Student Debt Catches Even the Elderly

An estimated 2 million Americans age 60 and older are in debt from unpaid student loans, whether from money borrowed long ago or from more recent borrowing to fund degrees for family members. And some are having their Social Security payments garnished as a result.

This discrete population of debtors has almost tripled from about 700,000 in 2005.

The New York Times reports Friday:

The debt among older people is up substantially, to $43 billion from $8 billion in 2005, according to the report, which is based on data from Equifax, the credit reporting agency. As of July 31, money was being deducted from Social Security payments to almost 140,000 individuals to pay down their outstanding student loans, according to Treasury Department data. That is up from just under 38,000 people in 2004. Over the decade, the amounts withheld more than tripled, to nearly $101 million for the first seven months of this year from over $32 million in 2004.

While older debtors account for a small fraction of student loan borrowers, who have accumulated nearly $1 trillion in such debt, the effect of owing a constantly ballooning amount of debt but having a fixed income can be onerous, said Senator Bill Nelson, Democrat of Florida, chairman of the Senate Special Committee on Aging.

“Those in default on their loans can see their Social Security checks garnished, leaving them with retirement income that leaves them well below the poverty line,” he said at a committee hearing this week to examine the issue.

“Some may think of student loan debt as a young person’s problem,” he said, “but, as it turns out, that is increasingly not the case.”

Read more here.

— Posted by Alexander Reed Kelly