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Owe Student Loans? Your Social Security Might Be Cut

Feds taking up to 15% of some retirees' checks

By Dustin Lushing,  Newser Staff

Posted Aug 10, 2012 5:12 PM CDT

(Newser) – If you're retired and owe student loans, your Social Security benefits might not be as big as you thought. More and more retirees who are in student loan default are seeing a chunk of their monthly Social Security checks being grabbed by the federal government. Since January, the feds have shrunk the size of around 115,000 retirees' checks, nearly twice as many as in 2011, reports MarketWatch, picking up on a report in SmartMoney. The amount of money withheld varies, but it can reach up to 15%.

“This is going to catch an awful lot of people off guard and wreak havoc on their financial lives,” says one financial planner. In many cases, the affected retirees are in debt not for themselves but because they helped pay for their children's college loans, note consumer advocates. The government does give two offers to debtors to set up a payment plan before the cuts kick in, and they will not touch checks of $750 or less.

The government has ramped up enforcement of student loan debts. Retirees in default may see their Social Security benefits slashed.
The government has ramped up enforcement of student loan debts. Retirees in default may see their Social Security benefits slashed.   (Shutterstock)
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COMMENTS
Showing 3 of 24 comments
Kookey90
Aug 11, 2012 6:37 PM CDT
It was called a "Student Loan" baby and last time I checked loans need to be paid back. I'm glad to see the govenment has finally done something smart to try to get their money back.  
Scott60561
Aug 11, 2012 5:02 PM CDT
Oh, no. How can this even be possible? Required to pay student loans that were signed or co-signed for? What is this world coming to. Would you believe that people who don't pay their mortgages get their houses foreclosed on too? These banks, lending money to people and demanding it is paid back, they sure have the nerve. Unbelievable, everything a person wants should be just free for the taking. 
jgarbuz
Aug 11, 2012 4:35 PM CDT
The idea the liberal government has been pushing since the 1960s is that EVERYBODY has to go to college, and EVERYBODY has to own a home. When I went to high school in the early 1960s, most kids took shop, vocational and commercial high school courses in preparation to go to WORK after high school, Then the liberals took over the educational system in the mid-1960s and got rid of "tracking" as being a racist tool, and spread the haughty ideology that anyone that doesn't get into a college is a nobody and will remain a nobody for the rest of his or her life. They got rid of vocational and commercial courses, and  starting putting kids who were bored and not interested in academics into ESL. Of course Germany never did any such thing, which is why they are the second largest exporting nation next to China. They have people who know how to make and maintain machinery, and not just people who only read and write books and do research and become "talking heads" for a living. The country was suckered in by all the propaganda and now the piper has come for his due.

 
student loans • retirees • debt • Social Security • Federal government • retirement benefits • debtor • loan defaults • retired

 
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