Last year, we discussed how Social Security benefits can be garnished if you default on student loans.
Some people find this practice outrageous, as those collecting Social Security Disability Insurance (SSDI) or other forms of benefits usually live very modestly. Unfortunately, garnishment is becoming increasing popular; in 2013, CNN reported that more than 156,000 Americans had their Social Security checks garnished because of student loan defaults.
Many people expect this number to rise as current debt levels for student loans is sitting at nearly $1.2 trillion nationally and nearly one in 10 borrowers have loans in default. With this in mind, recently Social Security Works reported that two Congressional Caucus members sent a petition to the Department of Education hoping to end this practice.
“People should not lose their hard earned benefits—averaging only $1200/month– in order to pay their student loans. We should find ways to offer more affordable education, lower interest rates, and better repayment options,” U.S. Rep. Keith Ellison (D-MN), Co-Chair of the Congressional Progressive Caucus said in the petition letter, according to Social Security Works.
The petition was also backed by Rep. Raúl Grijalva (D-AZ) and Rep. Marcia L. Fudge (D-OH), and signed by nearly 375,000 people.
Do Not Let Student Loan Debt Prevent You From Applying for Disability Benefits
Although Social Security benefits can be garnished due to student loan defaults, your lender may be able to work out an income-based repayment if you collect SSDI, which would probably be cheaper than a standard payment.
To qualify for SSDI, you will need to prove that you can no longer work and you must have earned credits.
We are glad to see that these politicians are trying to fight the unfair practice of student loan-Social Security garnishment.
Troutman & Troutman, P.C. – Tulsa Social Security disability lawyers