Home > Student Loans > My Social Security Income Is Being Zapped for Student Loans!

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Federal student loans are considered the preferred way for students who must borrow because they are often much cheaper and considered “safer” than private loans. But there are hidden dangers lurking within these loans that you need to be aware of. Because they are guaranteed by the federal government, they offer the government collection powers that ordinary creditors and collectors only wish they had. A reader recently wrote to us:

I am facing a crisis. I will be 66 in September. I am presently receiving Social Security and a small VA monthly pension. The Dept. of Education is threatening to garnish my income by the end of this month. I don’t really know what I’m going to do. What can I do to stop them?

While “private student loan lenders can’t touch your Social Security income,” the federal government can go after your Social Security payments to collect delinquent federal loans, explains attorney Joshua R. I. Cohen, a consumer law attorney who specializes in student loan law. This is part of the “Treasury Offset” program that also allows tax refunds to be intercepted to offset delinquent federal student loans.

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There are limits to how much Social Security income can be taken each month, though. According to the website StudentLoanBorrowerAssistance.org:

The government cannot take any amounts you get below $9,000/year or $750/month. No more than 15% of your total benefit can be offset.

In other words, if you receive Social Security payments of $750 or less per month, the federal government wouldn’t be able to take anything from your Social Security checks. If you received $1000 a month, though, they would do two calculations: The total benefit minus $750 ($1000 – $750 = $250) and 15% of the total benefit ($1000 x .15 = $150). Since they can offset the smaller of those two amounts, the maximum offset in this example would be $150/month.

Veteran’s benefits, including our reader’s VA pension, on the other hand, are exempt (or “safe”) along with other benefits such as Supplemental Security Income (SSI). A list of exempt benefits is available here.

Free Credit Check ToolIf you receive a notice of offset from the Department of Education, it’s important to act quickly. You have just twenty days to request a review. If you do, you’ll be given the opportunity to review your account records, demonstrate why your loan isn’t in default or is not enforceable (if that’s the case), and to avoid offset by arranging to repay the loan. Most importantly, requesting a review will halt the offset until it is completed. If you don’t respond during that short window, you can still request a review later, but it won’t stop the offset.

[Related Article: Over 50 and Deep in Student Loan Debt]

For someone relying on a limited income such as Social Security, anything that reduces their income can be devastating. So what can you do to reduce or suspend an offset? Cohen offers two suggestions:

  1. Temporary Fix: Demonstrate to the Department of Education that the offset will create a hardship. You’ll likely have to fill out a detailed financial hardship form, and it’s important that you fill it out as completely as possible. The Department of Education may require other information, so follow the instructions you receive carefully. If you are granted a reduction or suspension due to hardship, it will be good for twelve months, and must be renewed every year.
  2. Permanent Fix: Get out of default. Once you get your federal loan out of default, you can apply for income-based repayment which could bring your payments down to zero, Cohen explains. That program also comes with loan forgiveness for balances remaining after 25 years.

To get out of default, you may be able to consolidate or rehabilitate your loans. Either way, you only get one shot so it’s crucial that try to find a solution that will work for you in the long run. This worksheet summarizes the pros and cons of consolidation and rehabilitation. Again, if you successful in consolidating or rehabilitating your loans, you will then be eligible to apply for programs like Income Contingent or Income-Based Repayment Plans, which can lower your monthly payments to as little as zero.

Getting nowhere in your efforts to rehabilitate your federal student loan? You may want to talk with a consumer law attorney. “You have the legal right to cure your loan and get it out of default so take advantage of it,” says Cohen.

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  • http://www.keelstech.com/ Lee Keels

    Social Security does not count as income on an income based student loan payment plan. Therefore if the majority of your income is Social Security then your loan payment amount will always be zero.

  • Dee

    I should tell you that the student loan was secured in 1993.

