The increasing cost of college has led Americans to carry more student debt than before. Older adults may have taken out student loans to finance their own education or to support younger family members. Some returned to school midway through their careers. Others took out loans for their children.

Although Americans are carrying more student debt than before, older borrowers may have been particularly affected by changes to loan terms. Unlike students, parents face no lifetime limit on how much they can take out in federal loans, and private lenders, like banks, have increasingly required that a student’s loans be co-signed by someone with good credit. The result: Older adults are not just paying off loans for themselves, but may be drowning under debt they are carrying for their children.

More flexible repayment options, like income-based plans, also were not available to federal student loan holders before the 1990s.

An Education Department spokesperson said a 1996 debt collection act requires the agency to refer defaulted student loans for “offset,” the practice of diverting Social Security payments or tax refunds to repay government debts. The department will first give borrowers a 65-day warning and tell them they can avoid offset by entering into a “reasonable and affordable” repayment plan or proving that their debt is unenforceable.

Compelled collection

Joanna Darcus, an attorney for the National Consumer Law Center, said homeowners subject to Social Security offsets may be unable to modify their mortgages—a process that can forestall eviction or foreclosure—due to loss of income. She said she has also seen bad credit from student loans hurt borrowers’ prospects for getting affordable or subsidized senior housing.

“The federal government’s powers to collect student loan debt are very strong,” Darcus said, “stronger than the powers that the government has or employs to collect other types of government debt.”

The government can withhold federal income tax refunds and garnish up to 15% of a borrower’s take-home pay or Social Security benefits. The benefits cannot drop below $750 a month, a threshold set in the 1990s that is now below the federal poverty level. Fees are also charged each time a tax refund or Social Security check is offset.

Legislation has been introduced in Congress to eliminate Social Security offsets for student loan debt or to tie the amount withheld to inflation. Those bills have not passed, and this year, student loan advocates and lawyers said they have noticed an uptick in how aggressively the government is going after debtors’ Social Security benefits.

The Education Department spokesperson said the agency redesigned its processes related to offset last year to “fully comply” with the 1996 debt collection act, and that led to a significant increase in the number of borrowers subject to the withholdings.

Americans hold some $1.5 trillion worth of college debt, most concentrated in the hands of those under 50 years old. But the ranks of older borrowers—those 60 and older—swelled from 700,000 in 2005 to 2.8 million people in 2018, and their debt load went from $8.2 billion to $66.7 billion, an eightfold increase, according to data from Equifax and the Federal Reserve Bank of New York Consumer Credit Panel.

In 2017, about 222,144 Texans ages 60 and over had student loan debt, carrying a median load of $15,754, per a Consumer Financial Protection Bureau report. Government data shows the Education Department referred more than 10.81 million debtors to the Treasury Department during the last decade, but it does not specify if those people ultimately had payments garnished.

The nonprofit Trellis Company, which was the state’s guarantor for a federal loan program that ended in 2010, declined to provide statistics about how many older borrowers were in its portfolio or the number of them in default. A spokesperson, Bryan Gilbert, explained the organization’s data would not be helpful and could actually be misleading given the small size of its loan portfolio relative to the number of retirement-age borrowers in Texas and across the country.

‘It doesn’t compare’

There are ways to have federal student loan debt wiped away. A borrower can submit documentation that shows he or she is “totally and permanently disabled” and request a discharge. The U.S. Department of Education has steered borrowers receiving Social Security disability benefits to this option since 2016, and in August, President Donald Trump signed an executive order automatically forgiving the debt of permanently disabled veterans. But that avenue is not available to able-bodied borrowers.

“It doesn’t compare,” said bankruptcy attorney Steven Palmer. “This is the one main type of consumer debt that ... you just can’t get out of.”

Taxes, medical debt, mortgages, government-backed Small Business Administration loans can all be discharged.

“It’s pretty much absolutely everything except student loans,” he said.

It is particularly difficult in Texas. In the Fifth Circuit, which considers cases from federal courts in Texas, debtors would virtually need to show total incapacity to get relief. As recently as July, a court rejected an appeal from a Texan over age 60 with a degenerative nerve condition and nearly $8,000 in student loan debt. Other courts, including those overseeing Massachusetts and Maine, have used a more charitable interpretation of the federal statute, which says student debt can be discharged if repayment imposes an “undue hardship.”

“Today, you can file a bankruptcy, be in just utter, destitute circumstances and still fail” the test required to discharge student loans, said Palmer, an attorney at the Curtis, Casteel and Palmer law group in Washington.

Legislation filed in Congress would make it easier to discharge student debt in bankruptcy, but it has not progressed.

Student loan holders can also apply for hardship waivers that can reduce how much of their Social Security benefits are withheld or stop the payments from being offset altogether.