I got the mail the other day and among the regular junk, bills, magazines and Christmas cards was an envelope from my new Horace Mann agents. Inside was a warm Christmas greeting and a copy of the 21st Century Retirement. This little paper is printed four times per year and has information, as you would expect, pertaining to retirement issues for those of us who have investments with the firm of Horace Mann.
One of the articles this time is on student loans and Social Security benefits. My first thought was WTF? Student loans and Social Security? But then I remembered reading other articles about people my age helping out children and grandchildren with college expenses by co-signing for student loans. The gist of the thing is that Social Security can put a brick on your check if you've fallen behind on your Federal student loan. As much as it pains me to say it, I guess that's fair. Also they won't do it if your monthly check is $750 or less.
The real kicker to this is not that they want to be repaid and will take it out of your Social Security check if need be. When you sign a contract agreeing to pay the money back, you need to pay the money back. The real kicker is the dollar figure they threw out. According to the article, Americans owe $870 billion in student loans. Americans 60 and older owe $36 billion of that total amount. I looked up the census figures from 2010 and came up with this:
Total population: 308,746,000
Population 60+: 57,085,000
Population 0-19: 83,267,000
Population 20-59: 168,394,000
If Americans 60 and older owe $36 billion and there are roughly 57 million of us, that works out to $630.00 each, if the cost were distributed evenly across the old fart spectrum. Since neither the Missus or I have a student loan, that means someone else is going to have to pick up the $1200.00 slack.
If the age group infants to 19 have no student loans, that means the remaining group, age 20-59 owes a total of $834 billion. If that was divided evenly, every man-jack one of them would owe $4,952.67
These numbers are just astounding. More outstanding student loan debt than credit card or car loans. I'm not sure what these numbers are but I would think we're talking billions here as well. K-12 schooling costs $600 billion per year. That works out to $2,000 per person if everyone from infant to geezer paid taxes. Half the people don't, so the burden doubles for the rest of us. So you've got the collective student loan debt, credit card debt, mortgage debt and then the national debt, which pales all the rest in comparison, and I read the other day that about 70% of Americans now take more money out of the tax system than pay into it.
I can't see how this is going to go on for much longer. College education for the general population is going to become a thing of the past. When you start taking Grandma's Social Security check away due to college loans, times are definitely hard. You know if Grandma had the money, she'd pay the loan back. Since she doesn't have the money, she's really going to be hurting when they put the brick on the SS check.
The world didn't come to an end today but life as we know it in this country will be coming to an end if we can't figure out a way to get an educated populace without bankrupting Grandma or saddling young people with ridiculous debt loads. Personal responsibility will have to be making a comeback but I don't see that happening any time soon. It's going to be a hard sell if 70% of the population is on the dole to one extent or another - especially if they're not educated. Just a little cheery thought to brighten your holiday season.