Indentured servitude for seniors: Social Security garnished for student debts

May 16th, 2012

Published on Intrepid Report, by Ellen Brown, May 15, 2012.

The Social Security program . . . represents our commitment as a society to the belief that workers should not live in dread that a disability, death, or old age could leave them or their families destitute.”—President Jimmy Carter, December 20, 1977. “[This law] assures the elderly that America will always keep the promises made in troubled times a half century ago . . . [The Social Security Amendments of 1983 are] a monument to the spirit of compassion and commitment that unites us as a people.”—President Ronald Reagan, April 20, 1983. 

So said Presidents Carter and Regan, but that was before 1996, when Congress voted to allow federal agencies to offset portions of Social Security payments to collect debts owed to those agencies. (31 U.S.C. §3716). Now we read of horror stories like this:

  • I’m a 68-year-old grandma of 2 young grandchildren. I went to college to upgrade my employment status in 1998 or 1999. I finished in 2000 and at that time had a student loan balance of about 3500.00.
  • Could not find a job and had to request forbearance to carry me. Over the years I forgot about the loan, dealt with poor health, had brain surgery in 2006 and the collection agents decided to collect for the loan in 2008.
  • At no time during the 6–7 year gap did anyone remind me or let me know that I could make a minimum payment on the loan. Now that I am on Social Security (have been since I was 62), they have decided to garnishee my SS check to the tune of 15%.
  • I have not been employed since 2004 and have the two dependents . . . I don’t dispute that I owed them the $3500.00 but am wondering why they let it build up to somewhere around $17,000/20,000 before they attempted to collect.

Her debt went from $,500 to over $17,000 in 10 years?! How could that be? … //

… For students, at the very least the bankruptcy option needs to be reinstated, usury laws restored, predatory practices eliminated, and the cost of education brought back down to earth. One possibility for relieving the burden on students would be to give them interest-free loans. The government of New Zealand now offers 0% loans to New Zealand students, with repayment to be made from their income after they graduate. For the past twenty years, the Australian government has also successfully funded students by giving out what are in effect interest-free loans. The loans in the Australian Higher Education Loan Programme (or HELP) do not bear interest, but the government gets back more than it lends, because the principal is indexed to the Consumer Price Index (CPI), which goes up every year.

Predatory lenders are keeping us in debt peonage through misguided economics and bank-captured legislators. We have people who desperately want to work, to the point of going back to school to try to improve their chances; and we have mountains of work that needs to be done. The only thing keeping them apart is that artificial constraint called “money,” which we have allowed to be created by banks and let out at interest when it could have been created by public institutions for public purposes, either by direct issuance or through publicly-owned banks. We just need to recognize our oppressors and throw off their yoke, and the good times can roll again.
(full long text).

Comments are closed.