Student loans don’t just impact people in their 20s and 30s. There has been a new surge lately of retired and retiring Americans suffering from student loan debt.
According to a report from the U.S. Government Accountability Office, more than 700,000 families headed by someone 65 or older carry some level of student loan debt. From the year 2004 to the year 2010, the number of older Americans with student loan debts quadrupled and the amount of money these individuals owed for their educations soared as well. The total student debt in this country sits at $1 trillion, but $18.2 billion of that is held by seniors. That number grew immensely from $2.8 billion back in 2005.
A law established in 1998 allows for seniors who default on their student loans to lost part of their Social Security income. This money could drop to as low as $750 a month. Last year alone, more than 150,000 American seniors had their SS checks reduced due to delinquent student loans.
The Urban Institute has discovered that the average amount of debt that senior citizens held in America was $13,600 in 1998, and that number rose to $21,200 in 2010. The GAO reported that one out of every four seniors with student loans had accounts in default. The number of American seniors who lost some Social Security benefits to pay for student loans increased fivefold from 31,000 in 2002 to 155,000 in 2013.
The GAO’s report said, “As the baby boomers continue to move into retirement, the number of older Americans with defaulted loans will only continue to increase. This creates the potential for an unpleasant surprise for some, as their benefits are offset and they face the possibility of a less secure retirement.”