How the Government Makes Life Harder for Disabled People With Student Debt

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Can you imagine still having student loan debt when you become eligible for Social Security?

For many Americans, it’s a reality. And it can be a scary one.

More than 100,000 people age 50 and older have had their Social Security benefits garnished in the past 16 months — all because they still have outstanding student loan debt, according to a new report by the Government Accountability Office.

The government can take up to 15% of your Social Security check if you have unpaid debts; for many borrowers, losing that much from their monthly benefit is enough to push them below the poverty line.

And most of the money garnished goes toward interest and fees, not the outstanding loan’s principal. The U.S. Treasury charges a $15 monthly fee just to process your benefit garnishment.

Who’s Losing Their Social Security Benefits?

Here’s what the GAO learned about people who lost a portion of their Social Security funding because of their student loan debt:

  • Three-quarters of them had outstanding loans for their own education — not loans they co-signed.
  • Most had student loan balances of less than $10,000.
  • Approximately 43% had their loans for 20 years or more.
  • More than half received their Social Security benefits due to disability, not retirement income.

Can the System Be Fixed?

The GAO recommends adjusting the 15% garnishment cap to reflect higher costs of living. The office also requested revised disability-related student loan discharge rules.

You can request to have your federal loans discharged if you become permanently disabled, but those requests are approved on a case-by-case basis. And people who are eligible to have their loans discharged may not even know it — or what steps they should take to have their loans considered.

Your Turn: Should the government garnish Social Security checks when someone has outstanding federal student loans?

Lisa Rowan is a writer and producer at The Penny Hoarder.

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