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Distressed mature couple angry with so many bills to pay
Older Americans with student loan debt are seeing a portion of their Social Security checks removed.
kupicoo—Getty Images/Vetta

If you're an older American still saddled with student loan debt, your government benefits could be taking a hit.

A new report from the Government Accountability Office has found that tens of thousands of senior Americans have their Social Security benefits garnished hundreds of dollars each month in order to repay long-held, defaulted federal student loans.

In accordance with this law—which states that borrowers 50 years or older must repay defaulted loans with a portion of their Social Security benefits—114,000 Americans had their benefits reduced, amounting to $4.5 billion collected by the Department of Education as of September 2015. That's a 440% increase from 2002.

The study also found that a quarter of those borrowers were also seeing cuts from their Social Security for loans that were not taken out for their own education. And most borrowers owed less than $10,000 at the time they took out a loan.

Even worse, the report found that every time someone's Social Security was reduced they were charged an offset fee of $15. Over a year, borrowers paid $180 in offset fees. What's more, about 71% of the funds collected through offsets were applied to the fees and interest of the loan debt, while only 28% was applied to the loan balance. That caused many borrowers to see their loan balance actually increase over time.

Most borrowers remained in debt for more than five years after first having their benefits offset. After the garnishments, 67,300 Americans over 50 still burdened by student debt lived below the poverty level in 2015—up from 8,300 borrowers in 2004. Still, of the nearly 66 million people who receive Social Security benefits, those who are seeing their benefits cut due to student loan defaults make up just 0.017% of all recipients.