  • Dee

    I know this post is old, but we need help. My mother was on long term Disability since 2000 and recently reached the age of retirement. Over the years she supplied documentation to the [redacted] about her disability, which for someone reason the paperwork has disappeared and they never received it. The loan was for a small amount 5K and over the years they did receive some money for the loan, but now its up to 30K. They started to garnish her Social Security retirement checks even though she thought this was all resolved. I filled out the TPD disability application and uploaded a recent letter from Social Security office indicating when she was on long term disability. Only because they sent us a letter stating they wanted to know when her next review was. Well she won’t have another review, because she is at the age of retirement. We never did receive a letter stating they received the correspondence that was uploaded from the Social Security office. My question is how do you deal with these people. She has been disabled for 15+years and her status doesn’t change just because of her age. She will always be disabled and what’s worse I can’t even get a doctor to admit she is disabled because they don’t want to be responsible. She has several medical conditions, including COPD, Lymphedema,Emphysema,Osteoporosis and curvature of the spine. Also, they will not supply an accounting record for the loan.

    • Jeanine Skowronski

      Hi, Dee,

      You may want to consult a consumer attorney about your options.



  • Clennis Jones

    I have a problem with getting refunded approx. 3 offset payments that were taken from my disability check. I was approved for discharge 7/22/2015. here’s where I have a problem. I was given no notice of the offset. Couldn’t find out anything until I went to the SS office, The rep at the SS office was new, she provided me a copy of the notification & who was responsible for the offset. It was from NELNET, the agency charged with collecting student loans it was the proper notification as to why my benefits were being offset. But here’s where I have a problem with the offset. The notification letter was sent to Grinnell, Iowa, I live in Muskogee,OK. Never lived in Iowa, don’t have relatives in Iowa. The money was missing from my check, I wasn’t notified. Isn’t this lack of notification against federal law? What is my recourse to have the offset funds returned to me? Dept of Education refuses to refund my money. And ignores my objection as to not being notified.

    • http://www.credit.com/ Credit.com Credit Experts

      We asked disability lawyer Jonathan Ginsberg, and here’s what he said:

      It appears that there was a notice problem from Nelnet. Since the reader never lived in Iowa, I would argue that sending a letter to an address there was improper.

      One option, which is not practical because of the expense, would be to file a lawsuit against Nelnet (probably in federal court) to stay the seizure and to force them to return the funds. A better option would be to go through the ombudsman programs for the U.S. Department of Education and the Office of Inspector General for Social Security:
      Dept. of Education ombudsman: https://studentaid.ed.gov/sa/repay-loans/disputes/prepare/contact-ombudsman
      Social Security Office of Inspector General http://oig.ssa.gov/

      This is also a situation where the reader’s elected representatives may be able to help. Most U.S. Senators have employees on staff to handle Social Security problems.

      It also would appear that the reader might have an FDCPA claim against Nelnet.

      Finally, assuming this is a federally issued or guaranteed student loan, the reader should apply for reduction or cancellation based on disability.

  • zac

    Hello Gerri! I have taken a federal student loan of 20,000 and I had my father co-sign it. I’m currently going through a financial crisis and not able to pay back the loan.
    My question is would they go after my father’s SS income check? He receives 750 a month.

    What happens in those situations?
    Thanks so much for your time!

    • http://www.Credit.com/ Gerri Detweiler

      Since your father only receives Social Security benefits of $750 a month he should be OK.

      Have you looked into IBR, deferment or forbearance to keep the loan from going into default?

  • Sharon Mendoza

    Oh and I don’t even know the lender nor amount which is probably in the gazillions.i had no letter no indication what so ever is that legal?

    • http://www.credit.com/ Credit.com Credit Experts

      If it is a federal loan, you can try for income-based repayment (payments as low as $0). Supplemental Security Income (SSI) cannot be taken, but Social Security can.

