The Debt That’s Robbing Seniors of Their Social Security

I have noticed that applications for many companies are now requiring people to list the locations and dates of elementary and high schools. So they can practice age discrimination even when someone gets a college degree later in life.

http://www.thefiscaltimes.com/Articles/2014/09/22/Debt-s-Robbing-Seniors-Their-Social-Security

By Beth Braverman
Sept. 22, 2014

The Senate failed to vote this week on a bill that would have allowed millions of Americans to refinance their student loans at today’s low rates. Though the bill focuses on providing financial relief to struggling young adults, it turns out millennials aren’t the only ones trying to dig out from crippling mountains of student debt. A growing number of seniors face the same problem.

The amount of student debt held by Americans age 65 and older reached $18.2 billion last year, up from just $2.8 billion in 2005, according to a report out last week from the Government Accountability Office. Even more surprising: More than 80 percent of that debt reflects loans taken for the borrower’s own education, rather than for that of his or her children.

It’s unclear whether those loans are for undergraduate debt taken on during borrowers’ prime education years, or whether they were taken more recently for mid-career training or advanced degrees – data wasn’t available on the age of the loans. Experts suspect it’s the latter, since loans taken decades ago tended to be much smaller.

Financial planners say the increase in older Americans with student loans is impacting those people’s ability to retire as planned. “If you’ve got loan payments, that’s going to impact your quality of life in retirement,” says Fred Armein, a financial planner who’s written a forthcoming book, Financial Aid and Beyond: Secrets to College Affordability.

Senior households are far more likely to have mortgage loans or credit card debt than student loans. But for older people with few assets, student loan debt can be more disruptive than other types because it generally can’t be discharged in bankruptcy.

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Here’s something even more shocking: Over 150,000 Americans had a portion of their Social Security garnished last year to pay down their student loans, according to the GAO report.

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In recent years, a growing number of working adults enrolled in college or graduate school either to gain additional training for career advancement, or to help bolster their credentials after a lay off during the Great Recession.

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Just as traditional college students need to determine if the cost of their dream college makes sense relative to the value of their degree, older adults must also decide whether borrowing money to go back to school is a smart investment. The value of a degree for such students is often less, since they have fewer years of employment to reap its benefits.
[Also, the degree might not help them because of age discrimination.]

“Whether you’re borrowing for yourself or borrowing to help your children go to college, you should borrow no more than you can afford to repay in 10 years or by the time you retire, whichever comes first,” says financial aid expert Mark Kantrowitz, who publishes the education resource site Edvisors Network. If you need to borrow more than that, the school may be too expensive.

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