The
typical struggling student loan borrower is often a 20-something weighed
down by six-figure debts as he or she looks to start a budding career
and adult financial life. But a new report adds to the growing body of
evidence that student debt is so widespread that it’s now a challenge
faced by Americans of all types.
About 114,000 student loan
borrowers over 50-years-old are losing out on a portion of their Social
Security benefits because of an old student loan and the number of
borrowers over age 65 facing this predicament has increased 540% over
the last decade, according to a
report released Tuesday
by the Government Accountability Office, the nonpartisan investigative
arm of Congress. The government provides federal student loan borrowers
with a variety of options to avoid defaulting on their loans, but once a
borrower defaults the feds have access to incredible powers to collect
on the debt, including garnishing Social Security benefits, wages and
tax refunds.
More than 70% of the $1.1 billion collected through
Social Security benefits to pay off student loans only applied to fees
and interest —meaning that those funds likely barely made a dent toward
paying back the borrower’s debt.
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