While not an absolute rule, seniors or the elderly tend to be the predominant residents of nursing homes and long-term care facilities. Naturally, with age this part of the population is more likely to encounter situations of illness or physical or mental disability. A major challenge for seniors and their families is not only finding the right nursing home that is suitable for the patient resident’s needs, but also the task of finding one that is affordable.
Nursing homes can cost a fortune, and by that alone they should be expected to provide the absolute best quality of care to their residents. It is also important to find a home that one can afford, typically through private insurance or public plans like Medicare or Medicaid. This is not always so easy, though, and seniors are often left out in the cold or struggling just to pay the care bills. An added burden occurs where seniors already have existing debt for other things, which can drain their finances and make it tougher to find the right care.
The Student Loan Problem
One such area of debt for seniors happens to be student loans. For many in their 20s, 30s and 40s, student loans are a fact of life and the monkey so many want off their backs so they can get married, have kids, own homes, and live their lives without substantial debt. Seniors, however, face the continuing burdens of student loans even into old age. As The Detroit News recently reported, one city resident who is in her late 50s continues to face the crippling burden of student loans. Much of this burden has been compounded by other life issues such as a divorce, health-related issues, and a mortgage bigger than the actual value of her home. In the recession era, this is common for so many. As the article goes on to state, Americans increasingly are struggling to pay off student loans, and the recession has contributed to that problem while banks and financial institutions received generous bailouts, but students get no such relief. And to add to the pain, student loans are one of the few debt obligations not dischargeable through personal bankruptcy, so they are there for life.
Student debt countrywide is around $1 trillion overall. Four percent of Americans between the ages of 65 and 74, as the article cites from a Government Accountability Office report, had some form of federal student loan debt in 2010, which was a 1% increase from the year 2004. Between 2005 and 2013, student loan debt among seniors exploded from $2.8 billion to $18.2 billion of that overall roughly $1 trillion total. Roughly 25% of loan debt held by seniors between 65 and 74 years old has been defaulted on by the debtors. According to the GAO, 80% of student loan debt incurred by seniors was for themselves, while the remainder was taken out for their children.
When it comes to all sorts of debt, there are a number of mechanisms creditors can use to get back as much of that money as they can, even from an underwater debtor. Courts can order the garnishment of wages, or in the case of tax debt to the government, the government can simply garnish those wages. For seniors in particular, social security benefits, which are meant to sustain them through their later years, can be garnished to pay back that debt. There is a ceiling on what can be taken out of social security, but taking anything can effectively leave these people with little means of support, particularly as they need to spend money on things like food and healthcare.
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