Student Loans & Garnished Social Security Checks
Last updated: February 15, 2013 by Susan
Before you co-sign for your children or grand-children’s student loans (or before you let them sign on for yours), remember that debt collectors can and will take debt money from your Social Security.
That means our senior citizens could find themselves losing 15% of their income from Social Security each month to delinquent student loan payments IF the debts are not handled in a timely manner.
This is a very important thing to remember considering that the number of elderly citizens having their Social Security income garnished due to student debt has risen sharply over the past decade.
Back in 2000, only six people experienced cuts to their Social Security checks because of bad student loan debt. That number shot up to a whopping 115,000 from January to August of this year alone.1
This number was about double what it was in the same period last year.
Now we do have to realize that many retired people rely on Social Security to help make life livable in their twilight years. Taking 15% off from that lifeline can have devastating consequences, especially when age and weakness start to take their toll on an elderly person’s health.
What complicates all this even further is the growing problem of student debt along with the fact that many people simply can’t save enough for retirement. Jobs and money are both in short supply, which is why some students take out massive amounts of debt to finance their education as they wait for the economy to recover.
But please, do not fall into the trap of co-signing or having someone else co-sign your debt for you.
Student loans are something that the borrower (aka the student) has to deal with. Pulling mom, dad, grandma, grandpa or anyone else into the equation would put them in a very bad situation should the student be unable to pay off the debt.
And the last thing anyone wants to do is retire from work only to have that debt come back and haunt them to their dying day.