Older Americans who defaulted on their federal student loans are increasingly having to repay them with portions of their Social Security benefits, according to a new report from the
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Older Americans who defaulted on their federal student loans are increasingly having to repay them with portions of their Social Security benefits, according to a new report from the Government Accountability Office.
The report found that borrowers at least 50 years old who default on federal student loans and must repay via “offsets” of their Social Security benefits have often had their loans for decades. The offset is typically about 15 percent of their benefit payments.
Borrowers subject to such offsets are progressively receiving benefits below the federal poverty guideline, according to the report.
After studying the fiscal years from 2001 through 2015, the accountability office found that among borrowers who had their payments withheld for the first time, 43 percent had held their student loans for 20 years or more.
More than a third of borrowers remained in default after five years of having portions of their Social Security payments withheld, and some even reported an increase in their loan balances. About one-third of the borrowers paid off their loans or canceled their debt by establishing that they were permanently disabled.