  • Sharon Mendoza

    I had a 2500 dollar loan 27 years ago I enrolled in a school trying to get off of welfare 6 weeks into the school I couldn’t pay my rent and childcare I hadn’t received the money they promised to pay child care and expenses. Needless to say the school didn’t give me the money they kept it and a second check for 2500 came I refused to sign it to them and had put in a leave of absence so I could try to save my home needless to say I lost my home and when u went back to the school it was gone the bank below said they closed and we’re under investigation for loan fraud. I called every number tried to find out were my school United College of Business had moved exhausted all resources. I was on the county aid and got a letter to pay back this loan I called them explained I can’t I’m not working I’m receiving 560. A month welfare they said I had to pay something or they would take more then half so I send them 25 dollars my electric bill money . Years later I got off welfare worked for county office of education 11 years didn’t hear one peep from them lost my job when I got hurt and never was allowed to return my injury is progressive so all stressed I had 1st heart attack next year another next year another but ssi denied me until I had lost my home my car living place to place no income until I turned 50 two years no money my family got scattered my whole entire life turned upside down. Then I get approved ssdi in march. Then July I see discrepancy no warning no letter so ssdi says they put 1076. The direct deposit card says 914. So I call them they give me a number but I’m like hold up this unexpected garnishment out me back to square one I cannot live paying 700 rent plus bills and personal hygiene car insurance food so here I am trying to figure this out can’t seem to get answers have been homeless several times the first time being because I tried to get education like this job agency said that sent me to that school saying didn’t have to pay money back cuz welfare people get grants to get off welfare but the school took all the grant money and I didn’t even get the tools to get a job in 6 weeks.

  • samuelstorns

    I owe over 42k. I am being garnished. The agency doing the work for the DoE is unwilling to take voluntary payments. I was informed I have rehabilitated once in my life therefore I cannot do so again. I called a consolidation company and they said they cannot help if I am being garnished. Therefore I can never get my loans out of default and will be garnished until I die, I am 44. What can I do?
    One other question. I receive mileage pay and car allowance, from my employer, which is not federal taxable income but is being garnished also. Is that right they garnish those amounts as well?

    Thank you so much in advance.

    • http://www.Credit.com/ Gerri Detweiler

      I would recommend you either talk with a consumer law attorney with experience in student loan law or with a reputable credit counseling agency that provides student loan counseling to see what your options are. To find a student loan lawyer visit the website of the National Association of Consumer Advocates or TheStudentLawyer.com. Counseling agencies that provide services at low cost include MMI, Greenpath and Consolidated Credit.

  • http://www.Credit.com/ Gerri Detweiler

    I am sorry but I am not familiar with how worker’s comp settlements affect SSI or SSDI. Since you are working with an attorney this would be a great question to ask him or her.

    • Belinda Lowe

      Ok, thanks Gerri

      • http://www.Credit.com/ Gerri Detweiler

        Belinda – please note I updated my previous response as well.

  • http://www.Credit.com/ Gerri Detweiler

    Are you in deferment right now on your loans? Then they aren’t just going to grab your SSDI to pay for your student loans. If you are not in default they won’t offset your benefits. If you are in default then they may, though as the article states, they are supposed to give you written notice and the chance to claim hardship before you do.

    Have you looked into income-base repayment? If you can’t afford the full payment you may want to check into IBR to get your payments reduced.

    • Belinda Lowe

      Thanks for the quick response. My loans are not in default and I called today to request an income base repayment. Thanks again for the information.

      • http://www.Credit.com/ Gerri Detweiler

        You’re welcome. We hope it works out for you.

  • http://www.Credit.com/ Gerri Detweiler

    My understanding is that the forgiveness begins after 25 years of qualifying payments so it’s not retroactive to the date the IBR program started. I would recommend you read this free guide: Department of Education guide to Income-based Repayment. Do you own homework — there are numerous complaints about servicers providing wrong information to borrowers.

