Why Older Americans Need Student Loan Help

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    Why Older Americans Need Student Loan Help

    "Consider the case of a retiree whose income is limited to only her $1,165 monthly Social Security check, which is the median Social Security benefit for an older consumer that depends on Social Security for all of her income. If this retiree has defaulted on a federal student loan, the government can deduct or 'offset' $60 from her monthly Social Security benefit, reducing her annual income to $13,240."

    However, by rehabilitating or consolidating her defaulted student loans, this same borrower would no longer be subject to the Social Security offset and would also become eligible for an income-driven repayment plan. Given her low income, the [income-driven repayment] payment formula would set her monthly payment amount to $0.”