New Bill Would Prevent Social Security Garnishments Over Student Loan Debt

A group of Democratic Senators just introduced a bill that seeks to protect Social Security benefits from being garnished over unpaid student loan debt, and I see this as a great step in the right direction for resolving one pretty important element of the student loan crisis.

Personally, I cannot think of a segment of the population that’s more adversely impacted by garnishments than seniors on social security, and I am uncomfortable with the idea that the Federal Government is willing to take their social security benefits to pay for over-priced colleges and universities, who, by the way, aren’t having financial trouble at all (at least the good ones aren’t).

Whether you agree with the idea that people should be protected from the poor financial decisions they’ve made (I’m on the fence about that one, because I think once you sign the paper, you should be forced to pay the debt), it seems like a good idea to protect the elderly from having their Social Security benefits stripped away. Why? Because unlike younger people, most of those on Social Security can’t simply go out and get another job.

The effort to pass this bill is being led by Oregon Senator Ron Wyden and Ohio Senator Sherrod Brown, but they have support from some pretty well-known senators from across the country, including both Elizabeth Warren and Bernie Sanders (no surprises there…).

What Would the Bill Actually Do?

If enacted, this bill would make it illegal for the Federal Government to garnish Social Security disability benefits and retirement benefits to pay for student loans that are in default.

There is an existing law on the books, passed in 1996, that only allows the Government to take as much money as leaves the Social Security pensioner with at least $750 in benefits per month, but this law goes much further in saying that NONE of their benefits can be taken at all.

One alternative that I see being viable (as this bill is unlikely to make it through the Trump Administration’s anti-regulation policies), is a compromise, where the 1996 bill would be updated based on cost of living adjustments, allowing that $750 number to rise each year with inflation.

That would be far more politically palatable for the Right, though it may not satisfy the strongest proponents on the Progressive Left.

Why Is This Bill Needed?

The number of student loan borrowers over 65 years of age having some of their wages garnished, Social Security benefits garnished, or tax refunds garnished has increased dramatically in recent years, rising by 540% between 2002 and 2015.

And while there may still be a relatively low number of people impacted in this way, those numbers are far likely to increase as Baby Boomers reach retirement age, and the college loans they’ve taken out on behalf of their children and grandchildren become due.

In fact, there are 2.8 million Americans over the age of 60 currently paying off federal or private student loans, which is a huge number, and far higher than most people would think.

On average, these borrowers owe $23,500 in student loans, which is a pretty significant amount of money for people living on fixed incomes, and often having very little options for finding new revenue streams.

What Comes Next?

While it really is unlikely that this bill gets passed (with a Republican-controlled Congress and Presidency, this sort of legislation is a long shot), at least it’s getting the conversation started.

And at some point in the (hopefully) not-too-distant future, we’ll finally get to see the details of President Trump’s Student Loan Forgiveness Plan, which may include an endorsement of this bill, or some similar initiative that seeks to protect seniors from student loans in some other way.

Unfortunately, only time will tell, so for now, we’ll all be forced to sit and wait.


Tim's experience struggling with crushing student loan debt led him to create the website Forget Student Loan Debt in 2011, where he offers advice, tips and tricks for paying off student loans as quickly and affordably as possible.

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