About 36,000 Americans aged 65 and older with student loan debt, had their Social Security benefits garnished last year pushing most below the federal poverty thresholds, according to an audit by the Government Accountability Office (GAO).
The percent of households headed by Americans 65 years and older with student debt, grew from about 1 percent in 2004 to 4 percent in 2010, with default rates much higher than younger students, data from the audit show.
According to the GAO, student debt already is affecting older Americans’ financial security and can be especially daunting because unlike other types of debt, it cannot be discharged in bankruptcy.
Last year, Social Security benefits of 155,000 Americans were cut as a result of past defaults on their federal student loans, about a five-fold increase from the 31,000 borrowers whose benefits were cut in 2002.
Aggregate federal student loan debt levels were about $1.3 trillion in 2013 and although student debt for those 65 years and older represents a small fraction, the debt for this age group is growing at a much faster pace – from about $2.8 billion in 2005 to $18.2 billion in 2013, a more than six-fold increase, the GAO notes.
A separate report by the Federal Bank of New York revealed that, the number of Americans 50 years and older with student loan debt stood at 6.9 million in 2012, up from 3 million in 2005.
Read the full GAO audit report HERE.
