Government doing something right.....For Unpaid College Loans, Feds Dock Social Security

Good job here....


For Unpaid College Loans, Feds Dock Social Security
More retirees are falling behind on student debt, and Uncle Sam is coming after their benefits.

By ANNAMARIA ANDRIOTIS

The Department of Education, which provides federal student loans to borrowers, say it tries to work out payment plans with people who fall behind on their loans. Justin Hamilton, a spokesman for the department, says that accounts aren't sent off to collections until almost two years of non-payment; if collection doesn't yield results, the loan balance goes to the Treasury Department, which can reduce Social Security checks. "It's when people aren't making any attempt whatsoever [to pay] that they start heading down that road," Hamilton says.

For its part, the Treasury Department says it reaches out to borrowers twice to set up a payment plan or otherwise resolve their debt before offsetting money from their Social Security check. And the Treasury won't withhold money from monthly checks that total $750 or less, says Ronda Kent, deputy assistant commissioner for debt management services at the Treasury Department's Financial Management Service.

Advocates of the borrowers say many of them have extenuating circumstances. In many cases, they say, family agreements unravel for instance, adult children who tell their parents they'll repay the loan end up dropping the ball without informing them. There can also be breakdowns in bureaucratic paper shuffling, says Mark Kantrowitz, publisher of FinAid.org, a student-loan tracker. In some cases the Department of Education loses track of the borrower, sending debt notices to the wrong addresses; sometimes, says Kantrowitz, the government can't track down the borrowers until they begin receiving Social Security.

Student-loan experts say that changes in payment plans are partly to blame for why an aging population is still dealing with college loans. The repayment period on federal student loans can be extended to 30 years, Kantrowitz notes, if borrowers owe $60,000 or more. Another eight years can be added on for borrowers facing unemployment or other economic hardship; during those years, payments aren't required but interest accrues.

Compared to present-day retirees, younger generations are in deeper debt, which means stories of Social Security garnishment could become more commonplace when they enter retirement. Borrowers in their 20s and 30s owe roughly $600 billion, according to the New York Fed. They're also leaving college with more debt than their predecessors: Sixty-six percent graduated this spring with debt, and their student loans averaging $28,720, up from $9,320 in 1993, according to FinAid.org. "It's entirely possible that the way student loan debt is growing, this could get worse," says Rich Williams, higher education advocate at the U.S. Public Interest Research Group, a nonprofit consumer group.

for more;

http://www.smartmoney.com/borrow/st...financial-problem-college-debt-1344292084111/

Why does the government want some seniors to live in poverty?

How old are these college debts??? Geez.