Financial Juneteenth - In 2013, 156,000 Americans had their Social Security checks garnished because of student loans they’d defaulted on – a 300% rise from 47,500 people in 2006.
“Social Security means survival. It means food, shelter, medication,” said Joshua Cohen, a Consumer attorney who works with retirees paying back student loans.
Many groups and organizations that work with people that have defaulted on loans, or are struggling with paying them off, are seeing more and more senior citizens approaching them for help. One such organization is the American Student Assistance. This year alone, they have worked with over 1,000 Americans who’ve had their social security checks garnished to repay outstanding student loans – that is a sharp rise from the 200 people they had worked with in 2013.
The smallest of deductions, from an already small check, makes it difficult for retirees to make ends meet. Even if the figure for the initial loan amount was small, years of compounding interest rates have driven them to unaffordable amounts. And when the typical amount of $180 is deducted from an average Social Security monthly check for the amount of $1,200, life becomes quite challenging for the retirees.
Senator Elizabeth Warren, taking note of the problem, had introduced a bill earlier this year that would allow retirees to refinance their student loans. Sadly, it was blocked in June.
Another shocking fact is that even people with mental and health problems aren’t being spared.
Government data shows that the total amount of money garnished from social security checks totaled $150 million last year.
1 comment:
Unfortunately the absence of knowledge in the education sphere makes a lot of difficulties for graduates and their parents. They come across the situation when the work doesn't bring so big income so they can repay the student loan, and of course this makes them to default. I think that everyone must be aware about all terms and conditions of such long-term loans. For example there is an on-line service CashAdvanceLoanStore that provides short-term loans. It gives all detailed information you may need.
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