  • kay

    My soon to be ex daughter in law has abused her student loan privileges. She takes out money then wastes it on herself, buying clothing, had sexy lingerie photos taken, eats out..a lot, takes out cash, so far reported out of 4 years she’s taken almost $14,000 in cash. She for the last 2 years is only taking one class, yet last year alone she took out $15,000 in student loan money. None of her statements show where she paid for any classes. Should she be reported for fraud? Her loan debt so far is over $45,000.

    • http://www.Credit.com/ Gerri Detweiler

      You can certainly try contacting the Department of Education, but I don’t know how successful that will be. As long as she does not have a cosigner (not likely if these are federal loans) then it sounds like she is digging herself into a hole. These loans will not just go away and she will be dealing with lenders and collectors for decades to come.

      • kay

        Thank you, Gerri. The problem is she is trying to make my son pay half of the $45,000. Their divorce isn’t final. He had no idea she was taking money out of the student loan. He thought at most the student loan might be $12,000 at the most… He’s always been careful with his credit rating, I believe her goal is to force him into bankruptcy. With support (for now) her monthly income is $3,600, yet she opened a new charge card and started using an older card that she had told him wasn’t being used…another $3,000!

        • http://www.Credit.com/ Gerri Detweiler

          Ah yikes. Hopefully he has a good attorney. So sorry to hear what he’s dealing with.

  • kidsandliz

    The rules were, at least when I investigated this about 3 years ago that any loans you got AFTER you were declared disabled were not able to be discharged under the disability clause. If you put them on one of the income based/contingent programs you may well owe nothing a month as they set aside the first $750 of what you get from any source and then it is only 10 or 15% (depends on what you qualify for which is dependent upon the age of the loan and whether or not they are private loans) on what is left.

  • kidsandliz

    I was wondering if you can declare bankruptcy to ditch student loans (I know this is a very hard route) if your ONLY debt is student loans and medical debt (that I wouldn’t want to include as then they’d refuse to treat me for cancer anymore). I am on my third cancer (this one has no cure but a fairly long lifespan). I am 61 but will need to work for as long as possible for financial reasons.

    My loans are on the 30 year plan, paid off when I am 83 although I won’t be able to afford the payments once I no longer can work and so will have to switch to a different repayment plan (if I live that long LOL). I don’t want to go on income contingent/based because when I had a job I was fairly well paid and payments would be higher than they are now. Presuming I get another job like that I need to channel that money into retirement since I don’t have nearly enough in there to live and pay for cancer once I no longer can work (clearly I can’t retire in the normal sense of the word), and get out of medical debt enough that it isn’t such a stressor. I am NOT disabled. Was fired from my job for cancer (EEOC complaint pending).

    Right now I am legally homeless (living in a friend’s basement due to running out of money and a gofundme is helping me pay for health insurance since this state did not expand medicaid, have food stamps and some employment – looking for full time professional employment).

    If my cancer gets to a certain point it on the fast track list for social security disability however at something like $849/mo I don’t see how I can live on that either so hoping that I never have to file for disability and loan forgiveness under that as I understand under Dept of Ed rules then I can’t earn any money at all for 5 years as their rules are stricter than social security disability. Then how do I live? I can’t.

    The only way out I see is attempting bankruptcy but I have no debt other then school loan, $6100 on a 10 year old car (my 25 year old one died earlier this year) that I am making payments on time on, and medical (no idea how much it is, and it will just go up by $5000 shortly, but making payments on my payment plan because if I don’t they won’t see me – this is why I am homeless – every penny I make goes to medical debt, health insurance and now car payments so I can even get to work – no public transportation in this county). Can I even do this with no real, actual debt other than this? Right now loans are in unemployment deferment with interest capitalizing. I had $136,000, paid down to $94,000 but with capitalized interest is now back up to $105,000 (I think – would need to check – been in unemployment deferment since Jan 2013). Suggestions?

    • http://blog.credit.com/ Kali Geldis

      Thanks for sharing your story, we’re wishing you the best of luck for your health and finances!

