How the Debt Limit Bill Could Affect Older Americans

Currently, people ages 18 to 49 who are able to work and do not have dependent children must work or participate in a job training program for at least 80 hours a month to get SNAP benefits for more than three months over a three-year period. The debt ceiling pact raises the top age to 54.

Because the deal adds an exemption to the work rule for veterans and homeless people, it is likely to increase the SNAP rolls overall, the CBO estimates. But it still puts eligibility at risk for many of the nearly 750,000 SNAP recipients in their early 50s, according to the Center for Budget and Policy Priorities, a Washington think tank.

“The proportion of people who become disabled sharply rises between your 40s and your 50s, and then again between your 50s and 60s,” says Kathleen Romig, the center’s director of Social Security and disability policy. People receiving Social Security disability benefits are exempt from the work requirement, she says, but benefit claims can take months, even years, for the Social Security Administration (SSA) to process.

“It’s a catch-22,” she says. “They can’t prove it until they go through the SSA rigmarole. But the SSA rigmarole takes forever, and in the meantime, they are hungry and need help with their food.”

Overall cuts in nondefense spending

The agreement calls for increasing spending on defense and veterans’ care while largely capping or cutting other nondefense discretionary spending. (It does not affect Social Security and Medicare benefits, which are mandatory spending not subject to the yearly appropriations process.) 

The proposed cuts “could reduce access to important community services under the Older Americans Act,” Alwin says in the National Council on Aging statement. The law, enacted in 1965 and most recently reauthorized in 2020, funds senior centers, meal delivery, caregiver support and a host of other programs serving older adults.

“Aging network providers face an ever-increasing demand for their services in the community” as the 65-plus population grows, Alwin says. “We must invest more — not less — in ensuring that all can age with dignity.”

The agreement could also be “bad news for Social Security customer service” and the beneficiaries who rely on it, Romig says. With SSA staffing at a 25-year low, it took Social Security six months on average to process initial disability claims in 2022, and average hold times for callers to the agency’s national phone line reached nearly 40 minutes in early 2023.

“That has just been a disaster,” Romig says. “They really need more funding and more staffing to get out of this customer service hole, but the fact that they’re doing these nondefense discretionary caps means that their pot of money, the amount of money that includes SSA customer service, is really constrained.”

Student loan repayments resume

Under the debt limit deal, a pause on federal student loan repayments instituted in March 2020 will end Aug. 30. The White House had previously announced a likely end to the pandemic pause in late August, but the new law codifies the date and prevents the administration from extending the deadline, as it has done several times.

That means a likely return to monthly payments for the 46 million people holding student debt, 20 percent of whom are 50 or older, according to federal data.

While the effects of resuming payments will be felt across generations, the more than 9 million who are 50-plus face particular challenges, says Erik Kroll, a financial planner whose firm, Student Loans Over 50, specializes in helping older borrowers.

After more than three years, “people are going to have to get used to making a payment in terms of where it falls in their budget,” Kroll says. “Given the fact that they’re much closer to retirement than someone fresh out of college, this puts a little bit more strain on being able to save for retirement.”

The new law does not address Biden’s proposals for widespread student loan forgiveness and more affordable repayment plans for low- and middle-income borrowers, which are being challenged in other legislation and in court. But Kroll says most 50-plus borrowers took out loans to pay for a child’s college education rather than their own, and these types of loans “really limit you in terms of what repayment plans you can qualify for.”