Social Security Benefits and Student Loan Debt Collection

Social Security recipients have benefits with held to compensate for student loan default. The Department of Education uses debt collection methods including offsets from both disability and Social Security benefits.  However, there is a program for “disabled borrowers” which can be accessed through the Department of Education website:  http://disabilitydischarge.com .

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Those who are  disabled and do not make more than a poverty level income may be eligible to have federal loans discharged due to total and permanent disability.

Social Security Disability Insurance (SSDI) has been called by the Republican Conagress a “welfare program for the long-term disabled” filled with fraud and abuse.

The Protection of Social Security Benefits Restoration Act, was introduced by Senate Finance Committee Ranking in April of 2017.  It would repeal a law that allows earned benefits to be garnished by the federal government to collect student loans.  Benefit garnishment has increased from 36,000 in 2002 to 173,000 in 2015, including people under 65 who receive Social Security Disability Insurance.

SSDI beneficiaries are overwhelming over the age of 50.  Shifting the official retirement age from 65 to 67 those who remain in the workforce at an older age are subject to disabilities particularly in the manual-labor job category.  Over 2/3rds of the SSDI beneficiaries are over 50.

Areas of the US are known as “disability belts” located in  Appalachia, the Deep South, and the Upper Midwest.  The work requirements the Trump administration wants to impose on some SSDI recipients will be hard for rural areas such as southwestern Virginia to accommodate without federal support. In many places, jobs don’t exist or aren’t suitable for older workers managing chronic conditions.