      You may be able to get your student loans discharged due to disability, and the tips in the above article are some of the best we have on that topic. You may want to contact a bankruptcy attorney to discuss your options — they’re going to have the best insights into next steps.

      • kidsandliz

        Not disabled so that is out. Actually would rather work and have the money to be able to pay my loans!!!! LOL Financially I’d be far better off than I am now. Cancer does not automatically mean disability. Bankruptcy lawyers are well known for not knowing that you can, under some circumstances discharge your loans that way. There was a study I saw were many students didn’t even include their loans or didn’t do what they needed to do paperwork wise to be able to discharge them when they successfully declared bankruptcy likely because of ill informed attorneys. That is why I asked this question here. I figured I might get a more informed answer. Then if I did declare bankruptcy I’d know what the attorney needed to do in case they did not.

        • http://www.Credit.com/ Gerri Detweiler

          I can’t imagine the stress this debt has created for you during your illness.

          We’re sorry we can’t be more specific about your prospects. This is a specialized area of law, even for consumer bankruptcy attorneys. And it’s no surprise a lot of them don’t practice many of these cases: they can be very expensive and debtors often don’t have the kind of money needed.

          We have written a couple of articles that may be helpful to you: How to Get Your Student Loans Forgiven in Bankruptcy and
          Will You Finally Be Able to Get Rid of Your Student Loans in Bankruptcy?

          • kidsandliz

            So how do you even find an attorney with this specialized knowledge? For close to a year I have been trying to get a question answered about this. Locally it appears I know far more than the attorneys I have talked with.

            My question is, that I can’t find, or so far get, an answer to is: Can I file chapter 7 if my ONLY debt included is student loans where I am planning to file an adverse action? If I dump my MD Anderson Cancer Center debt they will dump me so can’t do that. If I dump my car note (for a 10 year old car bought to replace my 25 year old one that blew an engine bearing earlier this year) I don’t have a car. Those are the only debts I have. Maybe I shouldn’t have been as responsible (I am legally homeless at the moment) with what money I do have and run up a bunch of bills, waited to be evicted for non payment of rent rather than leave when I had no more money to pay so I still had a good landlord reference…

          • http://www.Credit.com/ Gerri Detweiler

            There are two places to look. One is the website of the National Association of Consumer Bankruptcy Attorneys but they don’t break it down by specialty. So what you might do is compare that with results from a search at the website of the National Association of Consumer Advocates (where you can break it down by expertise) and/or the website of TheStudentLoanLawyer.com where graduates of that training are listed. A match won’t necessarily mean they take this on but it’s worth trying.

            The other option would be to try to do it yourself. At least one researcher found that borrowers who went that route has as much success as those who hired attorneys. And this article indicates one group of attorneys are working on materials that may be used by pro se borrowers:
            Credit Slips blog

          • kidsandliz

            Thank you.

  • TC

    I wish to retire next year. My husband is already retired and gets SSI, a pension and has a 401K. My SSI payments will be less than $500 a month. Can they only garnish my SSI or do they consider my husband’s as well (my name is the only one on the loan)? And since my SSI is less than $750 month, if they can only garnish from my SSI, does that mean they cannot garnish anything? I have been paying monthly for 13 years, never missed a payment, had one 3 month deferment early on. But the interest is making it impossible for me to get much below my original loan. I owe $87,000 and by now I have paid $50,000, but the interest has only decreased my total debt by a few thousand dollars. I am self-employed and have never made enough to pay beyond the minimum.

    • http://www.credit.com/ Credit.com Credit Experts

      It might depend on whether you live in a community property state (in that case, it won’t matter whose name is on the loan). SSI (Supplemental Security Income) cannot be garnished.

    • http://www.Credit.com/ Gerri Detweiler

      You receive SSI? According to StudentLoanBorrowerAssistance.org: “Supplemental Security Income (SSI) cannot be taken. This is very important because collection agencies will sometimes claim that they can take SSI. This is not true and it is the type of statement that violates fair debt collection laws.”

