Student Loans Plague Senior Citizens

Some senior citizens face an alarming amount of student loan debt. As a result, those already on a limited fixed income are facing even greater financial stress. A recent article in Money magazine detailed this trend in the student loan universe. Money reports that “over the past decade, people over the age of 60 had the fastest growing educational loan balances of any age group, according to the Federal Reserve Bank of New York.”

Facing student loan debt as you enter retirement is daunting, and yet this population accounts for approximately $58 billion of the total student loan debt in the United States. For these unhappy borrowers, a percentage of tax refunds, wages, and Social Security can all be garnished to collect on federal student loans. In a household with a fixed income, this can be devastating.

Philadelphia’s own Joanna Darcus of Community Legal Services works with low income clients facing student loan debt. She stated that her clients viewed education as “a pathway out of poverty and toward financial stability, but their reality is much different from that,” As Money reports.

While there are government initiatives to ease student loan debt by providing income based repayment plans and the option to discharge federal student loan debt in bankruptcy, it is unclear how this will affect older borrowers.

Retirement should be a time when a lifetime of work is rewarded. Instead, a growing number of people are faced with a debt that is crippling their ability to meet basic needs.


RG-3Rachel Gallegos

Lead Consumer Advocate, Steve Harvey Law



Photo credit: CREATISTA/

Student Loan Revolt: What Happens If I Don’t Pay?

A recent New York Times op-ed piece discussed one man’s decision to not pay back his student loans. It seems a growing number of graduates are choosing to follow suit. The reasons vary, but regardless of the justification there are still consequences, and ultimately graduates must make an informed choice.

There is certainly a moral debate to be had about whether a graduate is entitled to refuse to pay back what they promised to borrow, but what are the actual ramifications of simply refusing to pay, and more specifically, not seeking out any discharge options either?

Refusing to pay your student loans means facing lifelong financial ramifications in virtually every area of your life. Defaults on student loans are reported to the credit bureaus, and as a result, your credit score will be negatively affected. A negative credit score can affect your ability to start your own business, obtain a job, rent an apartment, or buy a house.

In addition, when you refuse to pay your loans, both federal and private lenders will attempt to collect the debt. You will face endless calls from collection agencies attempting to extract payments, and the cost of the collection can be added to your outstanding balance. Further, the Education Department can withhold money from your tax refund, social security, and other federal payments in an effort to collect on this debt.

Both federal and private lenders also have the option to garnish wages. The federal government does not need a judgment to garnish wages, but a private lender must initiate a lawsuit in order to proceed with garnishment.

While refusing to pay your student loans certainly is your choice, the consequences of that choice will be far reaching, making it incredibly difficult to lead a financially stable life.


RG-3Rachel Gallegos

Lead Consumer Advocate, Steve Harvey Law