Student Loan Collections Represent a New Nightmare for Social Security Beneficiaries
Americans of all ages are staring down a long future of financial insecurity, and we did not get here overnight. Student loan payments may not be the biggest financial burden in terms of dollars and cents, but they are a pain point because of the unrealized dream that borrowing money for college would lead to a future of financial stability. Many thousands of people who borrowed federal student loans when they were in their 20s and 30s are still paying in their 50s. The reasons for this are several, but senior student loan borrowers may be in for an unpleasant surprise this summer. The federal government has announced plans to garnish the paychecks of student loan borrowers whose loans are in default. Social Security beneficiaries who have defaulted on their student loans could see up to 15 percent of their checks garnished, starting as early as June 2025. If you are no spring chicken and you still have student loan debt following you around, contact a Philadelphia debt relief lawyer.
Federal Government May Begin Garnishing Student Loan Borrowers’ Social Security Checks Next Month
Seniors have plenty of financial worries already, even before the recent announcement about garnishment of Social Security checks for beneficiaries whose student loans are in default. Many seniors, including a considerable number who have attended college, rely on Social Security benefits for most or all of their retirement income. Borrowers can begin drawing Social Security when they are as young as 62, and many seniors retire because they are not healthy enough to work, not because they have enough money, or any at all, saved for retirement.
How did so many seniors end up with student loan debt? Aren’t college students about 40 years younger than Social Security beneficiaries? With income-driven repayment plans, you might make payments over 25 years. If you start repaying at age 40, you could still be paying at age 65, and if you miss several payments, your loans can go into default.
Student loan lenders offer options for former students to delay making the first payment. Kicking your student loan payments down the road until you are 40 is easier than it sounds. Furthermore, not all college students are fresh out of high school. Many of the Social Security beneficiaries who still owe money on student loans took out their loans when they were in their 30s and older. Furthermore, Parent PLUS loans specifically target older borrowers. These loans are for the parents of college students. Therefore, unless you became a parent at a young age and paid off your Parent PLUS loans quickly, it is more likely than not that you will still owe money on your Parent PLUS loans when you become eligible to draw Social Security.
Contact CONSUMERLAWPA.com
A Philadelphia consumer law attorney can help if you are close to retirement age and still owe money on your student loans. Contact CONSUMERLAWPA.com to set up a free, confidential consultation.
Source:
cnbc.com/2025/05/14/social-security-benefits-at-risk-for-defaulted-student-loan-borrowers.html
