Feds Withholding Social Security Benefits To Pay Remaining Unpaid College Loans

The federal government has now begun the process of withholding the social security benefits of retirees who have fallen behind on payments to their unpaid college loans. In addition, the government has also started to withhold checks made to those who are taking disability benefits. According to SmartMoney.com, “[f]rom January through August 6, the government reduced the size of roughly 115,000 retirees’ Social Security checks on those grounds. That’s nearly double the pace of the department’s enforcement in 2011; it’s up from around 60,000 cases in all of 2007 and just 6 cases in 2000.”

The amount that the government can withhold varies based upon different situations, however, the maximum that the government can withhold is only 15%. The situation is sad because many of these elderly citizens will likely be surprised by the government’s action. Most of the people that this is affecting are people who took on loans to aid their children or grandchildren. Only a few are older borrowers who signed up for the federal PLUS loan. This situation has placed a number of elderly people in financial trouble and has put them in a situation that makes them unable to pay their own health care and living expenses. This problem could also be further compounded by cuts to social security.

See Annamaria Andriotis, For Unpaid College Loans, Feds Dock Social Security, Aug. 7, 2012.