The student loan dilemma facing the country is typically told as a story of struggling young college grads burdened with debt in a jobless economy. But it would seem the "young" part of that media narrative doesn't always hold.
Retirees are increasingly seeing their Social Security benefits trimmed to pay back student loans, reportsBusiness Insider. In 2012, the number of folks roughly 65 or older who saw their SS benefits garnished was approximately 115,000. That's up from half that number in 2007 and only 6 such cases back at the turn of the millennium.
A majority of these retirees are on the hook for college loans they took to pay for a child or grandchild's education, say consumer advocates. Those remaining often returned to school in middle-age, a move for which they're now paying. And yes, still others are compensating for college life experienced many, many decades ago.
"It's really a unique problem we haven't had to face before," said Robert Applebaum, founder of nonprofit advocacy group Student Debt Crisis. "And it's only going to grow."
Via Business Insider and SmartMoney.
The question: Three guys walk into a hotel, and they're going to split the cost of a room. The room is $30. They each kick in $10 and head up to their room. The manager gets wind of it and tells the clerk the room is only $25. He hands five $1 bills to the bell hop and tells him to go refund the guys' money. On the way up to the room, the bell hop gets to thinking, as bell hops are wont to do, and says to himself, "No way can three guys split $5, I'm going to help out." He stuffs $2 in his pocket, knocks on the door, gives each guy back a buck and heads back downstairs to the desk, glowing in the warmth of a job well done. So now each guy has paid $9.$9 times 3 is $27 plus $2 the bell hop stole--only $29! Where is the other buck?
@Sterling - The math is wrong. It's $25 for the room plus the $2 stolen by the bellhop plus the $3 given back to the men = $30. The amount the bellhop stole does not affect the difference between what the men ultimately paid and the original room rate.
Here is the problem, If you have student loan, then you worked for State government. Retired at say 65 from State job. Your Social security pension will get cut by 50% .. Bush jr enacted law, that no State employee or Rail road employee can draw both pensions at 100% rate. So social security pension you paid into, get 50% haircut.. But government then turns up the heat and demands full repayment of student loan.
when we were in university in the late 60s and early 70s these loans were called 'guaranteed student loans'. you'd go to the bank and get your loan without question because the federal gov't guaranteed that they'd pay the bank back if you couldn't... what happened to that?
@Real4WheelDrv it certainly would be nice to go back to the point where they actually used tax dollars to help the citizens. i remember when they made the anouncement that everyone was going to actually have to pay back their student loans... man... the shit hit the fan.
I don't know about it being ignored. I think this has become a standard practice. A few years ago my wife started getting annual checks from an old boss's Social Security account. She was told that a audit discovered that she was underpayed from twenty years before. When we asked her boss about it, he said that it was from an old NLRB lawsuit. One that my wife had no knowledge of.
We worry about money that some old person doesn't have and what we can take from them after trying to make it by going to school. We should be ashamed of our morals/ethics that seem to have been thrown out the window. Why don't we worry more about the politician's pay after they get out of office and tax paid medical care. We could worry about the medical and pharmceutical companies that rob us all each day. Then there are the bankers and corporations that rape us of our rights and freedoms in the name of the all mighty dollar. I don't see this chapter of cruelty going on much longer.People will finally open their eyes one day if it is not too late.
Its called a moral hazard. We live in a limited economic society (not everyone gets everythig they want - ex I have a 40" TV instead of an 88" TV). Money determines how our limited resources are distributed. Consider two sets of people, the old person above who borrowed money to pay for a college education and didn't pay it back, and another old person who decided that college wasn't for him and worked as a mason all his life to save up for retirement. Is it fair to the mason to pay (even partially) for the other old person's college education? Could I have $50 from you so that I can go to college?
There we have it, folks. The perfect solution....take the money and run. Get your education, live your life as you please without paying back the money loaned to you to pay for it, then everyone else pays it back for you. BULLSHIT!!
I was just saying that we have billions to waste on military endeavors, policing the world and paying taxes for the rich. I just think a break for someone whom tried to better themselves would be better spent than supporting 1.7 million illegal aliens or people that could work if they would just get off their asses. We waste so much here in the US for stupid things, why not INVEST in our school systems and education. That is what I am told when I bitch about paying taxes and having no kids. It is to have a better education system, which has gone down hill greatly the last few years. I guess we can bail out Government Motors again or some bank.....
@Locutus - I'm all for bailing out the people that are struggling and just can't seem to make ends meet. I just think the bailing out needs to be done on a personal level and not government (and I do put my money where my mouth is). As for investing in our future, who's to say that an investment in college that results in unemployment is better than personal investment by our mason in say a better mattress that allows him to get a better night's sleep? As for a better education system, more money over the last 40 years has had no correlation with better results. Family economic status has a considerable correlation with school performance. The very nature of sucking money out of families to pay for more expensive schools should be seen as the wrong thing to do.
And I bet some of them still do not have a job. Students loans just passed credit card debt in this country. Those loans are backed by the U.S. Government. If they do not pay them back taxpayers foots the bill.
If you elect to take State or Federal retirement plan, the government will not allow you to take 100% of your Social security pension, when you reach 65. You can only get 50% of the Social security payout. Bush enacted that into law.
I'd say your right in this case they cosigned for there children and were left paying the bill. It's a sad commentary on a sad generation. Teaching children to work has been look upon as child abuse over the last decade or two. Even letting them make a dollar is looked down on. (lemonade stands, mowing grass, etc) Is it a surprise they won't work or pay there own bills. You reap what you sow.
Exactly!...The cost of higher education is so high in this country..that pretty soon no one will be able to afford it or be able to repay a student loan...anyway. Yet the "experts" always beat us over the head to get a "college degree".?!?!?---And, in opposition to a different post on this topic, its generally not a matter of "how good your education was"...But real wages in this country have not only stagnated, but they have declined since the Reagan Administration....So a degree that would have earned you some big bucks in, say 1970---will allow you to collect less these days, in many disciplines....
The people who got loans certainly should have paid them back while in thier working prime. If the government was going to garnish anythiing, it should have been while they had jobs applying the education the loans were for. Then, look at all the deadbeats who are thousands and millions behind in income tax and go about life without a care in the world. Why aren't they forced to pay what they owe? I once had to pay $500 back and the paperwork I got repeatedly you'd think it was $500,000 or something. Of course I paid it back, who wants to get sideways with the IRS when you don't have deep pockets? It's the already wealthy who seem to get by with it as we saw when Obama started nominating people for his cabinet, etc. They came out of the woodwork including Geithner.