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More retirees are falling behind on student debt, and Uncle Sam is coming after their benefits.


More retirees are falling behind on student debt, and Uncle Sam is coming after their benefits.

By ANNAMARIA ANDRIOTIS

It’s no secret that falling behind on student loan payments can squash a borrower’s hopes of building savings, buying a home or even finding work. Now, thousands of retirees are learning that defaulting on student-debt can threaten something that used to be untouchable: their Social Security benefits.

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. (No statistics track exactly how many of the defaulting loans fall into which category.)

Most consumer advocates and attorneys who work with seniors in this predicament told SmartMoney.com that their clients were unwilling to speak on the record, because of shame or fear. But they all stress that stakes involved can become very high for older people on a budget. Deanne Loonin, a staff attorney at the National Consumer Law Center in Boston, says she’s been working with an 83-year-old veteran whose Social Security benefits have been reduced for the past five years. The client fell behind on a federal loan that he signed up for in the ’90s to help with his son’s tuition costs; Loonin says the government’s cuts have left the client without enough cash to pay for medications for heart problems and other ailments.

Roughly 2.2 million student-loan debtors were 60 and older during the first quarter of 2012, and nearly 10% of their loans were 90 days or more past due, up from 6% during the first quarter of 2005, according to the Federal Reserve Bank of New York. “It’s really a unique problem we haven’t had to face before, and it’s only going to grow,” says Robert Applebaum, founder of Student Debt Crisis, a nonprofit advocacy group in Staten Island, N.Y.

The threat of Social Security cuts adds to the overall financial woes faced by the aging baby boomer generation. Almost 45% of people aged 48 to 64 won’t save enough money to cover basic needs and uninsured health care costs in retirement, according to the Employee Benefit Research Institute. Experts say reducing Social Security benefits could set them back even more.

That same generation has been slammed by the soaring cost of college, whether for their kids or themselves. As SmartMoney.com reported this spring, tuition and fees have almost tripled in the last twenty years, growing far faster than wages. Of the more than $1 trillion in outstanding student-loan debt, federal student loans account for about 85%, according to the Consumer Financial Protection Bureau. (Private student loans account for the rest; private lenders can garnish a borrower’s wages, but can’t touch Social Security.)

Unlike other consumer debts, student loans typically can’t be wiped out in bankruptcy. And changes in the law over the last couple of decades have given Uncle Sam more power to pursue defaulters, says William Brewer, president of the National Association of Consumer Bankruptcy Attorneys. The Debt Collection Improvement Act of 1996 empowered the federal government to offset Social Security payments of defaulted student-loan borrowers. An earlier law, the Higher Education Technical Amendments Act, essentially removed any time limits on the government’s ability to collect from the defaulters. The Supreme Court upheld both provisions in a 2005 ruling.

The government’s withholding power also extends to Social Security disability benefits. Tammy Brown of Redding, Calif. says that the government has been taking $179 out of her Social Security disability check each month for the past five years. Brown, 52, became disabled in 1986 after being involved in a car accident. Unable to work, she fell behind on her student loan payments. She says the Social Security check is now too small to cover her food and medical bills, so she quit taking prescription pain pills. “It’s kind of hard to live on this amount of money,” she says.

Attorneys who specialize in defending debtors have seen a sea change as the government has stepped up its enforcement. For most of the last four years, Joshua Cohen, an attorney in Rocky Hill, Conn., has represented clients in their dealings with banks and collection agencies. It was only in the past year, Cohen says, that he started getting a growing number of calls from retirees. Now, Cohen says, “I’m getting calls from all over the country from people desperate for help.”

The Department of Education, which provides federal student loans to borrowers, say it tries to work out payment plans with people who fall behind on their loans. Justin Hamilton, a spokesman for the department, says that accounts aren’t sent off to collections until almost two years of non-payment; if collection doesn’t yield results, the loan balance goes to the Treasury Department, which can reduce Social Security checks. “It’s when people aren’t making any attempt whatsoever [to pay] that they start heading down that road,” Hamilton says.

For its part, the Treasury Department says it reaches out to borrowers twice to set up a payment plan or otherwise resolve their debt before offsetting money from their Social Security check. And the Treasury won’t withhold money from monthly checks that total $750 or less, says Ronda Kent, deputy assistant commissioner for debt management services at the Treasury Department’s Financial Management Service.

Advocates of the borrowers say many of them have extenuating circumstances. In many cases, they say, family agreements unravel for instance, adult children who tell their parents they’ll repay the loan end up dropping the ball without informing them. There can also be breakdowns in bureaucratic paper shuffling, says Mark Kantrowitz, publisher of FinAid.org, a student-loan tracker. In some cases the Department of Education loses track of the borrower, sending debt notices to the wrong addresses; sometimes, says Kantrowitz, the government can’t track down the borrowers until they begin receiving Social Security.

Student-loan experts say that changes in payment plans are partly to blame for why an aging population is still dealing with college loans. The repayment period on federal student loans can be extended to 30 years, Kantrowitz notes, if borrowers owe $60,000 or more. Another eight years can be added on for borrowers facing unemployment or other economic hardship; during those years, payments aren’t required but interest accrues.

