NEW YORK (AP) — Christine Farro, a 73-year-old retired child welfare worker in Santa Ynez, California, has drastically reduced her expenses to live on a tight budget. However, her financial situation is about to worsen as the Trump administration resumes collections on defaulted student loans. This move affects hundreds of thousands of older Americans whose decades-old debts now put them at risk of having their Social Security checks garnished.
Farro’s loans date back 40 years, and despite working long hours and weekends, she was unable to pay them off. Her debt ballooned to $250,000 due to missed payments and accumulated interest. When she sought help, the loan company suggested she move to a cheaper state, which was not feasible for her.
Student loan debt among older people has grown significantly, partly due to rising tuition costs. People aged 60 and older hold an estimated $125 billion in student loans, a six-fold increase from 20 years ago. This has led to a 3,000% increase in Social Security beneficiaries who have had their payments garnished.
This year, an estimated 452,000 people aged 62 and older are likely to experience the Department of Education’s renewed forced collections. Debbie McIntyre, a 62-year-old adult education teacher in Georgetown, Kentucky, is among them. She dreams of retiring but fears garnishment will make it impossible.
Braxton Brewington of the Debt Collective says many older people should have had their debts canceled but fell victim to a flawed system. For those subject to garnishment, the results can be devastating, leading some to skip meals or dilute medication.
Collections on defaulted loans may have restarted regardless of the president, though the Biden administration sought to limit garnishment amounts. Federal law protects only $750 of Social Security benefits from garnishment, leaving debtors far below the poverty line.
Linda Hilton, a 76-year-old retired office worker from Apache Junction, Arizona, survived garnishment before the pandemic and expects to endure it again. However, she anticipates restrictions on travel and other pleasures of retired life.
Some debtors have already received notices about collections, while many more live in fear. President Donald Trump signed an executive order calling for the Department of Education’s dismantling, complicating loan inquiries due to mass layoffs.
Even some of Trump’s supporters question this move that will make their lives harder. Randall Countryman, 55, of Bonita, California, supported Trump but wishes the government made case-by-case decisions on debtors. He thinks Americans don’t realize how many older people are affected by student loan policies.
Countryman started working on a degree while in prison and continued at the University of Phoenix upon release. He never finished his degree and is unsure how he’d manage if the government demands repayment.
— new from PBS