Democratic lawmakers are calling on the Biden administration to protect millions of older Americans at risk of losing some of their Social Security benefits because they defaulted on their student loans.
According to a recent report from The Consumer Financial Protection Bureau, nearly 40% of borrowers aged 65 or older are in default on their student loans. Federal programs, such as the Treasury Offset Program (TOP), allow the government to collect tax refunds and benefits from those with outstanding student loans, including Social Security. This means that seniors could lose up to $2,500 in Social Security benefits annually.
Democratic lawmakers, including Senators Elizabeth Warren and Ron Wyden, along with Representatives Ayanna Pressley, Pramila Jayapal, Raúl Grijalva, and John Larson, led the effort for help in a letter shared on March 19.
The lawmakers cited data from the think tank New America, showing that more than 3.5 million Americans aged 60 and above hold student loan debt, amounting to over $125 billion collectively.
In the letter addressed to the Social Security Administration, Treasury Department, and Education Department, they expressed concerns that “older borrowers are disproportionately subject to TOP collection.”
Legislators said the program allows for up to 15% of monthly federal government benefits, including Social Security and disability payments, to be withheld.
They also noted that “roughly 44 percent of borrowers who were 50 years and older at the time of their initial offset were subject to this maximum Social Security benefit withholding.”
According to USA Today, the number of older Americans with federal student loan debt has increased significantly over the years, with borrowers aged 60 or above growing six-fold since 2004. The outstanding debt of this demographic has also increased substantially.
While the Biden administration has provided significant relief for student loan borrowers, including canceling billions of dollars in student loans, lawmakers are calling for additional action to protect older Americans from losing their Social Security benefits because of this federal policy.
