Representatives Push to End Social Security Garnishments for Student Debt
Under current law, Social Security Disability Insurance (SSDI) benefits can be reduced or offset for defaulted federal student loans. Supplemental Security Income [SSI] is a needs-based program and is completely shielded from student loan collection, even after default.
Under the Treasury Offset Program the federal government can withhold up to 15% of your monthly SSDI benefit if your federal student loan goes into default. However, by law, the offset cannot reduce your monthly benefit to below $750.
Over 9 million Americans are now in default on their student loans. This means nearly 1 in 4 student loan borrowers cannot pay back their loans and are at risk of having their wages or Social Security benefits seized to pay back their outstanding student debt. Half of Social Security recipients who had a Social Security check garnished because of a defaulted student loan reported skipping a doctor’s visit or reported being unable to obtain a prescription they needed, due to cost, according to the Consumer Financial Protection Bureau.
Recently, Senator Bernie Sanders (I-Vt.), introduced the Stop Social Security Garnishment Act — legislation to prevent the government from garnishing Social Security payments to pay back decades-old student loan debt.
As Ranking Member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Sanders explained: “As a result of…disastrous cuts to education, an increasing number of seniors [and disabled Americans] are in danger of having their Social Security checks garnished to pay back student loans they took out decades ago. That is beyond unacceptable,” Sanders said. “In the richest country in the history of the world, no [one] should have their Social Security payments taken away from them to pay back student debt. This is especially true when [families] throughout the country already cannot afford the skyrocketing price of healthcare, prescription drugs, groceries and housing. Congress must pass this legislation.”
Joining Sanders as cosponsors on this legislation are Sens. Elizabeth Warren (D-Mass.), Ed Markey (D-Mass.) and Ron Wyden (D-Ore.).
The bill has not yet been passed or enacted into law; it awaits committee consideration and a vote in Congress.
