can ssi be garnished for student loans

Last Updated on December 22, 2022 by

To get all the important details you need on Student Loan Debt Can Sink Your Retirement Plan, The government garnishes Social Security income on defaulted loans, ssi and student loans, Can I Get Private Loans Discharged Due to Disability and lots more All you have to do is to please keep on reading this post from college learners. Always ensure you come back for all the latest information that you need with zero stress. Can Ssi be Garnished for Student Loans?

The short answer is yes, but there are some important caveats.

In general, if you default on a student loan, the government can garnish your wages to collect the debt. In fact, federal law says that the government can garnish up to 15% of your disposable income. That’s money left over after taxes and other deductions (like alimony). The government also has a lot of leeway when it comes to choosing how much they’ll take out of each check.

But there are some exceptions to this rule: if you’re still in school or attending vocational training classes, they won’t be able to garnish your wages until six months after you’ve graduated or dropped out, and only then if those classes are related to your degree. If you have dependents (like children), they won’t be able to garnish either unless there are other sources of support available for them (like family members who can help out). And if you’re disabled or have another medical condition that prevents you from working at all—even part-time—then they won’t be able to garnish either!

The government garnishes Social Security income on defaulted loans

If you’ve defaulted on a federal student loan, beware: The federal government can take up to 15 percent of your Social Security benefit.

The number of people 60 and older with student loan debt quadrupled from 700,000 to 2.8 million between 2005 and 2015, according to the Consumer Financial Protection Bureau (CFPB), threatening financial stability for those heading into retirement. And in fiscal year 2015 alone, almost 114,000 borrowers age 50 and older had Social Security benefits seized to repay defaulted federal student loans, according to a 2016 Government Accountability Office report. (Private student loans are not subject to Social Security garnishment.)

Called offsets, these Social Security repayments increased more for Americans 50 and older than for younger borrowers. Between 2002 and 2015, offsets jumped 407 percent among 50- to 64-year-olds and 540 percent for those 65 and older.

Most of those whose Social Security money was seized were receiving disability benefits, rather than retirement or survivor benefits, the GAO report 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 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 research and policy group based in Durham, N.C. “A lot of people are not aware of the options that are available to them” to prevent or stop seizure of their benefits.


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If your benefits are seized to repay a federal student loan, you cannot appeal to the Social Security Administration; rather, you must appeal to the Department of Education.

If you are facing federal student loan default or offset of your Social Security disability or retirement benefits, there are remedies.

  • Contact your loan servicer before you go into default to try to modify payment arrangements. 
  • “Cure” a defaulted student loan by “rehabilitating” the loan. To cure the loan, you will have to make nine 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; use the Request to Stop or Reduce Offset of Social Security Benefits form
  • Obtain a total and permanent disability discharge. For information on having your loan discharged because of total and permanent disability or to request a discharge application, go to www.disabilitydischarge.com or contact the Education Department’s Federal Disability Discharge Loan Servicing Center (Nelnet Total and Permanent Disability Servicer) at [email protected].
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ssi and student loans

Will My Student Loans Be Forgiven if I’m Approved for Disability Benefits?

If you become disabled before you pay off your student loans, you may be eligible to have your loans canceled.

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What are your chances of getting disability benefits?

2/3 of all initial disability applications get denied, but our experts prepared a simple quiz to help you understand your potential to receive benefits. Take Quiz

Which Loans Are Eligible for a Disability Discharge?

Borrowers of the following loans can get a federal TPD discharge for disability:

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  • William D. Ford Federal Direct Loan Program loans
  • Federal Family Education Loan (FFEL) Program loans
  • Federal Perkins Loans (FPLs), or
  • Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligations.

Other loan programs and private loans have their own discharge rules.

Who Is Eligible for a TPD Discharge?

The rules for a federal TPD discharge are similar to the eligibility rules the Social Security Administration (SSA) uses for disability benefits, but they’re even more difficult to meet. Being approved for Social Security disability benefits does not necessarily mean that you will be approved for a TPD discharge.

For a TPD discharge, you must be unable to do any “substantial gainful activity” (work involving significant physical and/or mental activities) because of a “medically determinable” physical or mental impairment that has lasted 60 months, can be expected to last for 60 months, is expected to result in death, or is due to a 100% military-service-connected disability.