      However, it does sound like you are struggling with your student loan debt. Are these federal student loans? If so I encourage you to look into Income-based Repayment which can reduce payments based on income.

  • copwatcher

    I find the garnishment process interesting and irrational at the same time. If you are a younger than retirement age employee in California and you make 310.00 take home disposable income or less, the Student Loan people can take zero amount because if is what is needed to survive, or livable income I think it is called. Yet, when you get older, retirement age, and you are not able to make as much, or work as much, because you are older, your body can’t take it physically, the period when you need the money more than when you are younger, anything above 750 a month they can take. 750 divided by 4 weeks in a month is about 195 a week to live on when you are elderly and have expenses such as medication and need money to just stay alive and healthy. When you are younger and more capable, you can take home 1340 a month, almost double. This law is inconsistent and does not make sense. I can see them maybe taking part of your social security income which was earned while a garnishment is in place, but not what was paid before. Also, they may be taking 15 percent of your Social Security contribution anyway before you pay it as Social Security deductions are not included in the Federal Formula for wage garnishment as a deduction, they are included as part of you livable income from what I have read. I have also read that it is not included as part of your livable income. If it is not included in the deduction to get to livable income, then, if you make 400 a week in California, livable income, they can take lets say 25 percent , they are taking 25 percent of your social security contribution every month and bringing down your payable benefits in the future, the amount plus accrued, plus taking anything over 750.00 a month as well. You are being robbed. Can someone clear this up. I have read the formula with two different interpretations about the deduction from some of these supposed “experts” who enjoy writing things on the internet and are sometimes wrong. Also, what if you work two minimum wage jobs, your income is double, or 620 a week lets say, how do they get you on that one? They can’t issue a garnishment for anything less than 310 take home from one employer, and if your income changes weekly how do they keep track of it. They can’t require the two employers to talk to each other and decide who is taking out what this week and next week. Anyone? .

  • http://www.Credit.com/ Gerri Detweiler

    @mike – this is a really good question. As I understand it you are trying to find out whether there is a record of the student loan payments made by offset twenty-some years ago. The short answer is I don’t know. But my first suggestion is that you ask the IRS. I know you can order a wage and income transcript for previous years. (From the IRS website: you must submit Form 4506T to request an account transcript for a tax year not available through get transcript online or by mail.) I am not sure if it will contain information about the offset.

    Will you call them and find out? If you can’t get it that way, let us know and we’ll try to dig a little more.

  • Seren ferch Dafydd

    1.Check to see if it is actually the Department of Education that owns the loan. If you loan is older than 10 years, it was likely sold to a Collection Agency. Are you sure it was actually the Department of Education and not the debt collector you got the summary from?

    2. Request a written history of your loan and all repayments. If debt collector cannot provide it, they may be bogus.

    3. Write the Department Education and explain the problem. There are programs in place to allow loan forgiveness for loans over 25 years old or in cases of disability. They may can help you if the loan is owned by a debt collector not the government

    4. With the small monthly payment, what is probably happening is that your payment is smaller than the requred payment to pay off the loan. The difference is added to the loan each month.

    Ex. Lets assume your total loan balance is $20,000 at 5% to be paid back in 10 years.

    Loan Balance:……..$20,000

    Loan payment:……. $212.12……….$128.80 (p)…..$83.33 (i)

    Your payment:……..$100.00
    Toward principle……$100.00
    Unpaid principle…….-$28.80
    Unpaid interest……..-$83.33
    Total unpaid………….$112.13

    Original loan balance $20.000
    New loan balance:……$20,112.12
    New monthly payment: $213.32

    The only way to fix this is to find some way to increase the payments as with the example above, even extending the repayment to 30 years requires a $107.36/monthly payment.

