BOOMERS’ SOCIAL SECURITY CHECKS BEING GARNISHED FOR UNPAID STUDENT LOANS

republished below in full unedited for informational, educational, and research purposes:

The Government Accountability Office (GAO) issued its report
on student loan repayments on Tuesday, revealing that 114,000 Americans
age 50 and over had their Social Security checks garnished (the GAO
calls them “offsets”), including 38,000 over age 65. In total the
government recovered $171 million from this group last year, putting
many of them into poverty.

Under the law, students loans cannot be washed away in a bankruptcy,
with rare exceptions. When a loan goes into default, the government has
the power to reduce a person’s Social Security checks by up to 15
percent, or about $140 every month.

That’s enough of a reduction to push some Social Security beneficiaries below the official poverty level of $990 a month.

In other words, the promise of the student loan program — that
workers with new degrees and better skills would help the economy by
making them more productive, allowing them to obtain better paying
jobs — is instead impoverishing an increasing number of those borrowers
who bought the line.

The GAO reports that the student loan program has loaned $1.3
trillion to borrowers. Now, however, the Department of Education, which
oversees the program, is caught trying to balance the needs of the
borrowers increasingly defaulting and the taxpayers who are on the hook
when they do.

Liberal politicians have gotten into the act, specifically Senators
Claire McCaskill (D-Mo.) and Elizabeth Warren (D-Mass.). Upon reading
the report, McCaskill stated, “The growth [in the number of seniors
defaulting on student loan debt] is stunning. I believe this is the tip
of the iceberg of what may be to come if we don’t work harder on the
problem.”

Warren called the garnishments “predatory” and said that she would offer legislation next year to end them altogether.

These, it must be said, are the typical responses to problems created by the politicians themselves.

Of the $140 taken from their checks, 70 percent goes to fees and
interest, with the remaining 30 percent being applied to the outstanding
balance. This guarantees that many Boomers will die long before their
student loans are paid off.

This is another example of the unintended consequences of a
government program allegedly designed to help people but winding up
hurting them instead — while also exceeding the bounds and limits set by
the Constitution. Nowhere in that document is there mention of any
powers given to the national government to offer student loans to young
people seeking better opportunities.

But the new reality leaves an increasing number of Boomers
impoverished and creates an increasing risk to taxpayers backstopping
student loan defaults.