When your Social Security check disappears because of an old student loan

Discussion in 'Off-Topic Discussions' started by decimon, Dec 20, 2016.

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  1. decimon

    decimon Active Member

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    Market Watch
    Jillian Berman
    June 25, 2015

    Naomia Davis hasn’t been able to talk on the phone since 2004. The 80-year-old Brooklynite was diagnosed with Alzheimer’s more than 10 years ago and can no longer read.

    Despite all of this, the government still expects her to pay back a federal student loan she took out in the 1980s to attend cosmetology school. And so every month, $134 of the $894 Davis gets in Social Security—her only income, except for Medicaid—is garnished by the government and put toward paying back her debt.

    >

    Davis’s story isn’t unique. In 2013, the government garnished about $150 million in Social Security benefits from Americans to pay back their student loans, according to a September analysis from the Government Accountability Office. Between 2002 and 2013, the number of senior citizens losing out on a portion of their Social Security to pay back education debt soared 500% from 6,000 to 36,000.

    More... When your Social Security check disappears because of an old student loan - MarketWatch


    I didn't see this topic in a site search.
     
  2. Johann

    Johann Active Member

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    Not surprising. It's been mentioned before but never, as far as I know, has the topic had its own thread. It's certainly time.

    It's barbaric that this could occur in a supposedly civilized country. There's a time to give up, and in this case - it's long past. I'm not sure whether or not this could occur in Canada. I know there's a recent change, in that Old Age and Canada pensions can be withheld in entirety from those serving jail sentences longer than 90 days. That stems from the discovery that the late multiple child-slayer, Clifford Olson, was receiving about $1,100 a month while in jail for life.

    Story is here: http://www.theglobeandmail.com/news/politics/ottawa-notebook/harper-cuts-clifford-olsons-government-pension-payments/article617579/

    I'm sure there's a procedure for requesting attachment of Federal funds and that in the case of a student loan, any collection agency would consider invoking it. Would it succeed? I don't know. Unlike in the US, there is hope of discharging a student loan through bankruptcy. A minimum of ten years since leaving school must have passed and the decision is made for each individual case by a bankruptcy judge. All, some, or none of the debt may be discharged, as per the judge's ruling.

    J.
     
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  3. Johann

    Johann Active Member

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    It gets worse - when they make dead people (or their relatives) pay. Here's one example:

    After daughter

    J.
     
  4. Life Long Learning

    Life Long Learning Member

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    Why should I be responsible for my debts?
     
  5. Johann

    Johann Active Member

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    Let's stick with practical reasons. I'm not a moralist.

    If you do repay your debts as agreed, you'll have the opportunity to borrow again. Perhaps when you have a really pressing need, or a really advantageous purpose, e.g. buying a home.

    If you don't - you wont.

    J.

    Won't pay? Shooting yourself in the foot. Can't pay? Sh*! happens. Your job - try to minimize or get out of sh*! as best and as quickly as possible, so you can resume payments. Pragmatic approach. Unfortunately, sometimes major sh*! is unavoidable and comes home to roost. Then, what can you do? Not much. But you should at least keep your creditors posted.
     
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  6. SteveFoerster

    SteveFoerster Resident Gadfly

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    That's why there's bankruptcy, why it's a big deal to use it and should be, but also why student loans shouldn't be exempt from it.
     
  7. Johann

    Johann Active Member

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    Well-said, Steve! 100% in agreement.

    Confession: I was a bill-collector for much of my work life. Retired since 1993. I know how this stuff works - at least here, where I live.

    J.
     
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  8. decimon

    decimon Active Member

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    People should at least know what they are getting into before selling their souls for a sheepskin.
     
  9. decimon

    decimon Active Member

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    Behind this all, IMO, is a 19th Century mode of education being doggedly pursued today. And, IMO, the mangy dog behind it all is government "aid" that locks in place what would otherwise have been displaced through innovation.
     
  10. Ted Heiks

    Ted Heiks Moderator and Distinguished Senior Member

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    The parents co-signed.
     
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  11. Johann

    Johann Active Member

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    Yes, they did, Ted. And they lost their daughter to illness at 25. Don't they have enough to live with -without impoverishment of this sort? Add to that the fact that someone can piss away their resources on fancy cars, jewellery and ridiculous luxury items and have the debts discharged in bankruptcy, whereas the folks we mention here can't get out from under student debt - their own or their dead children's... Well, that's sad -at least I think it is.

    Here in Canada, they might stand a chance, depending on how a bankruptcy judge viewed the situation. I won't open the health care or gun control cans of worms again, but this is a pretty damn good place to live, sometimes, despite the weather, the worthless money and the national obsessions - poutine, hockey and Céline Dion.

    J.
     
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  12. Jan

    Jan Member

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    The example of the woman with Alzheimers whose social security checks have been reduced due to not paying her outstanding loans is very sad. I hope that she is able to obtain assistance to dispute this loss of income.

    Unfortunately, the issue of not repaying governmental loans for school, in innumerable cases, is unjustified, having nothing to do with physical/neurological incapacity or disability, but to feelings of entitlement! When students initially agree to repay their loans, and then renege, they are obligated to honor their agreements. Unfortunately, the mindset that one does not have to comply with their agreements is very commonplace with many young people, who are under the illusion that society/government is responsible for their debts, personal success or failures. This has reached a "critical mass", which will result in many of these students being in for major life disappointments as adults when they discover that they will be held accountable for not fulfilling their agreements or achieving success in life, not their parents or government.
     
  13. SteveFoerster

    SteveFoerster Resident Gadfly

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    I think there are quite a few students who are misled by admissions salespeople to expect more success right out of the gate than than any knowledgeable person would find reasonable. On the one hand, yes, caveat emptor, but on the other hand I'm a lot less sympathetic to lenders who know full well they're violating Wheaton's Law.
     
  14. b4cz28

    b4cz28 New Member

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    I'm torn because I was raised to pay my bills and not paying them off seems wrong. Secondly she must have never paid them for something still to be owed from the 1980's. Even turds get sick and old.

    I also don't expect ss to cover my bills and we save what little we can. $800 tells me she was not employed for much of her life.

    I did not read the article.
     
  15. b4cz28

    b4cz28 New Member

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    I was one of those people. Things are changing thank God. I was flat out lied to about the first school I attended accreditation.
     
  16. Ted Heiks

    Ted Heiks Moderator and Distinguished Senior Member

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    If you don't want to get stuck with junior's student loan bill, don't co-sign.
     
  17. cookderosa

    cookderosa Resident Chef

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    Exactly, and I'm not a cold-hearted-blankety-blank. Being older than your incurred debt isn't a reason that you shouldn't have to pay.

    I don't think the cautionary tales prevent anyone from borrowing - mainly because everyone feels like an exception. Didn't we once upon a time have a thread here about the largest growing segment of student loan default being senior citizens?

    Guaranteed govt-backed student loans give average people all the rope they need. Like the housing bubble that burst because lenders lent money to everyone - we should expect a similar consequences in student loan borrowing.
     
  18. decimon

    decimon Active Member

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    Into the 1960s, you had to be deemed credit worthy to be granted a credit card. I was twice turned down. Having to be credit worthy was ruled discriminatory so the policy changed to what we have now.
     
  19. SteveFoerster

    SteveFoerster Resident Gadfly

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    Um, in 2016, you still get turned down for credit cards if your credit score is low.
     
  20. TomE

    TomE New Member

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    Yeah, CC definitely turn people down. However, I think the discriminatory law does apply to some aspects of loan/credit installments, etc. The way around it is to "Approve" just about everyone, although people with low credit probably aren't going to like that 40% interest rate!
     

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