While many studies report about the burden of student loan debt on Millennials and how this may affect their retirement savings, an Aon Hewitt study found student loan debt and the associated consequences are issues that span generations, with 44% of Millennials reporting having student loans along with 26% of Generation Xers and 13% of Baby Boomers.
Now, a report from the Government Accountability Office confirms that student loan debt can follow Americans into retirement and affect their retirement income.
GAO says older Americans—those in or approaching retirement—and other borrowers who default on their federal student loans are subject to a number of actions to recover outstanding debt, including Social Security offsets. In fiscal year 2015, 49.7% of collections of defaulted student loan debt was generated from offsets of federal payments through the Treasury Offset Program, including but not limited to Social Security offsets.
GAO’s analysis of data from Education, Treasury, and the Social Security Administration (SSA) shows that the number of borrowers, especially older borrowers, who have experienced offsets of Social Security benefits to repay defaulted federal student loans has increased over time. From fiscal years 2002 through 2015, the number of defaulted federal student loan borrowers of any age with Social Security offsets increased from about 36,000 to 173,000. NEXT: Student loan offsets bite into retirement income