Can My Social Security Benefits Be Garnished Over a Student Loan Default?

Did you know that student loan default levels are at their highest levels in nearly two decades? Last year, almost one in 10 borrowers defaulted on their federal student loans, as the current debt level sits at nearly $1.2 trillion nationally. Question man

Which leads us to our point—if you are collecting Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) and you have outstanding student loan debt, a lender could garnish your income if you let it slip into default.

This is becoming more common, according to several media outlets. According to CNN, last year, more than 156,000 Americans had their Social Security checks garnished because of student loan defaults. The news outlet reported that this number was triple that of 2006, when 47,500 people had their checks garnished.

Unfortunately, federal laws make it very hard for people to discharge student loan debt in bankruptcy, when compared to other forms of debt, including medical bills and credit card debt. This means that when someone does not have enough money to pay a bill, a lender can take a person to court in an attempt to garnish his or her wages, which can include Social Security funds.

What Should I Do If a Lender Tries to Garnish My Social Security Check?

If you collect Social Security disability and are the on the verge of defaulting on your student loans, you should speak to your lender immediately about options like income-based repayment, forbearance and deferred payments.

In many cases, if your income level is too low, you can work out a plan with a lender to reduce your student loan payment to a percentage of your income, which may be lower than the payment plan you have worked out.

Remember, to qualify for SSDI, you need to show that you can no longer work and are disabled. For more information about this, you can visit our Social Security FAQ page.

In most circumstances, it is best to work with an attorney when applying for or appealing a benefit decision. We can review your case. For more information, contact us today.

Troutman & Troutman, P.C. – Tulsa Social Security disability lawyers

Troutman Touts: The average student loan debt balance sits at more than $23,000 nationally per borrower.


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