New York (AP) – Christine Farro reduced the gifts she sends to her grandchildren on their birthdays, and she pushed two cats and a dog for their blows. All his clothes come from thrift stores and most of his vegetables come from his garden. At 73, she reduced her costs as much as she can to live with a tight budget.
But he is about to become much tighter.
While the Trump administration takes up collections on default student loans, a surprising population has been taken in the reticle: hundreds of thousands of older Americans whose old debts of several decades now put them at risk of garnishing their social security checks.
“I worked ridiculous hours. I worked on weekends and nights. But I could never reimburse him, ”explains Farro, a retired child protection worker in Santa Ynez, California.
As millions of debtors with federal student loans, Farro paused and its interests for the government five years ago when the pandemic pushed many financial difficulties. This period of grace ended in 2023 and, earlier this month, the Ministry of Education declared that it would restart “involuntary collections” by garnishing payroll checks, tax reimbursements and retirement and social security invalidity services. Farro had previously garnished her social security and expects to restart.
Farro loans go back 40 years. She was a single mother when she obtained a baccalaureate in development psychology and when she discovered that she could not win enough to reimburse her loans, she returned to school and obtained a master’s degree. His salary has never caught up. Things only worse.
Around 2008, when she consolidated her loans, she paid $ 1,000 a month, but years of missed payments and stacked interest meant that she barely put a bump in an invoice that had climbed to $ 250,000. When she asked for help to resolve her debt, she says that the loan company had only one suggestion.
“They said:” Moving in a cheaper state, “explains Farro, who rents a 400 square feet of a friend. “I realized that I lived in a reality different from them.”
WATCH: Student loan debts collections to resume for default borrowers
Student loan debt among the elderly has increased at an astonishing rate, partly due to the increase in tuition fees that forced more people to borrow larger sums. People 60 and over hold around $ 125 billion in student loans, according to the National Consumer Law Center, an increase of six times compared to 20 years.
This led the beneficiaries of Social Security who had their payments garnished with 3,000% – against around 6,200 beneficiaries at 192,300 – between 2001 and 2019, according to the Consumer Financial Protection Bureau.
This year, around 452,000 people aged 62 and over had default student loans and are likely to discover the renewed forced collections of the Ministry of Education, according to the January CFPB report.
Debbie McIntyre, a 62 -year -old teacher for adults in Georgetown, Kentucky, is one of them. She dreams of retiring and writing more historical fiction and getting on an airplane for the first time from high school. But her husband has been without work on handicap for two decades and they have used credit cards to manage on her big advantages and her pay check. Their rent will be increased by $ 300 when their lease will be renewed. McIntyre does not know what to do if his pay check is garnished.
It floats the idea of bankruptcy, but that will not automatically erase its loans, which are bound to a standard different from the debt of others. She thinks that if she collects additional jobs to do babysitting or tutoring, she could put $ 50 to her loans here and there. But she does not see a real solution.
“I don’t know what I can do more,” explains McIntyre, who is too afraid to check what is the balance of his loan. “I will never get out of this hole.”
Braxton Brewington of the Union of Collective Debtors of Debt says that it is striking in the number of elderly people who make up the organization’s calls and attend its manifestations. Many of them, he said, should have canceled their debts, but have been victims of a system “riddled with defects and illegalities and dynamists”. Many whose studies have left them in late debt have, in fact, reimbursed the principal on their loans, sometimes several times, but still owes more to interest and costs.
For those who are subject to seizure, says Brewington, the results can be devastating.
“We hear people who jump meals. We know people who dilute their drugs or cut their pills in two. People take drastic measures like withdrawing all their savings or dissolving their 401K, ”he says. “We know people who have been taken into homelessness.”
The collections on loans failing that may have restarted, it does not matter who was president, although the Biden administration has sought to limit the amount of income that could be garnished. The federal law only protects $ 750 from social security services from the seizure, an amount that would put a debtor below the poverty line.
“We mainly offer people federal advantages of one hand and take them out with another,” said Sarah Sattelmeyer of the New America Think Tank.
Linda Hilton, a 76-year-old retirement office worker from Apache Junction, Arizona, has gone through the Covid before seizure and says she will survive it again. But thefts to see her children, occasional meals in a restaurant and other pleasures of retirement can disappear.
“This will mean restrictions,” says Hilton. “There will be no trip. There will be no frills.”
Some debtors have already received an opinion on the collections. Many others live in fear. President Donald Trump has signed an executive decree calling for the dismantling of the Ministry of Education and, for those looking for answers on their loans, mass layoffs have complicated the response to calls.
While the Secretary of Education, Linda McMahon, says that the restart of collections is a necessary step for debtors “both for their own financial health and the economic prospects of our country”, even some of Trump’s most fervent supporters question a decision that will make their lives more difficult.
Randall Countryman, 55, from Bonita, California, said that a Biden administration proposal to forgive student debt did not do it as just, but he is not sure either of Trump’s approach. He supported Trump but hoped that the government will make decisions on a case -by -case basis on debtors. Countryman thinks that Americans do not realize how many elderly people are affected by students on student loans, often considered as young people, and how difficult it can be to reimburse.
“What is the problem of a young person today,” he says, “is the problem of an elderly person tomorrow.”
Countryman started working on a diploma in prison, then continued it at the University of Phoenix during his release. He started to become nervous as he accumulated loan debt and never finished his diploma. He worked a multitude of different jobs, but finding work has often been complicated by his criminal record.
He saw the control of his wife’s social security and the kindness of his mother-in-law. He does not know how they were getting out if the government requests the reimbursement.
“I somehow wish that I have never been to school in the first place,” he said.
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