitment that unites us as a people.
For some reason, this compassion and commitment does not apply to student loan borrowers—individuals buried in debt because they tried to better their lives through education.
It is time to eliminate the Social Security offset program. Policymakers must also restore the statute of limitations for student loan collections and expand the safety net, including restoring bankrupty relief for financially distressed student loan borrowers.
There are some interim steps that could alleviate the harm, including applying a cost of living increase to the $9,000 exemption amount. There should also be a required right for borrowers to request suspension, termination or reduction of offset based on hardship.
If you are an older individual struggling with student loan debt and are willing to share your experiences, please let us hear your voice.
Here is one such voice from an e-mail we recently received from an older borrower :”I am on SS disability after they take cost for medical out of my check I am left with a little over $800.00 each month. Out of the $800+ each month about $110-$120 is taken out for a $6000.00 old student loan Debt I owe leaving me $750.00 a month to try and live on. I am a heart patient I have a pace maker and 2 stints in my heart… I am homeless I have to stay with friends and family I can not afford a home of my own I am almost 60 years old I do not use drugs or drink. I have have many loan collections call me over the years and with threats and the most ridiculous offers to help clear this loan up I just can\’t do this any more I cant afford the most basic things for life at the end of the month I am always in the whole I have to pick and choose what medications I can get. I eat soups peanut butter sandwiches and such as food I can not find anything cheaper to eat, I buy hamburger helper but can\’t afford the hamburger to put in it at $3.99 a pound. I wear old sweet pants and tee shirt I get from hand me down stores for %1 or $2 each and I have know idea where or how to get help. These people spend more on lunch than I get for the whole month to live on and they want more and they keep taking and keep taking well I have nothing left to take. If anyone knows where I can get just a little relief please let me know because I can\’t find any.”