August 24, 2014;KTVZ-TV
Nonprofits may be addressing a whole new set of problems for elderly people on fixed incomes. According to the Federal Reserve Bank of New York, more than 2 million Americans are carrying unpaid student loan debt at age 60 and older. This is up from 700,000 in 2005.
Bloomberg reports that there unpaid loans total $43 billion in and that the average debt per older borrower has, since 2005, risen by more than 60 percent to around $20,000. CNN reports that, according to an analysis done by the U.S. Treasury for CNNMoney, last year 56,000 Americans had their Social Security checks garnished for payment of student loans—in 2006, it was 47,500.
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One nonprofit, American Student Assistance, has worked with more than 1,000 people over the past year who have had their Social Security payments garnished to pay loans, as compared to 200 the previous year. Many are in their seventies and eighties. The average Social Security monthly check is $1200, and the average amount taken monthly is $180. Of course, it’s often the case that between penalties and interest, the debt has ballooned over time.
According to this article, besides the elderly, social workers are also seeing more people with mental and physical health issues having their Social Security disability checks garnished. Deanne Loonin, a director at the National Consumer Law Center, said, “I had a Korean War veteran in his 80s who had taken out a student loan for his son and then began having health problems. The government took money from his Social Security disability checks—money that he needed to buy medications.”
Garnishments from Social Security checks last year totaled $150 million.—Ruth McCambridge