We usually think of student debt as a condition of life for the young. However, a significant number of American seniors are also struggling under the burden of expensive student loans.
A recent report from the Government Accountability Office disclosed that student loan debt among seniors reached $18.2 billion by 2013, and that around 4% of Americans aged 65 to 74 had some form of student loan debt in 2010.
California attorney Daniel R. Gamez warns that seniors risk having their Social Security benefits garnished if they default on their federal student loans. The law limits this to 15% of total benefits, and seniors cannot be left with less than $9,000 per year or $750 per month.
Still, for seniors already struggling to get by on their limited Social Security benefits, even a small amount taken from their checks can have a catastrophic impact on their ability to meet mounting expenses.
Gamez points out that private student loans are unsecured debts, and are therefore more like credit card debts. A default on these debts can certainly lead to lawsuits, and judgments, (which can include garnishments). However, the process is different than that allowed when the debt being defaulted upon is a federal student loan.
Seniors should be very cautious about taking on any type of debt – and particularly so when they are offered student loans. Seniors who have incurred these debts, (or are thinking about doing so), can get some free advice from the Department of Education, Consumer Financial Protection Bureau, and Debt.org on borrowing procedures and remedies available to students of all ages.
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