Growing Old? Screw You!

Trey Smith

It seems that Congress has removed nearly every consumer protection from student loans, including not only standard bankruptcy protections, statutes of limitations, and truth in lending requirements, but protection from usury (excessive interest). Lenders can vary the interest rates, and some borrowers are reporting rates as high as 18-20%. At 20%, debt doubles in just 3-1/2 years; and in 7 years, it quadruples. Congress has also given lenders draconian collection powers to extort not just the original principal and interest on student loans but huge sums in penalties, fees, and collection costs.

The majority of these debts are being imposed on young people, who have a potential 40 years of gainful employment ahead of them to pay the debt off. But a sizable chunk of U.S. student loan debt is held by senior citizens, many of whom are not only unemployed but unemployable. According to the New York Federal Reserve, two million U.S. seniors age 60 and over have student loan debt, on which they owe a collective $36.5 billion; and 11.2 percent of this debt is in default. Almost a third of all student loan debt is held by people aged 40 and over, and 4.2% is held by people over the age of 60. The total student debt is now over $1 trillion, more even than credit card debt. The sum is unsustainable and threatens to be the next debt tsunami.

Some of this debt is for loans taken out years earlier on their own schooling, and some is from co-signing student loans for children or grandchildren. But much of it has been incurred by middle-aged people going back to school in the hope of finding employment in a bad job market. What they have wound up with is something much worse: no job, an exponentially mounting debt that cannot be discharged in bankruptcy, and the prospect of old age without a social security check adequate to survive on. [emphasis added]
~ from Indentured Servitude for Seniors: Social Security Garnished for Student Debts by Ellen Brown ~

Reports like this one anger me to no end. It is upsetting on so many levels. What could be the rationale for allowing student loans to be subject to a 20% interest rate? That's highway robbery! Heck, the mafia doesn't generally charge that much!

But it's the sentence highlighted in bold that really gets my dander up. There are too few jobs to be had and studies have shown that the older a worker is, the harder it is to get hired. So, this whacked out policy only heaps misery on top of more misery.

And here's another thing. Most people who live solely on Social Security ain't rich. Not only are they not rich, they are decidedly poor. So these policies amount to taking blood from a turnip.

How are people supposed to get by these days?