McCaskill-Warren GAO Report Shows Shocking Increase in Student Loan Debt Among Seniors
U.S. Senators Claire McCaskill and Elizabeth Warren today released a government report showing that student loan debt is escalating rapidly, and tens of thousands of senior Americans are currently having their Social Security benefits cut below the poverty line to recoup defaulted student loan debt.
The report, conducted for McCaskill and Warren by the Government Accountability Office (GAO), indicates that in the past ten years the amount of student loan debt among seniors has skyrocketed, as has the number of seniors whose Social Security benefits are being garnished in order to recoup that debt. McCaskill and Warren both serve on the Senate Aging Committee, where McCaskill is the top Democrat.
The report's troubling findings included:
The cohort of those over 50 in student loan debt, over 7 million Americans, is growing much faster than younger cohorts. Since 2005, Americans aged 65 and up saw their total student loan debt grow by 385 percent.
The number of Americans whose Social Security checks are being garnished by the government to recoup defaulted student loans has increased by 540 percent in the last decade to over 114,000 older borrowers.
Since 2004, the number of seniors whose Social Security benefits have been garnished below the poverty line has increased from 8,300 to 67,300.
Thirteen percent of borrowers 50 or older at the time of their initial offset died while their loans were still outstanding.
"This report shows us that seniors clearly aren't immune to the student loan crisis-they're deeply impacted by this issue to the point that it's leaving many of them in a dire financial situation," McCaskill said. "We could have hundreds of thousands of American seniors living in poverty due to garnished Social Security benefits if this trend continues, and we shouldn't allow that to happen."
"The hard-earned Social Security checks that are the sole source of income for millions of seniors should not be siphoned off to pay interest and fees on student loan debt," said Warren. "It's no wonder many Americans don't think Washington works for them: our government is shoving tens of thousands of seniors and people with disabilities into poverty through garnishment every year-and charging them $15 every month for the privilege-just so that the Department of Education can collect a little bit more interest and keep boosting the government's student loan profits. This is predatory and counterproductive, and Congress should pass the bill I've cosponsored to put a stop to this practice."
Some of the report's troubling findings included that more than 70% of garnished Social Security benefits were going toward fees and interest, and not paying down seniors' principal balances-leaving many seniors with a reduced standard of living, in a cycle of debt they could not escape.
GAO also issued recommendations related to the report, including eliminating Social Security benefits garnishment to below the federal poverty line, as well as simplifying the paperwork for disabled Americans to discharge their student loan debt.