Social Security Withheld From 114,000 Seniors Because Of Student Loans
Social Security benefits were withheld from an estimated 114,000 individuals of at least 50 years in age as of 2015 in order to repay their student loan debts, a congressional watchdog reported Tuesday.
“An increasing number of older Americans have defaulted on their federal student loan debt,” the Government Accountability Office (GAO) wrote in a blog post. “To recover this debt, the federal government can withhold a portion of Social Security payments — a process known as offsetting.”
The 114,000 total borrowers assessed marks a fourfold increase since 2002. (RELATED: Obama Admin: $1.3 Trillion In Student Debt Is Good For The Economy!)
“This number is expected to continue to grow given the increasing number of older borrowers and their high rates of default,” the blog post said. (RELATED: More Than 40 Percent Of Americans Aren’t Paying Their Student Loans)
These older borrowers often held student debt for at least 20 years, took out loans for their own education in their 30s and 40s and owed less than $10,000.
“[A]lmost almost half of them were subject to the maximum possible withholding — 15% of their benefit payment,” and the typical offset was more than $140.
Additionally, “many older borrowers have seen their [Social Security] benefits reduced below the poverty guideline,” the post said.
A 1998 regulation implemented the Social Security offset, but it has not been adjusted for cost of living increases, which caused the number of borrowers with withheld benefits to drop below the poverty line to increase eightfold between 2004 and 2015 — up to 67,300.
Many of these borrowers are eligible for loan relief but don’t apply. Others are approved for relief but are reinstated after failing to submit an income verification form.
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