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Unpaid Student Debt Sending Seniors Below Poverty Line

Report: Social Security garnishments rising among older Americans
By Linda Hervieux,  Newser Staff
Posted Dec 25, 2016 1:05 PM CST

(Newser) – Can federal student loan debt follow you into your golden years? It can and it is, per a report released Tuesday. The Department of Education last year garnished $171 million from Social Security checks going to Americans ages 50 and up, reports Consumerist. Since most of those affected are aging retirees on a fixed income, the GAO report found that the drain on these Americans' monthly checks has pushed many of them below the poverty line: 67,300 of them in 2015, versus 8,300 in 2004, notes Consumerist. If that weren't bad enough, the report found that each time a Social Security check is garnished, the recipient is charged a $15 fee (or $180 per year). Among those affected, 75% had defaulted on loans they took out for their own education, rather than their child's.

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The GAO conducted the report for Sens. Claire McCaskill and Elizabeth Warren, who were biting in a statement, with Warren calling it "predatory and counterproductive" to tap into "the sole source of income for millions of seniors." Among the findings they highlight: More than 7 million Americans over age 50 have student loan debt, but there's been an explosion among the 65-and-up set, which has seen their federal student-loan debt leap from more than $2 billion in fiscal year 2005 to almost $22 billion 10 years later. That debt is held by 870,000 seniors, which works out to an average of about $25,000 each. The maximum possible reduction is 15% of their Social Security benefit payment, and the average monthly garnishment is about $140. (Canada is making it easier to repay student loans.)

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