Could Student Loans Cost You Your Social Security Benefits?

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Social Security garnishment for student loans isn't unheard of, but you may be able to reduce the amount taken out of your check.

This post comes from Christine DiGangi at partner site

Much like unemployment isn’t going to get you out of repaying student loans, retirement isn’t going to, either. Social Security recipients, whether they’re retired or disabled, can have up to 15 percent of their checks taken for defaulted federal student loans, and it’s a common problem.

Joshua Cohen, a consumer law attorney who bills himself as The Student Loan Lawyer, says he hears from someone in this situation about every two weeks. He’s received a steady flow of clients losing Social Security to student loan payments since he started practicing in 2008.

“A majority of them are for parent PLUS loans,” Cohen said. “Nobody told them about affordable repayments, and there’s a sizable number of boomers and others who were forced into retirement earlier than they expected because of the downturn.”

He remembers the first client he encountered with this issue: A retired truck driver came to him after his Social Security checks came in smaller than usual, and Cohen helped him consolidate his loans to emerge from default. He then entered an income-contingent repayment plan of $5 a month, eliminating the offset from his Social Security payout.

How to avoid losing Social Security to student loans

This applies to any loan situation: When you realize you can’t afford the payments, act immediately. Student loans offer a variety of repayment options allowing borrowers to lower their monthly payments, and contacting your loan servicer to work out an affordable payment should be your first step.

“If that doesn’t work, the Department of Education has an ombudsman you can contact, and if that fails, contact a lawyer,” Cohen said. “When contacting the ombudsman, there’s no harm in contacting the CFPB [Consumer Financial Protection Bureau], because it has jurisdiction over student loans.”

Letting unaffordable loan payments go unaddressed is a near-certain route to default, which can seriously damage your credit, not to mention the potential wage garnishment (or Social Security offset). That path only holds more trouble.

“For a lot of my folks, they are barely surviving to begin with,” Cohen said. “They have credit card debt, because that’s how they’re charging their prescriptions. The Social Security check is their credit card payment. It could be their auto insurance if they’re still driving. It can sometimes cut into their food bill.”

Student loans have a lot of potential to damage your credit and your well-being, so prioritize your payments and take advantage of assistance programs available to you. You can see how your student loans are currently affecting your credit scores for free on

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