Student Loan Borrowers Over 50 Are Losing Social Security Benefits - Association of Certified College Funding Specialists

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Student Loan Borrowers Over 50 Are Losing Social Security Benefits

CCPS®, student loans, Default,

Student Loan Borrowers Over 50 Are Losing Social Security Benefits
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A growing number of older Americans have student loan debt as they near or enter retirement. Compared to younger borrowers, borrowers age 50 and older have considerably higher rates of default on federal student loans. For those who are in default on their student loans, this debt is generally not discharged in bankruptcy, and their Social Security benefits may be reduced to repay this debt.

Under the Treasury Offset Program, the Departments of Education and Treasury coordinate to withhold a portion of an individual’s Social Security retirement or disability benefit to pay off their outstanding federal student loan debt—a process known as administrative offset.

As a matter of fact, 114,000 student loan borrowers over 50-years-old are now losing a portion of their Social Security benefits because of an old student loan, according to the Government Accountability Office. Furthermore, the number of borrowers over age 65 facing this predicament has increased 540% over the last decade.

While the loan is active, the government provides federal student loan borrowers with a variety of options to avoid defaulting on their loans. However, once a borrower defaults, Uncle Sam has incredible powers to collect on the debt, including garnishing Social Security benefits. To make matters worse, this past due debt is so high now that more than 70% of the $1.1 billion collected through Social Security benefits is only applied to fees and interest on those student loans, leaving the principle forever due.

As May approaches and families get all excited about picking their dream college, they also need to be aware of their out-of-pocket cost; especially if they have to borrow money to attend that dream college. You can’t bankrupt loans for education… period. Therefore, before families sign on the bottom line of the admissions application, they should take the time to discuss the process of college planning with a CCPS®). As Benjamin Franklin said, “An ounce of prevention is worth a pound of cure.” 

Here’s the report released by the Government Accountability Office

Here’s a report on how to make the student loan borrowing system better for borrowers released by the Department of Education


Ron Them

Ron developed and trademarked the CCPS® (Certified College Planning Specialist) designation. For over 20 years, the nation's leading financial advisors, broker/dealers, and major media outlets have been using his research, funding strategies, training, and insight. Ron is highly regarded as an expert in the college funding field.

He is a former Chief Financial Officer of a Fortune 500 company and currently owns his own financial advisory company specializing in cash flow planning for business owners and executives. He developed the Cash Flow Recovery™ process that uses cash flow management principals to increase asset value and build wealth for business owners.

He is also the originator of several software calculators to help advisors and families make college affordable, including:

  • College QuikPlan EFC Calculator
  • "Find the Money" College Cash Flow Calculator
  • College Debt Reduction Calculator

Ron has been quoted in U.S. News and World Report, Kiplinger's Personal Finance, Smart Money, Financial Advisor Magazine, Small Firm Profit Report, Practical Accountant, LIMRA's Market Facts, Senior Advisors Magazine, HR Magazine,, Employee Benefit News Magazine,, Entrepreneur Magazine, Insurance Selling Magazine,, The Christian Voice, and Columbus CEO Magazine.


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