Retired parents or grandparents who helped their children get through college by borrowing money, but who did not repay the money, are now facing automatic deductions. The lenders go to Social Security. The Social Security Administration then orders a monthly deduction program. The money is automatically deducted and sent to the lender.
People thought they could beat the system if the could just make it to retirement. No such luck. The banks just get in line. They get paid first.
In 2012 so far, 115,000 retirees have had their monthly payments reduced in this way. This is almost twice the number of people hit in 2011, and the year is not over yet. It was 60,000 in 2007. The number will start rising fast as baby boomers retire.
How much money does the SSA skim off? Up to 15%. For people who are dependent on SS for their income, this is a big hit. They did not budget for paying it back when they still were in the labor force. Now they are retired.
Many of these retirees aren’t even in hock for their own educations. Consumer advocates say that in the majority of the cases they’ve seen, the borrowers went into debt later in life to help defray education costs for their children or other dependents.
This was truly dumb. They paid for part of their children’s inflated college tuition costs. None of this was necessary. The kids could have gotten their degrees for under $15,000. Now the parents or grandparents are trapped.
Harold Grodberg, an elder law attorney in Bayonne, N.J., says he’s worked with at least six clients in the past two years whose problems started with loans they signed up for to help pay for their grandchildren’s tuition. Other attorneys say they’re working with older borrowers who had signed up for the federal PLUS loan — a loan for parents of undergraduates — to cover tuition costs.
The number of these people will grow. Earlier this year, a total of 2.2 million people 60 years old or older were still in hock for college loans.
Congress changed the law in 1996 to allow Social Security to raid monthly checks in advance. How many people know this? Not many. Now millions of them are going to find out. Congress passed a law to that effect even earlier: the Higher Education Technical Amendments Act. If borrowers owe $60,000 or more, the time limit goes to 30 years. Another eight years can be added on for borrowers facing unemployment or other economic hardship; during those years, payments aren’t required but interest accrues.
Withholding extends even to disability benefits.
Student loan debt is a killer. Avoid it.
The new symbol for America has morphed from the bald eagle to the vulture.
it is expensive for someone else when you go to school on their money. Take out the loan , pay it back.
After causing gramps money problems late in life for being a dead beat. the little spoiled snot will complain that gramps did not leave him very much in the will
i had a student loan and i PAID THE LOAN MYSELF and so should the student, not mom and dad or the grand parents, those who choose to sign on the line should be held responsable, after all you signed the contract, go after the family member and make them pay the loan dont be afraid to take family to court !!!
The more money this Government collects the more they can lose and squander, If they had taken care of this sooner it wouldnt have hit people so hard. They have people working for this Government that dont even know how to make change.
I have no problem with collecting money that is owed to the government or bank. I do believe in enforcing contracts. Laws are made to be upheld.
I do have a problem with government at all levels handing out sums of money to dishonest citizens who think they are owed and take advantage of it and refuse to work and contribute. The favoritism and lack of controls and proper enforcement by the government agencies equates to legal theft.
Uhhhh why aren't the parents/grandparents making their kids/grandkids pay these loans back? I never signed for my kids & will not sign for my grandkids. Anyway, what good are most college degrees? I can't tell you the number of job postings I've seen for admins & even mail room clerks (in companies with no upward mobility) that require a bachelors degree…disgusting.
Eagles morphing into buzzards and vultures; good, because they are feeding on one another…
Why would anyone ever think that the govenment woulddo anything different. All they have ever done is rob us for all their crooked agendas. It is time to force these thieves out of office by any means necessary.