In 2013 approximately 156,000 older Americans found their Social Security checks garnished for delinquent student loans

The other day a caller said “I used a document preparer or bankruptcy petition preparer. Certainly they have obligations to keep my social security number confidential?” Unfortunately I had to say “Oh how wrong you are.”

According to Joshua Cohen about 156,000 older Americans had their Social Security checks docked last year for delinquent student loans, according to an analysis of government data by CNNMoney.  Those numbers tripled from 47,500 in 2006.While banks and private creditors can’t garnish seniors’ Social Security payments, the government can dock the checks for repayment on certain types of debt, including federal student loans, according to

Even after entering bankruptcy, consumers can’t always discharge their student loans, adding to the problem.


Fifteen percent of a social security check can be garnished by the government to pay back debts.

This garnishment happens without any notice to the senior who probably depends on Social Security to pay for basic necessities.

Sen. Elizabeth Warren, advocate and spokesperson for the consumer.

Senator Elizabeth Warren tried to address that problem by proposing a bill that would have allowed borrowers to refinance at lower rates.  Unfortunately it was killed by the Senate earlier this year.

How much will the senior loose?  Fifteen percent of a social security check can be garnished by the government to pay back debts. That means a typical indebted senior may find $180 shaved off his $1200 monthly benefit.  In most situations this garnishment happens without the need for the lender to file a lawsuit.  Therefore, there is little to no notice to the senior that their income will be reduced by 15% until the debt is paid in full.   Of course, that debt includes interest which may be locked at over 7%.


CLICK TO OUR WEBSITEWhen will Congress realize that something must be done about student loans.  There are two facets rarely discussed about this problem:

  1. Many students see student loans as “free money”.  “My loan just came in, let’s go shopping.”  That shopping is not for food or to pay rent or car payment.  Instead, it is shopping for designer jeans and purses, or an expensive vehicle.
  2. Schools must be responsible for their process in distributing student loans.  The problem is that the more students they can convince to take out loans, the more money the school makes.  There is financial disincentive to curb how and to whom students loans are awarded.

We all must encourage students to use their common sense when accepting any money they must pay back.