Your Social Security Benefits Can Be Garnished by Student Loan Debts

Have you forgotten that unpaid student loan you have from college? Unpaid student loan debt held by Americans has skyrocketed in recent years. As with younger Americans, the amount of student loans owed by individuals ages 60 and older has increased dramatically as educated baby-boomers enter their older years. What these individuals may not realize, however, is that the federal government may withhold a portion of their monthly Social Security retirement or disability benefits to repay this debt. More than 150,000 recipients have had deductions taken from their monthly Social Security checks to pay for delinquent student loans.

According to a report from the Federal Reserve Bank of New York, over two million Americans age 60 and older have outstanding student loan debts. The amount of such debt was $43 billion as of 2012, up from $8 billion in 2005. The average student loan debt was $19, 521, almost double the 2005 average. If you are receiving disability or retirement benefits, or if you are of retirement age or are planning for retirement, you should take into account the amount of any unpaid student loan debt. This debt may impact the amount of Social Security benefits you can expect to receive.

If you need help with a defaulted student loan, contact the Department of Education’s Ombudsman at 877-557-2575 or visit its website at But first you must take steps to resolve your loan problem on your own (there is a checklist of required steps on the website), or the Ombudsman will not assist you.

Source: Federal Reserve Bank of New York, Report: Student Loan Debt by Age Group, March 2013.

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