It is not just the young who are saddled with billions of dollars of student debt, but those in their 60s.
“New research from the Federal Reserve Bank of New York shows that Americans 60 and older still owe about $36 billion in student loans, providing a rare window into the dynamics of student debt. More than 10 percent of those loans are delinquent. As a result, consumer advocates say, it is not uncommon for Social Security checks to be garnished or for debt collectors to harass borrowers in their 80s over student loans that are decades old,” says a Washington Post story.
The reason that banks can garnish Social Security payments from seniors is because under U.S. law private student loans are not erased under bankruptcy and can be seized from Social Security.
Many of the seniors were probably unaware when they took out the loans there was no escape. If they had taken out Federal student loans they would not face Social Security garnishments.
According to two US Senators, colleges are frequently to blame for steering students to private banks for loans without disclosing the difference.
U.S. Senators Dick Durbin (D-IL) and Tom Harkin (D-IA) recently introduced a bill that would require colleges to counsel students before they sign up for private student loan debt.
“Some of these older Americans are still grappling with their first wave of student loans, while others took on new debt when they returned to school later in life in hopes of becoming more competitive in the labor force. Many have co-signed for loans with their children or grandchildren to help them afford ballooning tuition.”
