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February 01, 2021 at 09:43 AM
(Photo: VP Brothers/Shutterstock)
Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Elizabeth Warren, D-Mass., are calling on President Joe Biden and Vice President Kamala Harris to cancel up to $50,000 in federal student loan debt by executive order.
In a recent CNBC op-ed, the senators use a relatively novel argument, tying student loan debt to the plight of borrowers 50 and older.
About 6.3 million of the more than 43 million student loan borrowers are age 50 to 64, and 1 million are over age 65, according to the senators. Together these two groups account for $290 billion, or about 19%, of the total federal student loan debt burden.
“Like the massive debt burden on younger Americans, trying to balance this mountain of student debt inevitably drags our seniors down, too,” according to the senators.
Thirty-seven percent of Americans over 65 with federal student loans are in default, which allows for the federal government to garnish up to 15% of their monthly Social Security checks, according to AARP.
“The federal government has turned its back on Americas young and old with student loan debt, “ write the senators. “The system failed them, and today, they’re drowning in debt when they should be experiencing retirement security in their golden years.”
If they can’t pay their debt, the Social Security Administration can garnish their Social Security benefits and almost three-quarters of those garnishments were applied toward student loan fees and interest, and not principal, according to the two senators.
“No older person should have to make life-altering decisions between paying their student loan payment, putting food on the table, or keeping themselves and their families safe and healthy, especially during this public health crisis … ,” wrote the senators. “And they definitely shouldn’t have their hard-earned Social Security stripped from them.”
What Older Borrowers Owe
A new report from the Employee Benefit Research Institute found that 15% of households headed by someone 55 and older have student loan debt, and their debt levels had grown 321% since 1992. Close to half the debt was for their own education, about 44% was for their children, and the remaining debt was for both.
