Older persons with federal student loans in default can have 15% of their monthly Social Security payments taken by the government in order to pay off those debts. Also, any IRS tax refunds will be grabbed away to pay those debts. Plan for this when estimating your retirement income and spending.
Everywhere I look I see my otherwise sensible and responsible appearing friends signing notes for forty, fifty, sixty thousand dollars a year so their kids can go to this school or that school for this program or that program. I try to approach them in the nicest possible way gently pointing out that there are way too many things that can go wrong with their plans to pay this all back. But there is something about the combination of easy credit and spending for your kid’s college that causes some people to just lose their minds.I can’t predict the future but I can safely say that it is very unlikely that all this will be paid back before these people turn 50.
I know a person in their 40’s, on disability, getting student loans garnished.
I have tried to get this person to explore a discharge of the student loan (due to disability) but haven’t made any progress. Apparently it’s just too overwhelming for whatever reason. ??
This person is on a very low, fixed income.
Thank goodness I went to a state school back when that was easily affordable. My last law school tuition check for the semester was $480. That same state law school now charges $30,000 a year. My first job only paid $13,000, but at least I had a job. Now law school graduates are vying with paralegals for the same legal assistant positions. It’s a tough world out there for millenials.
If the 60 y/o really has no income, there is nothing to be done. They can only take their pound of flesh where there is flesh to take. If he has no income or assets, (depending on spouse or family to survive), government can’t do anything.
Besides, the government sold this debt long ago to a debt collector for pennies. I don’t feel too bad for the debt collectors.
WOW-- I don’t get it. I am 54, I took out GSLs which at the time were a total of around $15000- I paid it back in the ten year time I was allotted as did my ex husband for his. We went to our state flagship school.
AMEN @user4321 – I could not agree MORE
“I don’t know all the details (it’s quite a painful subject for my friend), but it’s my understanding that he’s attempted to get out of paying it by claiming that he’s depressed. And it’s possible he’s succeeded.”
My ex-husband is trying to use this excuse to get out of paying child support. So far, he’s not succeeding…the arrears just keep accumulating.
I would think this approach would backfire on student loans. Wouldn’t they just put a lien on your house or other assets?
It sounds like most of these older borrowers are those who’ve borrowed or co-signed for their children as opposed to for their own educations. Surely it occurred to them when they took out the loans that the repayment period could stretch into their retirements. I don’t understand the NYT’s position that it’s better to make the lender take the hit than the borrower. Are they trying to make student loans more expensive and less available? Frankly, I don’t think that’s a bad idea, but that’s definitely not the way to do it.
@rosered55, the guy you describe has probably paid the principal balance off many times over. Interest on loans for legal and medical degrees are quite high. I am sure this guy has tons of penalties included in that amount. There are too many law schools turning out too many lawyers for too few jobs. It is a problem. Some regionally known law schools are having trouble, but the market can’t correct itself because of the fact that student loans are backed by the federal government. I can’t defend this guy, but I suspect there is a disability of some kind involved. I don’t think most law students understand the type of debt they are getting into when they start law school. I think there is at least school losing its accreditation at the moment because its students can’t pass the bar exam. So expect more defaults until something changes.
A lien is only useful if you have any income or assets.
Reading along and feeling cheered up about our choice of chasing merit at less selective schools and keeping debt burden to a minimum.
The taxpayer ends up paying off the debt by the way.
I’m also a lawyer and very aware of the poor job market for lawyers. I think that’s only part of the explanation in this situation, however. The individual graduated from a very prestigious law school in the mid 1990s, and the job market was better then. Plus, there were other jobs he could have done. His disability, if he has one, appears to be a personality disorder. Again, he’s not representative of student loan debtors as a group.
They do. For government loans, they garnish all tax refunds and then put a claim on all other government payments - SS, pension, military, etc.
I firmly believe that my father knew exactly what he was doing when he gave my SSN to my sister, but that my mother was completely in the dark. My father was what would now be known as a malignant narcissist and my sister is borderline. My mother was just a nice woman who never had confidence because she knew her own mother didn’t want her and was too afraid of her own shadow to leave my father, even when her parents offered to take us in.
My father never forgave me for refusing to study computer programming or science whereas my sister was quite happy to study those subjects, especially on my dime. I believe that giving her my SSN for student loans was his way of getting even with me.
@techmom99 Sympathies for your unfortunate family situation.
So sorry. Are you sure he gave it to her or did she steal it?
I’m very sorry about your situation, too, @techmom99. I’ve experienced less onerous financial neglect and abuse from my ex-h and his family, and I know how painful it is to have this happen at the hands of relatives.