Compared to present-day retirees, younger generations are in deeper debt, which means stories of Social Security garnishment could become more commonplace when they enter retirement. Borrowers in their 20s and 30s owe roughly $600 billion, according to the New York Fed. They’re also leaving college with more debt than their predecessors: Sixty-six percent graduated this spring with debt, and their student loans averaging $28,720, up from $9,320 in 1993, according to FinAid.org. “It’s entirely possible that the way student loan debt is growing, this could get worse,” says Rich Williams, higher education advocate at the U.S. Public Interest Research Group, a nonprofit consumer group.
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A shock tactic gone too far? New ad features senior citizens simulating sex positions to promote use of condoms

A shock tactic gone too far? New ad features senior citizens simulating sex positions to promote use of condoms
By Kristie Lau

An advertisement featuring senior citizens simulating sexual acts has sparked shock from consumers.

Too much? An ad campaign showing senior citizens in a series of different sexual positions has sparked shock among consumers


Visual impact: Though the seniors featured in the video are fully-clothed, the sexual nature of the positions is impossible to ignore

The video campaign, released by U.S. organisation SaferSex4Seniors.org, is designed to promote safe sex through use of condoms following news that STDs among sexually-active seniors in Florida had risen by 71per cent over the past five years.

But many believe the group, while promoting a worthy cause, has taken shock tactics too far.

The 30-second video, released on YouTube today, shows a group of elderly men and women mocking the performance of fellatio as well as other challenging sexual positions.

In one scene, a particularly strong man is holding a woman who is standing upside down on her elbows. Deadpan expressions are shown on their faces.

But Akila Gibbs, the executive director of the Pasadena Senior Center told Wsbt.com that he believes the ad detracts attention from the campaign’s cause.

He said: ‘I think it looks like they’re making fun of seniors, more than they’re educating them.’

Safer Sex For Seniors, aims to provide ‘accurate, up-to-date information from experts in the field’.

It is formed of an independent collective of professional sexuality educators, researchers, authors, trainers, counselors, and therapists and provides fact sheets and advice via its website

Gothamist.com added: ‘Nobody wants to think about – let alone picture – their Grandma doing it.’

Randy Matheson, a Canadian media blogger, was shocked by the footage.
He wrote on his blog: ‘While I can only hope that no hips were ‘dislodged’ in the making of this PSA featuring spry senior couples acting out positions from the Kama Sutra, I cramped up just watching the video.’
Twitter has drawn the comments of further shocked consumers.


High risk: The ad highlights the fact that the rate of STDs among sexually active seniors has risen by over 70per cent in the last five years

DDB, the New York-based advertising agency which produced the video has defended its campaign, describing it as a ‘strategic choice to use humor and shock value’.
A spokesman told Gothamist.com: ‘Rather than taking a negative approach that uses scare tactics and piles on statistics to deter unsafe sex, DDB made the strategic choice to use humor and shock value.

Powerful message: The payoff reads, ‘While there are many ways to do it… There’s only one way to do it safely

Safety firstThe makers of the ad want seniors to enjoy their sex lives responsibly

‘Whether the younger generation likes it or not, our grandparents are having sex.

‘We wanted to make a sexy ad that maintains a level of tastefulness and encourages seniors to enjoy their sex lives – safely.’

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Tiny Strokes May Cause The Shuffling Gait of Old Age

Tiny Strokes May Cause The Shuffling Gait of Old Age

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by Nancy Shute

Old people who don’t have signs of cardiovascular disease still may have suffered microscopic strokes that don’t show up on conventional tests. The small strokes may impair their ability to walk, balance and function just the same.

Scientists examined the brains of 418 priests and nuns after they died. The researchers found that one-third of the brains that had seemed normal using conventional tests while the people were alive actually had damage to tiny blood vessels. The damage was so slight it was impossible to see without a microscope.

The people whose brains had these tiny signs of hardened arteries and stroke were most likely to have had shuffling gait and other movement problems while they were still alive.

This means that problems with walking, rigidity, tremors, and other movement issues that are often considered a normal part of aging may not be normal at all. Many old people considered healthy may actually have considerable damage to the tissue and blood vessels in their brains.

“There’s a limit to what you can see in brain imaging using current technologies,” says neurologist Aron Buchman, Rush University Medical Center in Chicago, and lead author of the study. “These are not people who had a diagnosis of Alzheimer’s or Parkinson’s disease. These are people who had mild motor findings that otherwise would be written off as normal aging.”

Though that may sound like yet another grim prognosis associated with aging, Buchman says it opens the possibility that what seems like an inevitable result of old age could be treated or prevented.

“Loss of mobility, mobility disability, slowing of gait is something that’s ubiquitous in older people,” Buchman told Shots. But this study didn’t show that the brain damage caused the movement problems, because it only compared the state of the people’s brains at death with examinations of their health while still alive. “I wish that we had something like carbon-14 dating like they have at archeological sites, so we can figure out when problems arise in the brain,” he added.

One way to figure that out may be to use conventional brain imaging techniques like MRI over time, then compare the changes over time with the state of the person’s brain at death. But that work has yet to be done.

Buchman praised the priests and nuns who volunteered for the research, which was part of the Religious Orders Study. “They came in for tests for 15 years, and then they donate their brains at death. They deserve our special thanks.”

The results were published online in the journal Stroke.

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