The soaring number of retirement-age Americans and pre-retirees with student debt is putting tens of thousands in risk of poverty, the General Accountability Office said Tuesday.
Since 2005, the number of people 50 to 64 paying off college loans has climbed 119 percent, with borrowers 65 and over up triple that, 385 percent, according to the GAO, the investigative arm of Congress.
The rise in the money they owed on federal student loans during the period was even more substantial, an increase from $43 billion to $183 billion for individuals 50 to 64 and an 11-fold hike for those 65 and over to $22 billion.
The growth is particularly troubling, said the GAO, because the federal government can take money away from their tax refunds, Social Security and other federal benefits to help pay off the loans.
In 2015, 37 percent of borrowers 65 and over were in default on the student loans, with 5 percent subject to garnishment of federal benefits. For those aged 50 to 64, 17 percent were in default and 2 percent were subject to garnishment.
On average, $140 per month was being withheld in Social Security and other payments to retirees and pre-retirees to help pay down the debt; this could have come from loans for their own college education or their children’s.
The GAO says 70,000 people with Social Security benefits below the poverty level were having money taken out of their checks to pay student loans.
When the money was being taken out of Social Security, the loans for three-quarters of the borrowers were for their own education.
Some borrowers can have the garnishments stopped or prevented by applying for temporary and total disability and financial hardship exemptions.
The GAO criticized the Education Department for making those freedoms from payments unnecessarily hard to get.