The federal government is increasingly taking money out of Americans’
Social Security checks to recover millions in unpaid student debt, a
trend set to accelerate as more baby boomers retire.
government has collected about $1.1 billion from Social Security
recipients of all ages to go toward unpaid student loans since 2001,
including $171 million last year, the Government Accountability Office
said Tuesday. Most affected recipients in fiscal year 2015—114,000—were
age 50 or older and receiving disability benefits, with the typical
borrower losing about $140 a month. About 38,000 were above age 64.
report highlights the sharp growth in baby boomers entering retirement
with student debt, most of it borrowed years ago to cover their own
educations but some used to pay for their children’s schooling. Overall,
about seven million Americans age 50 and older owed about $205 billion
in federal student debt last year. About 1 in 3 were in default, raising
the likelihood that garnishments will increase as more boomers retire.
believe this is the tip of the iceberg of what may be to come if we
don’t work harder on this problem,” said Sen. Claire McCaskill of
Missouri, the top Democrat on the Senate Special Committee on Aging.
report showed garnishments left thousands with Social Security checks
below the poverty line, prompting Sen. Elizabeth Warren (D., Mass.) to
call the practice “predatory.” Both lawmakers said they will push
legislation to ban it.