There are two differences between this definition of disability and Social Security’s definition. First, Social Security requires that your inability to work last, or be expected to last, only one year, not five years. Second, Social Security doesn’t automatically grant disability for service-connected disabilities.

That said, those who receive a Social Security disability award with a five-to-seven year review date, meaning that they are classified in a group called “Medical Improvement Not Expected” (MINE), should automatically qualify for a federal loan discharge. Social Security has decided that these cases are not likely to improve, so they should meet the five-year requirement for the TPD discharge.

Can Creditors Take Your Social Security? | Bankrate

How Do I Apply for a Disability Discharge?

If you’re currently receiving disability benefits from Social Security, you no longer need to apply for forgiveness for your federal student loans. The U.S. Department of Education will do a quarterly data match with the Social Security Administration (SSA) and the Department of Veterans Affairs (VA). The Department of Education will send eligible borrowers notices of their approval for a discharge and they will have their loans forgiven.

Those who don’t qualify for Social Security or veterans disability benefits for technical reasons still have to apply for a discharge. You can still qualify for a TPD discharge without getting Social Security or VA benefits if your doctor certifies that you are totally and permanently disabled, and that your disability has lasted continuously for five years, is expected to continue for five years, or could result in death.

If you aren’t receiving disability benefits from the SSA or VA, to apply for a TPD discharge you must complete a TPD Discharge Application. Your physician has to fill out a section of the application stating your diagnosis, the severity of your condition, and the limitations caused by your condition. The physician must be a doctor of medicine (M.D.) or doctor of osteopathy/osteopathic medicine (D.O.) who is licensed to practice in the United States.

You submit the application to your loan servicer, and you must submit an application for each loan holder. (To find out who your loan holder is, see Nolo’s article Who Is Your Student Loan Holder?)

Are There Negative Effects of Applying for a Discharge?

If you get a discharge, you will have to jump through a few hoops to get federal student loans in the future, and if you request a new loan within three years of your discharge, you will have to resume payments on the discharged loan.

All discharges are now free from federal taxes (at least until 2025 when Congress will consider renewing the tax provision), but your state might tax you on the amount of the discharged loans. (Contact your state tax office for more information.)

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Can I Lose the Discharge if I Start Working?

Before the COVID-19 pandemic, the Department of Education had a three-year monitoring period during which you had to report your earnings. If you earned over a certain amount of income during the three years after your discharge (not counting disability payments), your discharge could be taken away and your obligation to repay the loan could be reinstated. (The level of income allowed was your state’s poverty guidelines for a family of two.)

But as of March 2021, you are no longer subject to the three-year monitoring period during which your income is monitored. The waiver of the post-discharge monitoring period is expected to remain in place until the end of the COVID-19 emergency relief period on January 31, 2022.

The post-discharge monitoring period does not apply to veterans who are 100% disabled.

In addition, your discharge can be revoked if your condition improves and you are no longer disabled.

Can I Get Private Loans Discharged Due to Disability?

If you borrowed student loans from a bank, credit union, or another private lender, your access to loan forgiveness, even in cases of disability, is likely more limited. However, some private lenders do forgive the remaining loan balance in the case of a disability or death. If your lender offers this option, be prepared to provide documentation of your disability. Each lender will have a unique application process and qualifying criteria.

Do Parent PLUS Loans Qualify for a Disability Discharge?

Direct PLUS loans, informally known as parent PLUS loans, are made by the Department of Education to parents who are paying for their children’s college education. Parents with PLUS loans can get discharges for their own disabilities, but not their children’s disabilities. In addition, when both parents take out a parent PLUS loan, both have to become disabled for the loan obligation to be discharged.

Many private parent loan lenders now also offer disability discharges to parents who become disabled.

If you have student loans, you might be wondering if your disability benefits can be garnished to pay them off. The short answer is yes—but there are some important caveats to keep in mind.

First, you may not be able to get your student loans discharged through bankruptcy, so this is a route you should only take if your disability prevents you from working.

Second, even if your disability prevents you from working and getting an income, that doesn’t mean that SSI payments will be garnished automatically. You will need to fill out a form with the Social Security Administration (SSA) and provide documentation proving that you can’t work. The SSA will then decide whether or not they will garnish your benefits.

Thirdly, if the SSA decides to garnish your benefits, they may not take everything from one check; instead they may choose to take smaller amounts from multiple checks until all of the debt has been paid off. This means that it could take longer than expected for all of the debt to get paid off (up to five years).