Retirees Face Student Loan Debt Even In Social Security Insurance for Retirement Payments

More retirees are facing student loan debt crises as their debt is being docked from their Social Security Insurance for retirement.

According to a recent treasury department analysis, the number of retirees whose student loan debt is being docked from their Social Security checks has tripled since just 2006. In 2006, 47,500 retired individuals lost part of their meager social security payments to student loan debt; in 2013, that number rose to 156,000. Currently, up to $180 per month can be taken out of the average Social Security payment to repay student loans.

Social Security Insurance for retirement payments are not a significant monthly income – the average payment is just $1,200 per month – but the money keeps many seniors just afloat enough to pay for housing and medical bills. However, with student loan debt from federal student loans, up to 15% of those Social Security Insurance benefits can be taken out to repay the government.

Private lenders like banks cannot access that money directly, but the federal government offers a student loan program that can dip into those funds if the loan has not been repaid by retirement age. Many of the retirees are Baby Boomers, who helped their children through college by co-signing federal funds, or who went back to school later in life themselves. The current loan repayment delinquency rate for those over 62 years old currently stands at 12.5%, which is 3 percentage points higher than those under 30 who are still repaying student loans.

Student loans are inflexible, meaning that debtors cannot refinance or discharge their loans, even after entering retirement or bankruptcy. In fact, many student loans, including federal student loans, persist after death, leaving survivors with repayment problems.

Social workers have noted an increase in garnished Social Security Disability checks, as well. Many people with mental or physical health issues who rely on Social Security Disability payments to survive must also repay their federal student loans, and that money is automatically removed, making it harder for sick and injured citizens to pay for housing or food.

In 2013, the amount garnished from Social Security Insurance or Disability checks came to $150 million.

As the program garnishes more needed Social Security income to repay federal student loan debt, a record number of Social Security Administration field offices have closed since 2010. While seniors and disabled people can apply for Social Security benefits online, the form can be confusing, and without anyone to go to with questions, too many people have been left in the cold regarding changes to their benefits status.

The Strom Law Firm Can Help with Social Security Benefits Claims

Applying for Social Security Disability or Social Security Insurance for retirement can be complex. We understand that you need your benefits, and we will put our years of experience to work for you to ensure that you have the representation necessary to actively pursue your claim. Call the attorneys at the Strom Law Firm today to discuss your Social Security Disability or Supplemental Security Income case today. We will be glad to discuss any questions you may have during our free, confidential consultation. Call the experienced attorneys at the Strom Law Firm at (803)252-4800.