Who knew your social security could be garnished for student loan debt? Under the radar is right. From CBS MoneyWatch.
One of the growing threats to a comfortable retirement -- other than not saving enough -- is being hobbled by college loans in your seventh decade.
Although student debt mostly flies under the radar for retirees, it has become a problem because debt collectors can garnish Social Security payments.
According to a recent study by the Government Accountability Office, this debt can force retirees dependent upon Social Security into poverty.
Since college loans can be discharged in court only in cases of serious disability, they can follow you the rest of your life. That’s also the case for those who co-sign for debt. Parents and grandparents who want themselves or family members to earn a college degree can get trapped in student debt during their most vulnerable times. Doing the right thing can be a financial disaster.
College loans taken on by older Americans have nearly quadrupled in the past decade, reports the Consumer Financial Protection Bureau (CFPB). Parents and grandparents have assumed about $67 billion of this debt, most of it held by those over 60. Some 40 percent of these borrowers are in default, the highest nonpayment rate for any age group.