According to a new report from the Government Accountability Office, between 2004 and 2010 the number of seniors with student loan debt quadrupled to 706,000 households.
Betsy Mayotte is the director of regulatory compliance with American Student Assistance, a non-profit that helps families manage education debt. She says she's starting to see a fairly significant increase in older borrowers reaching out for help.
Take one borrower she heard from recently: "He's 77, his wife 82," says Mayotte. "They both have age typical health concerns, they’re not going to work again and they owe a significant amount in student debt — both their own and debt they took on for their children — and they don’t know how they’re going to pay for it."
It's not what many expect, says Persis Yu, a staff attorney with the National Consumer Law Center's student loan borrower assistance project.
“Older Americans have a lot more student loan debt than people realize,” she says.
Federal student loans, notes Yu, never go away. They have no statute of limitations.
“So, if a borrower doesn’t finish paying off a loan, they could be on the hook for the rest of their life,” she says.
Yu says if a senior defaults on a loan, their social security benefits could be garnished. The GAO says when that happens, additional fees can be involved making it even harder to pay off the loan.
A 1968 federal law allows debt collectors not only to garnish wages but to take from a debtor's bank account. Consumer advocates say the outdated law is overly punitive and out of touch with reality.
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