Sunday, January 8, 2023

Elderly Student-Loan Defaulters Will See Their Social Security Checks Garnished When Pause on Student Loan Payments Ends

In response to the COVID pandemic, the Department of Education stopped garnishing the Social Security checks of elderly student-loan defaulters in March 2020. However, DOE will return to that practice soon--probably by midsummer 2023.

In an article posted on, Vance Cariaga estimated that garnishment of Social Security checks will cost senior student-loan defaulters, on average, about $2,500 a year. 

Only a small percentage of elderly Americans have outstanding student-loan debt, but that percentage will likely go up in coming years, partly because millions of college borrowers are signing up for income-based repayment plans that can stretch out for as long as a quarter of a century.

In fact, Variaga cited estimates that 22 percent of Black Social Security beneficiaries will have student-loan debt in the coming years, along with 14 percent of White Social Security beneficiaries and 10.4 percent of Hispanics. 

Think about that. Virtually every American is eligible for Social Security benefits. Thus, if the estimates Cariaga cited are accurate, more than one out of five Black Americans will still have student debt when they reach retirement age.

If we were to poll members of Congress, I doubt that a single one supports garnishing Social Security checks of student-loan defaulters in their senior years. Not only is it heartless, but it's also pointless. A Government Accountability Office report that appeared several years ago found that money collected from garnishing Social Security checks seldom reduced defaulters' loan balances. Most of the garnished funds went toward paying accrued interest.

Why doesn't DOE abandon the practice? Alternatively, why doesn't Congress abolish the practice?

I'll tell you why. Despite all the rhetoric, litigation, and policy proposals, our nation's education and political leaders refuse to focus on the core reality of the student loan crisis, which is that millions of college borrowers have had their lives blighted by student debt they can't pay back. Burdened by student loans, Americans are increasingly unable to buy homes, save for retirement, or even get married or start families.

If Congress truly grasped the magnitude of the student-loan catastrophe, it would do at least these two things: It would abolish the practice of garnishing Social Security checks of elderly student-loan defaulters, and it would allow overburdened student debtors to discharge their student loans in the bankruptcy courts. 


  1. The Federal Government has become a loan-sharking racket and this is exactly what you should expect from them.

    "Quam ob rem ne sit aes alienum, quod rei publicae noceat, providendum est."
    "Therefore provision must be made to prevent debts that harm the Republic." - Cicero

  2. Yeah, it is shocking that our supposedly compassionate government garnishes social security checks of elderly student-loan defaulters while it gives tax breaks to hedge fund managers.

  3. In addition to hammering on elderly defaulters, the government continues to offer the monstrous Parent Plus program.
    On these loans, the government’s interest rates, which are higher than private banks’ — they’ve averaged more than 7 percent over the past decade. On top of that, the government charges parents an additional fee of more than 4 percent of the total loan, and the terms are relatively unforgiving. The government actually makes money off Parent Plus loans, according to the Congressional Budget Office.

    Unlike student loans, with Parent Plus, it’s difficult to get a payment plan based on a family’s income. That means that if a parent loses a job or suffers a significant pay cut, they may be stuck with monthly bills that they cannot afford.