Lifelong Learners, Beware! Federal Lenders Are Coming To Garnish Your Social Security Check

Once your children are past the baby stage, you have more time to pursue your own goals, and for many parents, that means finishing the college degree program that they left when their children were born or seeking an advanced credential to help them achieve their career goals.  Unlike younger students, college students over 30 are unlikely to get tuition money from their parents, so they tend to borrow even more in student loans.  Between deferring your loans due to financial hardship and income-based repayment plans where you make payments over decades, there are plenty of scenarios where you might still owe student loans in your 60s.  If you borrowed Parent PLUS loans to help pay your children’s college tuition, the chances are even higher that your repayment obligations will continue into your retirement years.  A new policy promises to garnish the Social Security checks of elderly borrowers who have defaulted on their student loans.  If you are already retired on a shoestring budget and garnishment of your Social Security check is the last thing you need, contact a Tampa estate planning lawyer.

Medicaid Isn’t the Only Government Entity Gobbling Up People’s Social Security Checks Anymore

Retirement is one of the areas of life where the rich get richer and the poor get poorer.  All Americans ages 62 and older have the right to draw Social Security.  If you have ample retirement savings through your employer or in personal accounts, then your Social Security check is just the icing on the cake.  You can spend it on fun stuff for yourself or on being generous toward the people you love.

If Social Security is your only source of retirement income, the very same government who gives it to you is eager to take it back, instead of taking it from those who have money to spare.  For example, if you enter a nursing home as a Medicaid beneficiary, then Social Security sends your benefit check to Medicaid, which keeps the whole amount for itself, except the personal needs allowance, which is $130 per month in Florida.

Student loan collections paused for a few years, but you were probably too stressed out about your other financial problems to notice.  Collections have resumed, and now they are even more aggressive than before.  The federal government has just introduced a rule that federal lenders may garnish the Social Security checks of borrowers whose student loans are in default.  The garnishments will begin in June 2025.  The maximum amount that lenders can garnish is 15 percent of each check until the loans are repaid.  If you are in default on your student loans, now is a good time to contact a lawyer about making do with 85 percent of your Social Security income.

Contact David Toback About Retirement in Desperate Times

A Central Florida estate planning lawyer can help you if you are retired and still owe money on your student loans.  Contact David Toback in Tampa, Florida to set up a consultation.

Source:

cnbc.com/2025/05/14/social-security-benefits-at-risk-for-defaulted-student-loan-borrowers.html