Social Security Benefits Threatened by Student Loans
Various reports show that the Treasury Department has compiled data regarding the federal government retaining Social security payments to beneficiaries who have defaulted on student loans. Indications are that the number of people in this position is increasing at a fast rate. During the period of January to August 6 the amounts on about one hundred and fifteen thousand Social Security checks were reduced.
This is a factor of concern to the authorities as it is almost double the rate of the 2011 department enforcement ratio. In numbers the increases are about sixty thousand cases for the full year in 2007 as compared to six instances in the year 2000. It is recognized that defaulting on payments related to student loans could affect the ambitions of borrowers related to savings, home purchase or even getting a job.
However, with this particular development, a significant number of retirees have become shockingly aware that the previously untouchable Social Security benefits are now threatened by student loans default. The amounts withheld by the government although variable could be as high as fifteen percent.
The cause of this student loans related predicament for many retirees does not relate to their own education circumstances. It is usually caused by debt created to help with the costs of education for their own children or others dependent on them, such as grandchildren. In other instances, retirees returned to complete their college education in mid-life and obtained federal loans. Therefore, some have debt accumulated from their undergraduate or graduate terms.
Many retirees in this situation are reluctant to discuss the matter with consumer advocates. The various reasons for this include embarrassment, but they do emphasize that the costs involved can be relatively high for the elderly who are restricted to a budgeted existence. One such quoted case related to student loans involved an over eighty veteran who committed himself to debt for the tuition of his son. This retiree is now unable to pay for his needed medication!
One aspect that has not been reviewed, is why the various dependents for whom loans were incurred, are not now accepting responsibility for their payments? Perhaps this is a factor that they consider to be their due and entitlement in life.