- ORIGINAL NEWS
Millions of older adults with student debt are at risk of losing some Social Security benefits, lawmakers warn
- SUMMARY
In a grave warning, Democratic lawmakers have raised concerns that millions of elderly individuals in the United States who are in arrears on their student loans could face severe financial consequences.
Starting in late 2024, once the current moratorium on student loan payments lapses, the U.S. government will resume its aggressive collection practices, which include garnishing wages and reducing Social Security benefits.
This could have a devastating impact on retirees who rely heavily on Social Security as their primary source of income.
It has been estimated that 15% of their monthly benefits could be withheld to cover defaulted student debt.
This reduction could amount to a staggering $2,500 annually, a sum that could push vulnerable beneficiaries closer to poverty.
Senators Elizabeth Warren and Ron Wyden have urged the Biden administration to address this alarming situation promptly.
They fear that without immediate action, countless elderly individuals will face a cruel dilemma: choosing between skipping meals or rationing essential medications to make ends meet.
The government’s stringent collection tactics have been criticized by consumer advocates as being overly harsh, particularly for retirees who have limited financial options.
They argue that such aggressive measures are morally reprehensible and should be reevaluated.
The number of older Americans with student loan debt has risen dramatically in recent years, with over 3.5 million individuals aged 60 and over carrying such debt as of 2023.
This represents a sixfold increase since 2004.
The Democrats’ letter demands a briefing by the Biden administration on its plans to mitigate this issue by April 3.
They urge the government to consider more compassionate options for collecting defaulted student loans while ensuring the well-being of elderly Americans who depend on Social Security.
- NEWS SENTIMENT CHECK
- Overall sentiment:
negative
Positive
“The U.S. Department of Education said it wouldn’t resume its collection practices for 12 months.”
“Consumer advocates say the government’s collection actions are extreme.”
Negative
“That warning from Democratic lawmakers… came in a letter to the Biden administration.”
“”When borrowers are in collections, on average their Social Security benefits are estimated to be reduced by $2,500 annually”, the lawmakers wrote. “This can be a devastating blow to those who rely on Social Security as their primary source of income.””