In the realm of inter-generational warfare:
According to government data, compiled by the Treasury Department at the request of SmartMoney.com, the federal government is withholding money from a rapidly growing number of Social Security recipients who have fallen behind on federal student loans. From January through August 6, the government reduced the size of roughly 115,000 retirees’ Social Security checks on those grounds. That’s nearly double the pace of the department’s enforcement in 2011; it’s up from around 60,000 cases in all of 2007 and just 6 cases in 2000.
The amount that the government withholds varies widely, though it runs up to 15%. Assuming the average monthly Social Security benefit for a retired worker of $1,234, that could mean a monthly haircut of almost $190. “This is going to catch an awful lot of people off guard and wreak havoc on their financial lives,” says Sheryl Garrett, a financial planner in Eureka Springs, Ark.
Many of these retirees aren’t even in hock for their own educations. Consumer advocates say that in the majority of the cases they’ve seen, the borrowers went into debt later in life to help defray education costs for their children or other dependents. Harold Grodberg, an elder law attorney in Bayonne, N.J., says he’s worked with at least six clients in the past two years whose problems started with loans they signed up for to help pay for their grandchildren’s tuition. Other attorneys say they’re working with older borrowers who had signed up for the federal PLUS loan — a loan for parents of undergraduates — to cover tuition costs. Other retirees took out federal loans when they returned to college in midlife, and a few are carrying debt from their own undergraduate or graduate-school years.
It’s hard to feel sorry for Boomers getting their federal checks raided by the government to pay off the banksters when it was the Boomers that kept those criminals in power in the first place. It’s also hard to feel sorry for the generation that kept pushing higher education on its kids and grandkids with no concern about the market realities of college-educated labor, to the point where they demanded federal subsidy of student aid, as well the constant barrage of propaganda telling kids to go to college. Of course, the main reason they wanted their kids to go to college was that they could be more productive laborers, which the Boomers were going to tax to death in order to pay for retirement. Basically, the Boomer’s plan for using future generations as slave labor is backfiring. And the karma could not be more beautiful.