Elderly man standing in cold

How to Stop Social Security From Being Garnished for Student Loans

May 16, 2020

It’s scary to think you’re retired (or near retirement) and you still owe student loans. My clients who are over 60 tell me that on top of being scared, they’re embarrassed that despite being in repayment for years, they haven’t paid off loans they took out to get a higher education in the 80s and 90s.

When they share those thoughts with me I encourage them to stop beating themselves up.

Can Social Security be Garnished for Student Loans?

The federal government can garnish 15% of your Social Security Benefits if you default on a federal student loan. They can also garnish your wages and offset your tax refund. They cannot, however, garnish your pension or other retirement money. You may be able to get out of default through loan consolidation, loan rehabilitation, or loan cancellation for a Total and Permanent Disability.

Related: How to Stop a Student Loan Garnishment After it Starts

The reality is that there are hundreds of thousands of other loan borrowers in the same position.

Sure, like the woman in the video below, your federal student loans are going to follow you to your grave. But guess what?

It doesn’t matter.

When you die, your federal loans will go away. So you don’t have to worry about your spouse or your kids having to deal with it.

(Education loans made by a private lender, on the other hand, may go after your estate if the statute of limitations hasn’t run.)

We just need to make sure that while you’re still living, you can do so without worrying about being driven into poverty because your Social Security is being garnished for student loans.

And that’s pretty easy to do if by getting your loans into a repayment plan based on your income.

In this post, I’ll answer:

  1. What happens with unpaid student loans and Social Security benefits?
  2. Student loans can take up to 15% of your Social Security
  3. Social Security can be offset/garnished forever for student loans?
  4. Security Benefits can be offset but not garnished for student loans loans
  5. How to stop your Social Security benefits from being taken for student loans
  6. How to request a financial hardship reduction of Social Security offset
  7. You can get Medicare if you owe student loans
  8. Pensions typically can’t be garnished for student loans?

#1 What Happens With Unpaid Student Loans and Social Security Benefits?

You can still get Social Security Benefits even if you owe federal student loan debt.

Whether you get your full payment is a different story.

SSI payments cannot be offset for student loans.

If you default on your federal student loans, the government can offset (garnish) your monthly payments from the Social Security Administration to repay your student loans.

Related: Getting Student Loans Out of Default: Here’s How to Do it Quickly

Private loans cannot ever garnish your Social Security payments. Nor can they garnish your wages without a court order.

So if your Social Security payments are being taken for student loans, then it’s because you have a federal student loan in default.

#2 How Much Can Student Loans Garnish From Social Security?

If you’re worried the government is going to take all of your Social Security payments because you owe student loans, stop.

They government can’t take your entire Social Security payment for a defaulted student loan.

There are limits.

Sure, you may have seen this woman’s story and worried that your entire monthly Social Security check could be garnished.

Elderly woman Social Security garnished student loans

Stop worrying; that shouldn’t happen to you.

Here’s why.

When you’re in default on a federal student loan, the government can offset (basically the same thing as garnish) a maximum of 15% of your monthly benefit payment.

#3 How Long Can Social Security Be Garnished for Student Loans?



There’s no statute of limitations on how long the government can take your social security benefits to repay student loan debt.

There used to be a rule that limited offset to debts that were less than 10 years old. But Congress changed that law in 2009.

Now, so long as you’re in student loan default, the federal government can keep taking your benefits and income tax refund until the loan balance is paid in full.

#4 Can Social Security Benefits be Garnished for Student Loans

Garnished no. Offset yes.

Let me explain.

Technically, a garnishment is different from an offset.

The differences between the two don’t matter here.

What does matter, is the effect the two have on your money.

Whether by a garnishment or by offset, the Department of Education is taking your money through an involuntary action to repay a defaulted federal student loan.

#5 How to Stop Your Social Security Benefits from Being Taken for Student Loans

The best way to avoid having your Social Security garnished is to avoid student loan default.

But if your loans have already defaulted, the next best thing you can do is get out of default quickly.

Depending on what’s going on with your federal loans, you may have two options for getting out of default:

  1. Loan rehabilitation; and
  2. Loan consolidation

Loan consolidation is the faster of the two. It should get you out of default in about 2 to 3 months.


Loan rehabilitation, on the other hand, takes about 3 to 4 times longer. (The government should stop taking your Social Security around month 6.)

Related: The Loan Rehabilitation Income and Expense Form

To consolidate, you’ll want to submit a consolidation application to a student loan servicer like Great Lakes, Nelnet, Fedloan, etc.

To rehabilitate, you likely won’t contact a servicer. Instead, you’ll work with the collection agency handling the defaulted loans. The agency should go over all of your student loan repayment options, including paying in full, settlement, and making voluntary student loan payments.

#6 How to Request a Financial Hardship Reduction of Social Security Offset

One other way to stop the offset is to request a financial hardship reduction. The Department can either grant a partial or full reduction.

You’ll want to send:

  • a completed financial disclosure statement/Statement of Financial Status
    proof of your income and expenses
  • a copy of the notification of offset (you can get this from the Treasury Department’s Bureau of the Fiscal Service and
  • a letter explaining the exceptional circumstances causing financial hardship and any supporting documents.

The Department has said that it will determine whether a borrower is entitled to a reduction in about 10 days.

And for Social Security recipients who get Social Security Disability Insurance (SSDI), the Department has said it will send documents on how they can get their loans discharged for their disability.

#7 Can you get Medicare if you owe Student Loans?

Worried you’ll lose eligibility for Medicare because of your student loans?

Stop worrying.

You can still get Medicare if you owe student loans.

The eligiblity requirements for Medicare don’t include you student loan debt.

So while the federal government may take your Social Security benefits and tax refund for having a defaulted loan, they won’t take your insurance.

You can keep your Medicare even if you’re in default.

#8 Can Pensions be Garnished for Student Loans?

Typically, your pension can’t be garnished for student loans. There is at least one exception: the government can offset Railroad Retirement benefits for defaulted student loans. Or maybe you

Final Thoughts

While getting student loan forgiveness for student loan debt you borrowed decades ago would be nice, it doesn’t exist.

And because it doesn’t exist, your student loan debt will likely follow you to your grave.

While that sucks, it’s not the end of the world.

You just need to take advantage of the federal government’s loan repayment options based on your income.

Almost all of my clients who are over 60 and survive off their Social Security and disability benefits pay less than $100 per month towards their federal student debt.

Because of the repayment options are so friendly, there’s little reason why you should default on your student loan debt or default on the Parent Plus Loan you took out for your children.

Let me help you do the same.

Talk with Tate

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