HOBOKEN, N.J.–Would those holding outstanding student loans be willing to retire later in exchange for some loan forgiveness?
That question was posed by LendEDU here in response to one piece of legislation that proposes just that and follows analysis showing national student loan debt is now approximately $1.45 trillion, while the Social Security’s Old Age and Survivors Insurance program is projected to hit insolvency by 2035.
Rep. Tom Garrett (R-VA) has proposed the Student Security Act of 2017 that 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 (for forgoing six years and one month of social security benefits).
The Social Security Administration's Office of the Chief Actuary projects that such a program would save $725 billion over 75 years, noted LendEDU in releasing the results of a poll around the proposal.
The survey of 943 Americans conducted by LendEDU found the following:
Would you be willing to delay collecting Social Security benefits for complete or partial federal student loan forgiveness?
* 46.13% of respondents answered yes
* 17.5% of respondents answered no
* 36.37% of respondents answered unsure
When those who answered "A" to Q1 were asked, “How much student loan debt do you currently have?” the average respondent had $29,356.25 in student loan debt.
When those who answered "A" to Q1 were asked, “How many months of Social Security would you be willing to postpone if each postponed month meant another $550 in student loan forgiveness?” the average respondent said they would be willing to postpone Social Security benefits by 22 months - giving them $12,100 of student loan forgiveness.
All respondents were then asked, “Do you think it is more important to take out student loans to get a college education or to have access to Social Security, so you can retire comfortably?”
* 51.75% of respondents answered "Taking out student loans to get a college education"
* 24.71% of respondents answered "Having access to Social Security to retire comfortably"
* 23.54% of respondents answered "Not sure"
“Taken as a whole, the results of this survey demonstrated just how much student debtors prioritize repaying their student loan debt and easing that burden,” LendEDU said in its analysis. “If an important benefit like Social Security has to take a backseat, then so be it. First, 46.13% of respondents displayed their enthusiasm for the potential program by answering "yes" when asked if they would be willing to delay Social Security benefits for complete or partial federal student loan forgiveness. Even more telling was that only 17.5% of borrowers rejected such a program, while 36.37% were unsure if they would partake. One may be able to interpret this as potentially overwhelming support for the Student Security Act of 2017.”
LendEDU further noted that the average respondent in the survey had $29,365.25 in student loan debt and was willing to postpone his or her Social Security benefits for 22 months if each postponed month meant $550 in student loan forgiveness. Under the proposed legislation, postponing Social Security benefits for 22 months would equate to $12,100 in student loan forgiveness. That forgiveness figure would reduce the average respondent's student loan debt by 41.22%, or down to $17,256.25.
“After analyzing the data, it was really interesting to see how much student loan debt respondents would have forgiven depending on their respective amount of student loan debt and how many months they would forgo Social Security benefits for student loan forgiveness,” LendEDU said. “Of those student borrowers that would want to partake in the Student Security Act of 2017, 37.64% of them would have their student loan debt fully erased…Interestingly, these results ended up being quite polarizing; while the plurality of respondents would get full forgiveness, 24.48% of debtors, the second highest percentage, would get between 24% and 1% forgiveness. Everyone else fell squarely in the middle.”
The full survey results can be found here.