The Student Loan Debt Crisis Is Coming Soon To Retirees

Living paycheck to paycheck gets old quickly, and by the time gray hairs appear on your head, it is downright exhausting. When you are in your 50s, you are at your peak earning potential, but try not to dwell on that thought for too long, because it is depressing to think that this month’s paycheck is the biggest one you will ever get. You probably don’t have time to do many mental calculations in your 50s, because you are too busy with the sandwich generation rat race, meeting the constant demands of your elderly parents and your teenage children. Without working out all the math, you console yourself with the expectation that once you retire, not too far in the future, you will have fewer expenses. You will no longer need to commute to work or dry clean work clothes. Medicare will pay some of your healthcare expenses. You can get the senior breakfast at Denny’s and put your extreme couponing skills to work looking for senior discounts at a variety of other places. Your Social Security check may not make you rich, but combined with any other retirement income you have, it will suffice. If you owe students loans, though, lenders may soon help themselves to part of your Social Security check. To find out more about retirement in the shadow of student loan debt, contact an Orlando estate planning lawyer.
Government Announces Plans to Garnish Social Security Checks of Elderly Former Students Who Default on Student Loans
When student loan collections resumed after the pandemic pause, recent college graduates were not the only ones who felt a sense of dread. More seniors owe student loan debt than you might imagine. Students above the age of 30 are more likely to borrow student loans because they are less likely to have their parents contribute to the portion of their tuition not covered by scholarships or financial aid. Given the decades-long repayment terms for federal student loans, it is possible to still owe money on your student loans when you become eligible to draw Social Security benefits at age 62.
Parent PLUS borrowers represent a large contingent of Social Security beneficiaries who still owe student loans. These borrowers were old enough to have a child in college when they incurred the loans, so many of them are still paying when they start drawing Social Security.
Starting in June 2025, the federal government will garnish the Social Security checks of Social Security beneficiaries whose student loans are in default. The maximum amount they can garnish is 15 percent of each Social Security check.
Contact Gierach and Gierach About a Lean Retirement From the Life of the Mind
An estate planning lawyer can help you make realistic plans for retirement if you still owe money on your student loans even after you have retired and started drawing Social Security. Contact Gierach and Gierach, P.A. in Orlando, Florida to discuss your case.
Source:
cnbc.com/2025/05/14/social-security-benefits-at-risk-for-defaulted-student-loan-borrowers.html