Rising Number of Seniors with Student Loan Debt
In 2006, the number of seniors losing Social Security money due to student loan debt was around 47,500. By 2013, the number reached 156,000 and continues to rise.
Recent data places over 2 million Americans over the age of 60 with significant student loan debt. Student loans in delinquency for this age group stands at 12.5%. Up to 15% of a Social Security check can be taken by the government to pay back debts. When a Social Security check is a means for housing, food, clothing, and medication, the 15% reduction can make a huge difference.
Common reasons why these seniors are seeing their benefits cut are co-signing a loan for a child or grandchild. Parent PLUS loans are taken out in the name of the parent to finance their child's education. Since these loans are taken out by the parents, they are not eligible for pay-as-you-earn repayment plans as their children's loans may be.
Problems with Student Loan Debt
Student loans cannot be refinanced, meaning that some loans have high interest rates. For small loans that were obtained a few years ago, this can really add up. Further, claiming bankruptcy does not always discharge this debt.
Private lenders are unable to hold Social Security checks accountable for delinquent loans. Federal student loans, however, can be docked.
The best recommendation for seniors with student loan debt is to work longer before claiming Social Security. Not only will the payout be greater the longer that one waits, but it allows individuals to continue to work to pay off their debt.
If you are finding your Social Security checks garnished due to outstanding student loan payments and it is causing financial problems for you, call a Social Security lawyer today. No senior deserves to struggle to pay outstanding student loan debt and an experience attorney can help make sure you're on the track you should be.