Compliance March 19, 2018

Many Americans Would Forego Social Security Payments for Student Loan Debt Forgiveness

The Student Security Act of 2017 would grant $550 in student loan forgiveness for each month a student debtor was willing to raise his or her full retirement age, or $6,600 per year.

Reported by

Rebecca Moore

A bill has been introduced in the House of Representatives to provide loan forgiveness to borrowers of Federal student loans who agree to delay eligibility to collect Social Security benefits, and for other purposes.

The Student Security Act of 2017 would grant $550 in student loan forgiveness for each month a student debtor was willing to raise his or her full retirement age, or $6,600 per year. The proposed legislation establishes a maximum level of student loan forgiveness of $40,150, or forgoing six years and one month of Social Security benefits.

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The Social Security Administration’s Office of the Chief Actuary projects that such a program would save $725 billion over 75 years. In addition to this, countless student loan borrowers would have their debt burden either significantly reduced or completely eliminated. The Social Security Board of Trustees announced the combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance Trust Funds are projected to become depleted by 2034.

LendEDU surveyed 943 Americans with student loan debt to find out their thoughts about the proposal. The plurality (46.13%) would be willing to delay collecting Social Security benefits for complete or partial federal student loan forgiveness, while 36.37% are unsure, and 17.5% said they would not be willing to participate in the program. The average respondent had $29,356.25 in student loan debt and would be willing to postpone Social Security benefits by 22 months—giving them $12,100 of student loan forgiveness.

Asked whether they think it is more important to take out student loans to get a college education or to have access to Social Security so they can retire comfortably, 51.75% of respondents answered, “Taking out student loans to get a college education,” while 24.71% chose, “Having access to Social Security to retire comfortably,” and 23.54% are not sure.

“At a time when a minimum of a bachelor’s degree is almost always a prerequisite for any entry-level job, getting a college education is paramount for so many younger Americans, even if that means getting buried in student loan debt,” Mike Brown with LendEDU says.

Full survey results are here.