A bill introduced in December by U.S. Rep. Tom Garrett, (R-Virginia), would basically trade Social Security benefits to reduce student loan debt.
The bill is not mandatory, and people who have student loan debt, would have to choose the option to delay receiving Social Security retirement income in order to pay off their student loans.
The earliest an individual can begin collecting Social Security retirement benefits is 62, but if they choose this option they receive about 20 percent less money than if they waited until full retirement age, which is 67 for everyone born in 1960 and later. The bill specifies that for ever $550 in student loan debt an individual chooses to have forgiven; the individual’s normal retirement age would increase by 1 month. As an example, someone who has $50,000 in student loan debt could have the entire obligation forgiven if they increased their normal retirement age by 7.5 years, which would make them over 74 before they could start collecting Social Security retirement benefits. Someone who has $100,000 in student loan obligations would have to wait until age 82 to start collecting benefits.
The bill is a creative way of attempting to alleviate student loan debt, which according to MarketWatch, equaled $1.4 trillion in 2017. In contrast, the entire student loan debt in 2003 was just $0.3 trillion. This proposal does not help the middle class and lower income people because they end up relying on Social Security benefits way more than higher income people do, and can’t afford to wait several more years before they receive a Social Security check. Although the bill is an interesting idea, it would not be beneficial to most Americans who are not sure how long they can work and don’t have a crystal ball to determine when they are going to need to rely on Social Security benefits to survive.
