When it comes to student debt crisis, millennials are not the only ones struggling — as it turns out, the older generations are facing a nightmare of their own.
The Government Accountability Office recently released a report revealing how the federal government is reducing Social Security checks to recover millions lost in unpaid debts.
Since 2001, the authorities have collected about $1.1 billion in "Social Security offsets" from recipients of old age. In 2015, the government yanked $171 million off retirement and disability checks, costing the beneficiaries about $140 a month.
Nearly 114,000 of the affected were 50 years or older while about 38,000 were older than 64.
Senators Elizabeth Warren and Claire McCaskill, two top members of Senate Special Committee on Aging, demanded the report as proof of how debt hardship is driving elderly toward poverty — particularly, those who belong to the lower-income class.
“Our government is shoving tens of thousands of seniors and people with disabilities into poverty through garnishment every year — and charging them $15 every month for the privilege — just so that the Department of Education can collect a little bit more interest and keep boosting the government’s student loan profits,” Warren said in a written statement. “This is predatory and counterproductive.”
While most of the people are on the hook for the money they borrowed for their own college degrees, scores are paying the price for helping their children’s education.
“I believe this is the tip of the iceberg of what may be to come if we don’t work harder on this problem,” McCaskill said. “We can’t be garnishing people’s Social Security in a way that puts them into poverty. We need to make sure that we have adjusted the ability of the government to recover those loan amounts in a way that is not spiraling people into poverty.”
Both the senators want to push legislation to ban the practice.
“This report demonstrates just how draconian these Social Security offsets are and how there seems to be a failure at all sorts of levels of this policy,” commented Persis Yu, the director of the Student Loan Borrower Assistance Project at the National Consumer Law Center.
At a time when most Americans are only half a grand away from being completely broke, the reduced Social Security checks is bound to make life extremely difficult for a lot of people.
“Even Scrooge would hesitate to say it’s a good idea for the government to be putting Social Security recipients into poverty trying to recover payments on student loans,” Warren added.
Thumbnail and Banner Image Credits: Reuters