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The data from the Government Accountability Office (GAO), compiled at the behest of Sens. Claire McCaskill (D-Mo.) and Elizabeth Warren (D-Mass.), showed that people over the age of 50 are the fastest-growing group with student debt, outpacing younger generations—and compared to younger borrowers, older Americans have "considerably higher rates of default on federal student loans." This leaves them open to having up to 15 percent of their benefit payment withheld, in what's called an "offset."
In 2015, the GAO reported (pdf), the Department of Education collected about $171 million in defaulted student loan debt through Social Security offsets from 114,000 people, the majority of that from borrowers aged 50 or older and receiving disability benefits. About 38,000 were above age 64, and more than three-quarters of older borrowers took out the loans to cover their own education, rather than to pay for their children's schooling. The typical monthly offset was slightly more than $140. And more than 70 percent of the money collected through offsets went toward interest and fees, as opposed to the loan balance.
"This report demonstrates just how draconian these Social Security offsets are and how there seems to be a failure at all sorts of levels of this policy," Persis Yu, the director of the Student Loan Borrower Assistance Project at the Boston-based National Consumer Law Center told MarketWatch.
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