Elderly student loan borrowers owe $121 billion. They ask Biden for relief.

[dalton99a]

https://www.washingtonpost.com/education/2024/12/27/elderly-student-loan-debt-forgiveness-biden/

Elderly student loan borrowers owe $121 billion. They ask Biden for relief.
Older borrowers are among the fastest-growing segments of the government’s student loan portfolio and their Social Security benefits are subject to garnishment.
December 27, 2024 at 5:00 a.m. EST
By Danielle Douglas-Gabriel

They don’t fit the typical profile of activists at a rally for student debt forgiveness. But on a dreary December afternoon, a group of senior citizens stood in the rain outside the Education Department pleading for relief from a debt that many fear will burden them for the rest of their lives.

In the waning days of the Biden administration, activists are urging the Education Department to discharge the student debt of older borrowers who they say are in no position to repay. They say the department could use a little-known federal statute that considers a person’s ability to pay within a reasonable time and the inability of the government to collect the debt in full.

There are 2.8 million federal student loan borrowers aged 62 and older with a total of $121.5 billion in debt, more than 726,300 of them over the age of 71, according to the Education Department. Older borrowers are one of the fastest-growing segments of the government’s student loan portfolio, and their Social Security benefits are subject to garnishment.

According to the think tank New America, the number of Americans approaching retirement age with student loan debt has skyrocketed over 500 percent in the last two decades. Some have loans they took out to finance their college educations, while others took out federal Parent Plus loans or co-signed private loans for their children.

...

[Shellback Squid]

1. I'm 63, that's elderly now?

[calimary]

2. I hope President Biden is listening.

He’s STILL in well-positioned to do good, and to help people in need. It’s NOT over for him.

[Think. Again.]

3. No Paywall link...

https://archive.is/3xvHr

[MichMan]

4. What children would let their elderly parents get stuck with loans they took out for them ?

The $230,000 in student loan debt Becki Wells, 63, owes is from putting both her children through college. Although her son and daughter took out loans of their own to attend Howard University and Temple University, respectively, they still needed additional financial support to graduate.

“I was in a vulnerable position,” Wells said, as the rally wrapped up. “It’s not that I don’t take responsibility ... but I do need a hand. Educating my children was an investment in this country. They’re taxpayers. They’re productive.”

Wells said she has never missed a student loan payment since she began making them in 2015. To keep her monthly payments manageable, she withdrew money from her retirement account to lower the balance of her education debt. Still, Wells sees no viable path to paying off what she owes.

I wouldn't have let my mother go into debt like that just so I could attend an out of state expensive college. Lots of more affordable options that wouldn't have put her in that situation. Both those colleges mentioned cost over $30k per year in tuition alone. They could have attended a local state college for half of that amount.

[dalton99a]

5. +1

[Mariana]

6. Sometimes, the parents pushed their kid to attend the expensive school.

I saw that happen among some my kids' friends.

[TexasBushwhacker]

7. Her "productive" children should be paying back those loans

She took the loans on their behalf.

[Xolodno]

8. They can only garnish up to 15% of your Social Security.

If that is the only money you have set aside for retirement, it will probably hurt. But if you shove money into other financial instruments, assets, etc. you could cushion that. That's what I set myself up for.

Bottom line, many people who took the loans were flat out lied or conned to. And I'm not talking the Trump University types where they took the money and got you a job at Wal Mart, but even at many public universities. When I went to college, the top administrator took limo's to the airport and these were chartered flights. He even tried to get land that was going to be transferred over to become a golf course. Saying it would be a great way to employ students. Not too mention, on the occasion, they would toss an extra Gen Ed course or didn't recognize a community college course just so they could force you to pay for more courses. And I won't even go into the upcharge they would do with required books. And the financial aid office would ALWAYS say you will make the money to pay for the loans. And shit you not, some times they would say if you got into a bind, long as you pay fifty bucks a month, you won't be in default.

Then that mother fucker Gingrich made student loans unable to be dischared by bankruptcy. At the very least, those who got loans prior to the law should have been grandfathered in. But just like the welfare queen myth, it was manufactured that doctors and lawers were getting loans to buy thier Porcshe's.

Our health care system is pretty much fucked up, but so is our higher education. And its going to bite us in the ass one day, if not already. I don't subscribe to the idea that China is "stealing" our tech, I think they are figuring out all by themselves and so is India, and Brazil may not be too far behind.

[MichMan]

10. The bankruptcy law was first passed in 1976 and updated a few times afterwards

Although not impossible, discharging student loans in bankruptcy is difficult. Due to a 1976 law, student loans are not treated during bankruptcy proceedings like other forms of debt, such as credit card debt or auto loans. This policy stems from a federal commission on bankruptcy laws, which heard testimony that claimed the easy discharge of educational loans in bankruptcy could undermine federal student loan programs. Congress was concerned that students might borrow thousands of dollars from the federal government, graduate, declare bankruptcy to have their student loans discharged and never repay their educational debt.

In an extension of the Higher Education Act of 1965, Congress passed the 1976 law, which made borrowers wait five years after the first student loan payment was due before they could have the loan discharged through bankruptcy. Congress created an exception that allowed for discharge within that five-year period if the loan caused “undue hardship.”

Congress extended the five-year bankruptcy ban to seven years in 1990. Then Congress extended it to the borrower’s lifetime in 1998.

The 1998 provision passed the House 414-4 and passed the Senate 96-0 before being signed into law by President Clinton.



https://theconversation.com/can-student-loans-be-cleared-through-bankruptcy-4-questions-answered-166308

[Xolodno]

11. I'm aware of that, but it was also overkill.

And just created new problems and incentive to push out loans no matter what, nor with any consideration of what people should study to earn a good income. People coming out of high school at 17 and 18 don't know what they are getting into.

I think that legislation passed out of hysteria and not what was really going on.

[valleyrogue]

9. I am one of them. I will never get out from under it. n/t