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Discussion Starter · #1 ·
My brother ( 51 years old) owes over 50K for past student loans which he does not plan to pay off. When I told him they will be deducted from his social security payments he did not believe me...but now I read this and KNOW for sure it will be the case although I had no idea it was so wide spread.

It happens: Seniors with student debt - and smaller Social Security checks

"It seems the student loan crisis isn’t just for young people. The GAO found that 706,000 of households headed by those aged 65 or older have outstanding student debts. That’s just 3 percent of all households, but the debt they hold has ballooned from $2.8 billion in 2005 to about $18.2 billion last year. Some 27 percent of those loans are in default."
 

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Many older people are going back to school because they were downsized out of jobs. They take out loans later in life in order to get jobs. Then, some get sick or they have trouble getting jobs in new fields because there are younger people competing or the market for their career choice changes, or they picked the wrong career. I see this all the time when I read financial plans. Others, become partially disabled and find it harder to keep up with their bills. It's very sad.
 

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Many older people are going back to school because they were downsized out of jobs. They take out loans later in life in order to get jobs. Then, some get sick or they have trouble getting jobs in new fields because there are younger people competing or the market for their career choice changes, or they picked the wrong career. I see this all the time when I read financial plans. Others, become partially disabled and find it harder to keep up with their bills. It's very sad.
It appears that it is not just new student loans but student loans the seniors took out when they were traditional college age too. Based on this quote from the article

" When that happens, the federal government pays off the creditor, and now it’s a debt to the federal government,” says Avram L. Sacks, an attorney who specializes in Social Security law. “So they can go after you for the loans - and now that students are reaching retirement age, long-forgotten debts are coming back to haunt them.”
 

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Yes, that's true. In the 70s, there were many doctors and dentists who settled for ten cents on the dollar to pay off their student loans. The laws were different then and the average college student didn't borrow. After that it became possible to extend student loans for up to 30 years. Some people defaulted for the same reasons some people go bankrupt today. The only difference is that student loans cannot be discharged in bankruptcy. The only way to get rid of them is to die or go on permanent disability. If they are discharged under disability, you are still taxed on the amount of forgiveness....unless you are insolvent at the time you become disabled.
 

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Discussion Starter · #7 ·
Many older people are going back to school because they were downsized out of jobs. They take out loans later in life in order to get jobs. Then, some get sick or they have trouble getting jobs in new fields because there are younger people competing or the market for their career choice changes, or they picked the wrong career. I see this all the time when I read financial plans. Others, become partially disabled and find it harder to keep up with their bills. It's very sad.
How very very sad....
 

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Makes sense to me. Why should the taxpayers (AKA ALL OF US) be left holding the bag?
I agree with you. I do not feel a lot of sympathy for people who refuse to pay their debts.

We have a lot of debts. I could whine about why we were not able to pay them earlier or our circumstances when we got them. But I won't. They are our debts, and our responsibility to pay. So we pay them even though it means less money for other things.
 

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The only way to get rid of them is to die or go on permanent disability.
Or pay them like I'm doing.

I also have little sympathy for those do not pay their debts....I've gone hungry to do the right thing, the adult thing - pay my bills and it's made me a better, stronger, smarter, and more frugal person.
 
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I do believe there are circumstances where people truly can't pay their debts, and sometimes it's not really their fault. But it seems like there are others who look at things like student loans as something they can just ignore. Or they think THE GOVERNMENT owes it to them or that it doesn't matter if THE GOVERNMENT does not get repaid. There seems to be a disconnect in that they don't get it that THE GOVERNMENT is really THE TAXPAYERS, the deadbeat's own family, friends, and neighbors.

It may be in the wording, but the OP's OP comes across as if her bro knows he owes the money but just doesn't feel like paying it. That's the kind of person I have an issue with, not those who have run on hard times not of their own doing, and honestly can't pay their debts.
 

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I agree with Spirit Deer's last post. Those who just decide they aren't going to bother repaying debts - that is just wrong, and like others, I have little sympathy for them. But dreadful things can happen to people that are beyond their control and having social security, that in some cases may be all they have, and may also not be through their fault, is a double helping of disaster. Life can be very bitter.

But just deciding to ignore it - no. That is not acceptable.
 

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I try not to judge people because I don't know what they've been through. I do know that many people fall on hard times, not because they are over spenders, but because they got sick or their spouse left them with debt for greener pastures. They may have a special needs child that cost a lot out of pocket that their insurance didn't cover. For every deadbeat, there is an honest person who deserves compassion and a hand up.

Bankruptcy laws were made for those who cannot pay their bills. The laws were abused and they were changed. There should be exceptions besides death and total disability on student loans just like other debt. Better yet, our country should better fund public higher education so students can get affordable college.

I don't mind being in a higher tax bracket if the money could help someone who needs it.

I admire people who have made sacrifices to stay out of bankruptcy but it's not my place to judge a person based on very limited information. In fact, it's not my place to judge anyone.

Just my humble opinion.
 

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I recall seeing this article a couple of weeks ago and wasn't surprised this is happening. It used to be believed that things like Social Security benefits wouldn't (or maybe couldn't?) be garnished for these kinds of debts, but they are. Things like student loans, taxes, and child support are garnished from all kinds of funds.

I do understand the challenges many seniors face living on fixed incomes, having health issues, and possibly caring for an adult child or a grandchild. Its not easy to do if you don't have the option of suddenly making more money, but my guess is these types of garnishments come with the option of contacting the garnisher and arranging an affordable payment. Yeah that may mean paying until you die, but the money is owed and it isn't fair to dump the burden on everyone else.

