Just when we think we can’t take any more bad news about student loans we are now finding out that senior citizens are becoming overwhelmed with student loan debt. Not their own student loan debt, necessarily, but rather student loans that they either borrowed themselves, such as a parent-plus loan, or may have cosigned with their children and even grandchildren.
Senior citizens who may want to retire and even have retired are now making the tough choices of not buying medicines, going to the doctor or dentist or giving up other important necessities in order to try and pay student loan debt that they are now strapped with. If they have retired and are now on a fixed income, the difficulties greatly increase as these citizens are being hounded by student loan collectors for monthly payments.
Statistics have shown that as recently as 2015, the government seized at least some Social Security income from approximately 40,000 borrowers because of their delinquency in student repayment. Unfortunately, as alarming as this is, when a person is delinquent in the repayment of a federal student loan, the government can seize money from paychecks as well as Social Security! However, private lenders CANNOT take Social Security money from seniors. Even so, the Consumer Financial Protection Bureau (CFPB) has received numerous reports of debt collectors threatening to seize Social Security funds if delinquent payments are not caught up.
Society puts a great deal of emphasis on higher education for everyone. Although getting a college education is certainly commendable, it is not necessarily for everyone. I recommend the following important factors before signing the dotted line for a student loan and especially if you are going to sign as a cosigner (no matter the amount):
- Understand that once you sign for the loan, whether the courses are completed or not, whether the degree is awarded or not, the student loan will be due and payable at some point in time.
- Although society says “get a degree,” count the cost and discuss with the student, commitment level verses the cost. It may be a good idea for the person to work for a year after graduating high school. Speaking from experience, being in the work force and paying for my education caused me to have a much greater appreciation of the cost of it.
- Many parents and even grandparents I have consulted with over the years feel that they have a “responsibility” to pay for their child’s or grandchild’s education, when they don’t. It is the child’s responsibility to determine their future and make their way in that determination. My mother struggled to pay for me to be away at college and after the first semester (of not being focused, etc.), she drew the line and told me if I wanted to go to school, I would have to find a way to pay for it. I’m so thankful, many years later, that she took that stand because of the life lessons that I learned from that experience.
- If you have incurred student loans and are struggling to make payments due to a change in income (such as retirement and receiving Social Security) lower payments must be provided by the servicer.
Regardless of what kind of debt you have, please contact one of our offices to schedule a free consultation with an attorney to discuss solutions. We are here to help you.