Student Debt Driving Elderly Into Poverty

A soaring number of Americans are facing an old age of poverty because they are still saddled with student debt, according to a Government Accountability Office report released yesterday. The government has the power to slash Social Security or disability benefits to pay off federal student loans, and the number of people who have had their benefits reduced surged to 155,000 last year from just 31,000 in 2002, Bloomberg reports. Some 3% of households headed by elderly people carry student loan debt, and they are much more likely to be in default, the GAO report found. Some older Americans are still paying off debt from when they were much younger, others took out loans after going back to school later in life, and others co-signed loans for children or grandchildren.

"Some may think of student loan debt as a just a young person's problem," Sen. Bill Nelson, chair of the Special Committee on Aging, told a hearing yesterday, reports Reuters. "As it turns out, that's increasingly not the case." A big part of the problem—as with many other problems—is inaction from Congress, Slate reports. A law says that the government can't seize retirement benefits if it will leave people with a check of less than $750, but that limit was set in 1998, when it was above the poverty line, and hasn't been updated to keep pace with inflation since. (In another student controversy, many parents are still paying off the loans of their dead children.)