By Joan McCarter / Daily Kos
The retirement crisis, hastened by the death of the pension and the great recession that decimated retirement funds along with home values, has a yet another growing cause: student loan debt. A new report from the Government Accountability Office shows how massive student loan debt is throughout the population, but how dramatically it has grown for seniors.
The percentage of households headed by those aged 65 to 74 having student debt grew from about 1 percent in 2004 to about 4 percent in 2010. 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. […]From 2002 through 2013, the number of individuals whose Social Security benefits were offset to pay student loan debt increased about five-fold from about 31,000 to 155,000. Among those 65 and older, the number of individuals whose benefits were offset grew from about 6,000 to about 36,000 over the same period, roughly a 500 percent increase. In 1998, additional limits on the amount that monthly benefits can be offset were implemented, but since that time the value of the amount protected and retained by the borrower has fallen below the poverty threshold.
The GAO also notes in testimony [pdf] prepared for a Senate Aging Committee hearing on the issue, that about 80 percent of this debt is from seniors’ own education loans, not those that they co-signed with children or grandchildren. They also note that student loan debt is particularly problematic for seniors because, unlike most consumer debt, it can’t be discharged through bankruptcy. The only way out of student loan debt is death, which is apparently becoming more likely. Similarly, as ThinkProgress notes, student loan debt is the only debt that can be garnished from Social Security payments. Isn’t that special. Congress adopted that provision in 1996, amending the text of the Social Security Act which established that “none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.”
Seems like that would be a very good place for Congress to start in this particular issue—repealing that carve-out for Social Security. How fucked up is it that our government pushes education and retraining on older workers when they lose their jobs, and then takes their Social Security away when they can’t afford to pay back the loans they had to take to get that retraining after they retire? Not to mention how fucked up it is that only $750 of the already stingy Social Security benefits are protected from student loan garnishment.