Older Adults and Student Loan Debt

Consumer protections for student loan borrowers are not just for younger adults who have graduated recently from an undergraduate institution or from a graduate program. Protection from abusive lending practices concerning loans actually extends beyond adults who have gone back to school to complete a degree or to earn an advanced degree. According to a recent article in the Chicago Tribune, many senior citizens are in need of protection from harmful debt collection practices for student loans.
You might be asking yourself, are a lot of elderly residents of Chicago going back to school and taking out loans? In general, the answer to that question is no. Rather, many of the older borrowers who are facing significant student loan debt have taken out the loans for their children and grandchildren. The article refers to this segment of the borrowing population as “the fastest-growing category of student loan debtors.” Do the same protections against unfair and deceptive lending practices apply in these cases? Can seniors with student loans borrowed for their kids and grandkids seek protection under the Fair Debt Collection Practices Act (FDCPA)?
Seniors Student Loan Debt is “Snowballing”
According to the article, the number of seniors who are dealing with student loan debt is “snowballing.” Of those over the age of 60 who are currently facing significant student loan debt, about 27% still have loans as a result of financing their own educations. However, about 68% of those older adults “are working their way through loans they either borrowed or co-signed to help children and grandchildren through college.” About 5% of seniors are dealing with their own student loans in addition to loans for their children or their spouses.
Many of these older borrowers are having difficulty making payment on the loans, and “debt collectors [are] hounding seniors for payments they can’t afford.” Results from a study by researchers at the University of Michigan reported that “39% of consumers age 60 and older with student loan debt had skipped medicines, doctor visits and dental care” in order to afford student loan payments and to avoid being harassed by debt collectors.
Seizing Social Security Income from Older Adults for Student Loans
The Consumer Financial Protection Bureau (CFPB) has also reported that many seniors are having their Social Security income seized for unpaid student loans. In 2015 alone, about 40,000 older borrowers had some of their Social Security income seized “because they were delinquent in paying federal student loans.” About 10 years ago, that number was at 8,700. To be clear, the total number of seniors affected by this practice has risen by more than 30,000.
It is important for senior borrowers to know that the federal government can seize Social Security income for federal student loans, but private lenders are not permitted to do so. This fact is extremely important since seniors report that many debt collectors are “threatening to do just that if missed payments aren’t made up.”
Older adults dealing with student loan debt should also know that the same consumer protections that apply to younger borrowers remain applicable regardless of age.
Seek Advice from an Oak Park Consumer Protection Attorney
If you have been threatened or harassed by a debt collector, an Oak Park consumer protection lawyer may be able to help. Contact the Emerson Law Firm today to speak with an advocate about your case.
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