OK, so you move to South Carolina when you are 59 and establish residency. That state gives free tuition at all public colleges on a space A basis, whether degree seeking or auditing, for those 60 or over and it takes a year to establish residency (normally). Then you enroll in a master's program and you can borrow the cost of living. But instead of going straight through the program, you only go one semester a year and you drag it out for five years and borrow around $11k a year. You'd be out of school eight months a year and you can only defer for six but you have a total of 36 months of unemployment deferment available over the life of the loan as well. The student loan will decrease how much you take out of your other available sources, which will increase the Obamacare subsidy.
Now you need to move to New Mexico, because you're 65, and that state charges $5 per credit hour for tuition. It'll eat up another year of your unemployment deferment but you'll still have 16 months left. You are on Medicare now so you don't care about the Obamacare subsidy. You can now repeat the procedure and the $11k you borrow per year might well allow you to postpone taking your Social Security until you are 70 which will increase it by about a third (depending on your exact age).
But wait, you say: Now I have this huge loan balance. And I say, if you selected the income based repayment plan, you have no worries. Allow me to demonstrate. Borrow $11k for 5 years, take a year off, and do it again for another 5 years. Your loan balance would be $169,435.38. Now bear in mind the lifetime borrowing limit is $138,500 (and set to rise a bit) and this includes any prior undergrad or grad loans so that might limit the amounts.
At this point you could use the remaining 16 months of unemployment deferment, but first let's see what your loan payment would be. Well, folks, it'll likely be the same if you owe $169,435.38 or $10,000,000,000. It'll depend solely on your AGI. So say your pension is $30k and your SS is $12k. You have about $36k after tax to live on which if you own a home should be good to go. Your AGI would be about $40k so your payment would be ... $290.56. Not too bad.
What if you can't pay it and you default? Federal garnishment law applies and is MORE generous than for other types of debts: 10% of your "disposable income" is all they can take, which is ... $300.00. And, although your student loans can't be discharged in bankruptcy, they can't get at your retirement accounts if you default; all they can do is take 10% of your disposable income. Make sure your SS check goes directly to a distinct account which receives no other deposit and they can't even get that if it is the only source of the 10%. So they're f@cked.
And while you certainly wouldn't want to burden your heirs with this debt, which will balloon to around $300k or so since the payments won't cover the interest, that is also not a problem since student loans fully discharged upon death.
Is that creative enough for you? And while you go to school for free for ten more half years you will likely (for sure in the case of UNM) have all the rights and privileges of any other student for your $5/credit hour, such as gym, library, discounts, blah blah.
Any loser could do this.
Very interesting. Now I want to hear what Clean thinks about this plan....