STUDENT LOANS ARE NOT JUST FOR THE YOUNG ANYMORE
The General Accounting Office published a report that evidences a troubling trend. Between 2002 and 2013, the number of people whose Social Security checks were offset to pay student loans rose over 500%, from 31,000 to 155,000. That means, many seniors who are dependent on Social Security funds for at least part of their income, are still paying student loans.
How does this happen? It can come from either co-signing on a loan for a family member (which, by the way, makes you entirely responsible for the full balance, even if the student dies!), or educational loans obtained for the senior’s own benefit. Many people have gone back to school to retool in the “new economy,” after manufacturing and other construction jobs, among others, have evaporated.
Student loans are easy to come by. They are common, and there is a very good reason for that: the lenders know that these loans cannot be discharged in bankruptcy (in most cases). Thus, the lenders make only a cursory inquiry into credit worthiness or the wisdom of entering into a loan agreement before granting the loan and funding it. Indeed, these loans can be funded within hours in some instances.
The burden on individuals and communities is immeasurable. It is very troubling to think of those over age 65 struggling to make a student loan payment, but that is what is happening, in ever greater numbers. The total amount of student loan debt far exceeds $1 trillion dollars, far in excess of even the total amount of credit card debt in the United States. This is a trend not likely to be reversed any time soon. Congress held hearings about this matter in December of 2013 and again in the summer of 2014. We will see if that goes anywhere. Personally, I would not hold my breath.