From The Hill:
A pair of Democratic senators is demanding to know more about the growing number of seniors who are seeing their Social Security benefits slashed to cover student loan debt.
Sens. Claire McCaskill (D-Mo.) and Elizabeth Warren (D-Mass.) sent a letter to the head of the Government Accountability Office (GAO) Thursday, calling for a study on this growing segment of senior Americans. The percentage of households headed by people aged 65 to 74 with student loan debt quadrupled from 2004 to 2010. ...
“Garnishing Social Security benefits defeats the entire point of the program — that’s why we don’t allow banks or credit card companies to do it,” said McCaskill, the top Democrat on the Senate Special Committee on Aging, in a statement. ...
In 2014, the government withheld $161 million in Social Security payments to cover student loan debt that had fallen into default....
8 comments:
The problem is the proliferation of online universities. Many people end up going back to "school" solely for the purpose of taking out student loans that allow for payments for cost of living. A large portion of these "students" inevitably fail out/stop attending...but have huge outstanding student loan debt.
While I agree that SS benefits should be protected from some debt collectors...this is NOT one of those cases.
The only way to stop supply of these outrageous loans is to have them defaulted on and not backed or supported by the fed government.
Your first paragraph is accurate, how you come to your second paragraph/conclusion is baffling.
@ 12:00, Here is the rationale for my conclusion.
These "students" got money from the government by pretending to go to school. Now they are getting more money for the government. At some point, the free money train has to stop. I think that it is reasonable for these people to pay back to loans that they agree to repay.
I am a attorney rep and generally a bleeding heart but I agree that this money is owed and should be recovered. However it should be recovered over time and not by reducing the SS benefit to zero until it is recouped.
Worked for Legal Aid for a bit and from so much anecdotal evidence there, I think it's pretty safe to say that a lot of people in poverty enroll in these online and other not reputable schools solely to get a nice student loan check. They figure they're judgment proof, which is usually right until they become eligible for some sort of benefit from SSA.
I'm torn, I think people who knowingly did it should face some sort of role in paying it back, but honestly I'd more like to see these scumbag "university" and other "schools" who prey on the marginalized, get their money, and have no real responsiblity to the student or gov't afterward, get taken to the cleaners over this practice.
And, of course, the gov't should have more than a "you were accepted into some sort of institution that was accredited by somebody and have a pulse" set of criteria for giving out student loans.
Many of these people unfortunately co-signed the loans for their children and grandchildren who then defaulted on the loans. And since you cannot discharge the loan through bankruptcy, they are being held liable for repayment of the loans. In these cases, the government should apply section 207 to these loans so that repayment cannot come from Social Security benefits.
Youre not a bleeding heart if you think no other debtors can get to the soc sec benefits BUT THE BANKS and/or the FED GOV BACKERS who prop up the banks for these eudcation loans. It is not just a problem with online schools, bad schools, private no name schools, etc...all these schools public, private, big and small are way overcharging and the only way to stop that is to stop paying for it. This should be treated no different than credit cards and car loans.
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