Can Dept Of Education Take Money Out My Social Security Check For Repayment
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If you've defaulted on a federal student loan, beware: The federal regime tin can take up to xv per centum of your Social Security benefit.
The number of people 60 and older with student loan debt quadrupled from 700,000 to 2.8 1000000 between 2005 and 2022, co-ordinate to the Consumer Financial Protection Bureau (CFPB), threatening fiscal stability for those heading into retirement. And in fiscal year 2022 alone, almost 114,000 borrowers age 50 and older had Social Security benefits seized to repay defaulted federal student loans, according to a 2022 Government Accountability Office report. (Private student loans are not subject to Social Security garnishment.)
Called offsets, these Social Security repayments increased more than for Americans 50 and older than for younger borrowers. Between 2002 and 2022, offsets jumped 407 percentage amid 50- to 64-year-olds and 540 percent for those 65 and older.
Nearly of those whose Social Security money was seized were receiving disability benefits, rather than retirement or survivor benefits, the GAO study said.
The offsets have affected the poorest Social Security recipients and, increasingly, Americans with Social Security income below the median benefit amount, the report said, though offsets must not reduce Social Security benefits below $750 per calendar month.
"The effects are pushing people below the poverty line," says Diane Standaert, executive vice president and director of state policy at the Center for Responsible Lending, a nonprofit enquiry and policy group based in Durham, N.C. "A lot of people are not aware of the options that are available to them" to preclude or stop seizure of their benefits.
If your benefits are seized to repay a federal educatee loan, y'all cannot entreatment to the Social Security Administration; rather, y'all must entreatment to the Department of Education.
If yous are facing federal student loan default or start of your Social Security disability or retirement benefits, there are remedies.
- Contact your loan servicer before you go into default to endeavor to modify payment arrangements.
- "Cure" a defaulted student loan by "rehabilitating" the loan. To cure the loan, y'all volition take to brand ix on-time payments over 10 months, based on your income, to a debt collector, according to the CFPB. Once the payments are received, the loan is removed from default status and from collections and returned to the student loan servicer.
- Seek a financial hardship exemption through the Department of Education; utilise the Request to Cease or Reduce Starting time of Social Security Benefits form.
- Obtain a total and permanent disability belch. For information on having your loan discharged because of total and permanent disability or to request a discharge application, go to world wide web.disabilitydischarge.com or contact the Education Department'south Federal Disability Discharge Loan Servicing Center (Nelnet Full and Permanent Inability Servicer) at DisabilityInformation@Nelnet.net.
Source: https://www.aarp.org/money/credit-loans-debt/info-2018/student-loans-garnish-ss.html
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