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Social Security and Student Loans

Can Student Loans Garnish Social Security?
Rebecca Safier
Rebecca SafierUpdated August 10, 2023
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If you fall behind on paying your federal student loans, you may have wondered, can Social Security be garnished for student loans? In fact, the government has wide-reaching powers of collection. Not only can it garnish your wages and tax refund, but it can also seize some of your Social Security benefits.While the government can’t touch your Supplemental Security Income or stop you from getting Medicare, it can take up to 15% of your Social Security disability or retirement benefits if you default on your federal student debt.Here’s what you need to know about Social Security and student loans.

Can the Government Garnish Your Social Security?

If you stop paying your federal student loans, the government can garnish your Social Security benefits to recoup payments. According to the Consumer Financial Protection Bureau, the number of people aged 65 and older who experienced Social Security garnishment increased from around 8,700 to 40,000 between 2005 and 2015. That said, the government halted this type of garnishment and collections on defaulted federal student loans in March 2020. Student loan payments have been paused, and interest rates have been set at 0%. However, the Covid-19 forbearance is set to end on Aug. 30, 2023. As a result, interest accrual on federal student loans will resume on Sept. 1, and payments will be due starting in October 2023.The U.S. Department of Education announced an “on ramp” so that late payments on federal student loans from October 2023 through September 2024 will not be considered delinquent.

How Defaulting On Student Loans Impacts Social Security

Your Social Security benefits won’t be touched if you’re up to date on your federal student loan payments. However, Social Security garnishment can occur if you don’t pay your student loans for a significant period of time.Federal student loans are typically considered to be in default after 270 days of missed payments. Along with garnishing Social Security benefits, the government may also:
  • Report the default to the credit bureaus, damaging your credit 
  • Prevent you from purchasing or selling assets, such as real estate 
  • Withhold tax refunds and federal benefits and use them toward your student loans 
  • Garnish your wages 
If you have private student loans, private lenders cannot garnish your Social Security.

Can Student Loans Be Forgiven if You’re On Social Security?

If you’re on Social Security, you might wonder if there’s a way for your federal student loans to be forgiven. There are a few ways to get your federal loans discharged, such as experiencing a total and permanent disability. Speak with your loan servicer if you think you might qualify. Borrowers on income-driven repayment (IDR) plans can get their balances forgiven at the end of their repayment term, which typically spans 20 or 25 years, depending on the plan. (Borrowers with original principal balances of $12,000 or less may be eligible for forgiveness of any remaining balance after making 10 years of payments under the SAVE Plan, which replaces the REPAYE Plan.)The government also offers some loan forgiveness programs for qualifying professionals, such as Public Service Loan Forgiveness and Teacher Loan Forgiveness.

Garnishment Limits on Social Security

The government can garnish up to 15% of your Social Security disability or retirement benefits, up to a limit. It can’t leave you with less than $750 per month, or $9,000 per year, in Social Security benefits.This amount, however, is well below the poverty line, which is generally $14,580 for a one-person household in 2023.

Avoiding Social Security Garnishment for Student Loans

You can avoid garnishment of your Social Security benefits by getting your federal student loans out of default and back into good standing. There are two ways to get federal student loans out of default: 
  • Student loan rehabilitation: With this option, you must agree in writing to make nine reasonable monthly payments within 20 days of the due date. After you’ve made these nine payments within a 10-month period, your loans will be back in active status. If you opt for loan rehabilitation, the record of the default will be removed from your credit report (unless you’ve already exercised this option in the past). 
  • Student loan consolidation: Alternatively, you can get your student loans out of default by applying for Direct Loan Consolidation. You must either agree to pay your loans back on an income-driven repayment plan or make three on-time, full monthly payments before you apply for consolidation. Unlike rehabilitation, consolidating your loans won’t remove the default from your credit report. 
You can also get out of default by paying back your loans in full, but this probably isn’t a realistic option for most borrowers.

Student Loan Repayment Options

Whether you’re worried about defaulting on student loans or falling behind on payments, it’s worth exploring your options for federal student loan repayment plans. Getting your loans on an income-driven repayment (IDR) plan may result in the most affordable monthly payments. IDR plans adjust your monthly payments to 5%, 10%, 15%, or 20% of your discretionary income, so your monthly payment generally shouldn’t be more than you can afford. They typically extend your repayment terms to 20 or 25 years, which could allow for taking longer to pay off student loans. (Some borrowers under the SAVE Plan may have repayment terms as short as 10 years.) Some other federal student loan repayment plans include:
  • Standard repayment: Make fixed monthly payments over a period of 10 years under the Standard Repayment Plan.
  • Graduated repayment: Make smaller monthly payments that gradually increase over 10 years under the Graduated Repayment Plan.
  • Extended repayment: Make fixed or graduated payments over a period of 25 years under the Extended Repayment Plan. If you consolidate, you may be able to choose a term as long as 30 years, depending on how much you owe.
If you’re dealing with financial hardship, an IDR plan might be your best bet. Depending on your income, your monthly bills could be as low as $0 on an income-driven repayment plan.The Department of Education’s Loan Simulator tool can help you estimate your payments on different repayment plans. If you opt for an income-driven plan, you can select a specific one or ask your loan servicer to choose whichever one would give you the lowest monthly payments. Applying to refinance student loans with a private lender may also be worth exploring. Refinancing your student loans means replacing your current loans with a new loan with new rates and terms. Keep in mind that you typically need good credit to qualify for a lower interest rate. Private lenders can’t garnish your Social Security, but they typically don’t offer protections like income-driven repayment or lengthy forbearance options. And if you refinance federal student loans, you’ll lose access to federal forgiveness and protection programs. If you need these programs, or you think you might need them in the future, refinancing might not be right for you. But if you don’t need them, refinancing could be an option to explore.Recommended: How Does Student Loan Refinancing Work?

The Takeaway

Defaulting on student loans can lead to a host of negative consequences, including garnishment of your wages, tax refunds, and Social Security benefits. If you’re worried about falling behind on payments, reach out to your loan servicer about your options.Switching to an income-driven repayment plan, for example, could make your bills less burdensome and prevent you from falling into default. You could also explore student loan refinancing. If you could qualify for a lower interest rate, and as long as you don’t need federal forgiveness programs and protections, it might be an option for you. (Refinancing for a longer term may increase your total interest costs.)If you’ve already defaulted on loans, consider applying for loan rehabilitation or consolidation to get them back into good standing. Unlike private student loans, there’s no statute of limitations on federal student loans. The government has wide-reaching powers of collection, which it can exercise throughout the life of your loan to recoup the debt.If you’re struggling with defaulted student loans, you may also connect with a student loan counselor to discuss your options. If you’re searching for a nonprofit counselor, look for someone who’s affiliated with a reputable organization, such as the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America.

Frequently Asked Questions

Can student loans garnish your Social Security check?
Are student loans forgiven if you are on Social Security?
How much can be garnished from Social Security?
Photo credit: iStock/Ridofranz

About the Author

Rebecca Safier

Rebecca Safier

Rebecca Safier has nearly a decade of experience writing about personal finance. Formerly a senior writer with LendingTree and Student Loan Hero, she specializes in student loans, financial aid, and personal loans. She is certified as a student loan counselor with the National Association of Certified Credit Counselors (NACCC).
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