I'm in my early 30s and already planning on how to pay off my student loans well before I retire. I don't want to be in my golden years dealing with garnishments so being proactive is very important to me. I also realize anything could happen and limit my ability to pay at some point so doing more now could alleviate the debt burden under such a circumstance.
 

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Discussion Starter · #14 ·
1.) My brother is in the category of those people who COULD pay their student loans ( he makes over 100K) and lives very nicely..but chooses NOT to pay them. I think he is of the opinion that if he defers them long enough they will just go away :box: ( total denial).
2.) I also took out substantial student loans to pay for my education and I just thank God that I maintained a good job as well as good health to pay them off :popcorn:.
 
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I had quite a few clients thru the years who had defaulted on student loans or kept putting them in deferrment. What they didn't understand was interest isn't deferred, loans keep growing larger and larger when they aren't paid. And then, surprise, social security is reduced to pay student loans. Guys that spent 30 years avoiding child support get the same surprise. Bankruptcy wipes out most debt but not child support or student loans.

I saw a lot of women 50+ in age who were dumped by their spouse after 30 years of marriage and career of homemaker. They usually receive alimony for 4 or 5 years while they "educate" themselves for the market place. Guess what, no one wants to hire someone 55+ for a career that takes a lifetime to build. So in order to live, they continue educating themselves and living on student loans until they're old enough to get social security. I feel sorry for these women because they find themselves in a situation not of their making and have tried their best to remedy it thru education only to find themselves unemployable due to age. Meanwhile, they get to watch the younger woman their ex-spouse married reap the benefits the she'd spent 30 years helping her spouse build.

I think colleges are partly to blame for encouraging people 50+ to take classes geared to a degree that will not be marketable for someone nearing 60. You cannot blame employers for not wanting to invest in someone so close to retirement age. Of course, its illegal to discriminate by age, but it is a fact of life.
 

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I had quite a few clients thru the years who had defaulted on student loans or kept putting them in deferrment. What they didn't understand was interest isn't deferred, loans keep growing larger and larger when they aren't paid. And then, surprise, social security is reduced to pay student loans. Guys that spent 30 years avoiding child support get the same surprise. Bankruptcy wipes out most debt but not child support or student loans.

I saw a lot of women 50+ in age who were dumped by their spouse after 30 years of marriage and career of homemaker. They usually receive alimony for 4 or 5 years while they "educate" themselves for the market place. Guess what, no one wants to hire someone 55+ for a career that takes a lifetime to build. So in order to live, they continue educating themselves and living on student loans until they're old enough to get social security. I feel sorry for these women because they find themselves in a situation not of their making and have tried their best to remedy it thru education only to find themselves unemployable due to age. Meanwhile, they get to watch the younger woman their ex-spouse married reap the benefits the she'd spent 30 years helping her spouse build.

I think colleges are partly to blame for encouraging people 50+ to take classes geared to a degree that will not be marketable for someone nearing 60. You cannot blame employers for not wanting to invest in someone so close to retirement age. Of course, its illegal to discriminate by age, but it is a fact of life.
While I agree that the circumstances of these 50+ women is unfortunate I also think that their choice to be a homemaker and not create any kind of safety net for themselves is part of the problem. Marriages don't just end due to divorce, sometimes husbands die much younger than expected. These women would have been in the same predicament if their spouse became disabled too.

I think more needs to be done to educate our young women about the importance of always having financial independence just in case, even if they want to be a homemaker. As a homemaker they still have the option to contribute to retirement, work part time/seasonally, create an emergency fund, etc all on their own and completely separate from the family finances. I just find it so unfortunate how many of them don't because they're convinced that a husband was all the safety net they needed.
 
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While I agree that the circumstances of these 50+ women is unfortunate I also think that their choice to be a homemaker and not create any kind of safety net for themselves is part of the problem. Marriages don't just end due to divorce, sometimes husbands die much younger than expected. These women would have been in the same predicament if their spouse became disabled too.

I think more needs to be done to educate our young women about the importance of always having financial independence just in case, even if they want to be a homemaker. As a homemaker they still have the option to contribute to retirement, work part time/seasonally, create an emergency fund, etc all on their own and completely separate from the family finances. I just find it so unfortunate how many of them don't because they're convinced that a husband was all the safety net they needed.
I agree and encourage young women to get an education and work experience before they start a family. I also encourage them to work at least parttime after they have children so they have experience for their resume. But in the 1960's and before, women were encouraged to be homemakers. If you were a successful homemaker, you were helping build your spouse's career and often in charge of family finances which also built his/their financial wealth.

Also, it was difficult for women pre-1960 and thru most of the 1970's to build a career outside of teaching or nursing. A few were able to do so but at that time it was the exception not the rule. Child care was not available unless you had a relative or neighbor willing to help you out. Women were discriminated against in the workplace with lower wages than the men and often no pregnancy coverage in health insurance. Generally, if you were married it was expected that you be covered under your spouse's policy and, if you weren't married, you shouldn't get pregnant and expect coverage.

Another huge issue pre-1960 was no reliable birth control. Many employers did not hire young married women knowing they would be leaving due to pregnancy. At one time the the office I worked at looked like a maternity ward with at least half of the staff pregnant at the same time. It was a huge burden keeping trained staff. The company required you to leave work 6 weeks before your due date and that was a termination of employment not a leave of absence. I lied and said I was due 4 or 5 weeks later than I was so was able to work right up to my due date. The would re-hire you later if they had an opening and I went back twice.
 
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