Lawmakers call for an end to practices that put millions of seniors at risk of losing Social Security benefits due to student loans

Democratic lawmakers, yes calling Biden administration to protect millions of older Americans from the risk of losing some Social Security benefits due to student loan defaults.

According to the most recent report from Consumer Financial Protection Bureaualmost 40% of borrowers aged 65 and over default on student loans. Federal programs reminiscent of State Treasury Offset Program (TOP), allow the federal government to collect tax and profit refunds from individuals with outstanding student loans, including Social Security. This means seniors could lose up to $2,500 in Social Security benefits per yr.

Democratic lawmakers including Senators Elizabeth Warren and Ron Wyden, together with Representatives Ayanna Pressley, Pramila Jayapal, Raúl Grijalva and John Larson, led the relief effort in a letter shared on March 19.

Lawmakers cited data from the think tank New America, which shows that greater than 3.5 million Americans aged 60 and older have student loan debt totaling greater than $125 billion.

In a letter to the Social Security Administration, the Department of Treasury and the Department of Education, they expressed concerns that “older borrowers are disproportionately targeted for TOP collections.”

Lawmakers said this system allows it to withhold up to 15% of your monthly federal government benefits, including Social Security and disability benefits.

They also noted that “approximately 44 percent of borrowers who were 50 years of age or older at the time of initial withholding were subject to the maximum Social Security benefit withholding.”

According to USA today, The number of older Americans with federal student loan debt has increased significantly over time, with the number of borrowers age 60 and older increasing sixfold since 2004.. The debt of this demographic group has also increased significantly.

While the Biden administration has provided significant aid to student loan borrowers, including canceling billions of dollars in student loans, lawmakers are calling for additional motion to protect older Americans from losing Social Security benefits because of this federal policy.