Thursday, December 22, 2016

Social Security Checks Are Being Reduced for Unpaid Student Debt

Government report says thousands of recipients are left with below-poverty incomes

By Josh Mitchell Updated Dec. 20, 2016 984 COMMENTS

The federal government is increasingly taking money out of Americans’ Social Security checks to recover millions in unpaid student debt, a trend set to accelerate as more baby boomers retire.  The government has collected about $1.1 billion from Social Security recipients of all ages to go toward unpaid student loans since 2001, including $171 million last year, the Government Accountability Office said Tuesday. Most affected recipients in fiscal year 2015—114,000—were age 50 or older and receiving disability benefits, with the typical borrower losing about $140 a month. About 38,000 were above age 64......To Read More......

My Take - Just so everyone understands what's actually happening here - they aren't taking money out of Social Security to pay for student loans, they're taking the money out of Social Security checks of those who failed to pay their student loans off decades ago. 

If they're over 65 that meant many of them took out those loans over 45 years ago, and still owe big time.  

As for the story about Beverly Etan - ignore it!  That's nothing more than an emotional tug to make everyone believe society should now be responsible, and it's not reflective of the majority of these people.  One more thing:  Why couldn't she get a "decent paying job"? Why was she raising three children on her own?  How much is her total SSI benefit? And just how much did her two year degree cost?  According to the College Board, the average cost of tuition and fees at a two-year school is only $3,131, just over one-third of the cost for a year at a four-year public institution.  

So, if she went to a Community College that degree could have been less that $10,000, and how much did she pay on that debt over the last ten or more years, and how much in the way of penalties and interest accrued to that debt because of her failure to pay? 

That's the story that interests me......the details. 

People make bad decisions, but those are their decisions.  I don't condemn them, but how and when did their bad decisions become everyone else's responsibility?  Well.....she's 63 and she's tired and wants to quit working.  So?  I'm 70, and I'm tired, and I want to quit working too, but I still get up and go to work. 

Her payments are $500 a month, but she's working and getting a pay check and even with $500 taken out each month she's probably netting more money than before, even with the early retirement penalties when working.  She could seemingly use all her Social Security and pay off that debt much more quickly and then not have to worry about her retirement money. 

Furthermore, most of these people had the opportunity to pay those debts off when the cost wasn't nearly as high as it is now and the economy was booming.  But they failed to meet their financial obligations, and I wouldn't be surprised to find many of them never even graduated.  But they borrowed that money with a promise to repay.....at a discounted interest rate.   So now we're supposed to feel sorry because they're living below the poverty line and pay off those loans for them? 

They fail to address the real problem......eliminate student loans. 

The reason college education has gotten so expensive is a direct result of these loans and grants from the government.  The more money people had made available to them - the more colleges and universites charged - and the more worthless courses they managed to create and fraudulently entice students into. 

In the meanwhile...they made a Faustian bargain. Tough noogies! 

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