    • Jerry Martin

      I only get 750.00 a month because Dept of Ed takes the rest. There is no way I can increase my payments. I pay 515 in rent and 75 a month for utilities. I still need the rest for food and personal items. If you could suggest something worthwhile, I am open to it but everybody tells me to just pay more. I guess I could NOT eat, then I could increase my payments, or NOT pay my utilities. I live in Iowa so it doesn’t get THAT cold here. Sorry, sarcasm is all I got left.

  • http://www.Credit.com/ Gerri Detweiler

    What kind of debt are they garnishing it for?

  • sherain moseley

    I am 61 my only income is ssdi. Student put a lien on my bank account and took 179.00. What can I do. I have been disable for 30 yrs.

  • ArmyVet76

    I have not had this issue in 6 years. I have been forgiven and my loan is expunged due to my Epilepsy. I make just over $900/month and get $200 taken out for medicare, and NOW THIS?! A 20 year old loan that was “forgiven”?

    • http://www.Credit.com/ Gerri Detweiler

      If you can’t get this resolved through the Department of Education and the CFPB, you may need to reach out to a consumer lawyer with expertise in student loans. You can find one TheStudentLoanLawyer.com. Hope you can get it resolved asap.

  • Peggy S. Lindsay

    I am 44 and have a 12 month old who is severely disabled. I can’t place him with anyone other than me 24/7 so due to this I am unable to work and have to live on his ssa of $721. A month. I was looking forward to my tax refund as it will help with bills and much needed things for the baby. It was accepted and said it would be deposited into my account now after digging around I found out they are sending it to the us dept of Ed. For my student loans which I thought were in deferment. Now this is causing me and my kids a hardship but they refuse to send me the refund. I have arranged for rehab of the student loan and the other one is actually in forbearance. What can I do to get my refund owed to me?

    • http://www.credit.com/ Credit.com Credit Experts

      We have emailed you. Please check your inbox

  • http://www.Credit.com/ Gerri Detweiler

    The FAQ section on DisabilityDischarge.com explains the process if your application is approved. My understanding is that this should be communicated to SSA but you may want to contact them to confirm. You can call Nelnet at 1-888-303-7818.

  • http://www.Credit.com/ Gerri Detweiler

    Really sorry to hear what you’re going through. Have you tried the two steps in the article?

  • http://www.Credit.com/ Gerri Detweiler

    Unfortunately I have no idea whether you will be approved for your discharge or not. I imagine you will have to see what happens, and if you are denied, appeal the decision.

  • Maja

    My Social Security is threatened to be offset by The Department of Education by the end of this year. My loans are 32 years old and Social Security is my only income. Should I retain an attorney?

    • Gerri Detweiler

      Maja – That’s up to you, though you don’t have to use an attorney to try the two steps I mentioned above on your own. (1. apply for hardship relief 2. get your loan out of default – http://blog.credit.com/2012/05/pssst-want-to-know-the-best-kept-secret-in-student-loans/).

      • lee

        I am 72 my wife is 66 years old, she is in default on our daughters student loan over 40 years ago. Our only source of income is SS, but she gets less than $700.00 a month, I get over $1,000.00 dollars a month. She is the only signatory on the loan, I am not. Can the govt garnish my share of the ss payment.

        • http://www.Credit.com/ Gerri Detweiler

          I don’t see how, Have you been notified of that?

  • dmarshall

    what is moderation?

    • Gerri Detweiler

      I am not sure what you are referring to. Can you elaborate?

  • dmarshall

    I am 72 and my ssa retirement is $751. What can happen to me?

    • mike

      wish I had your problem stead of mine.
      the treasury cannot take from the first $750. you lucked out here

    • Gerri Detweiler

      Theoretically they could try to offset the $1 a month that is above the protected threshold of $750 per month. Hopefully the wouldn’t be that dumb but I supposed you never know!

    • Luckiestar

      I receive $754.00 and the loan people are trying to take $450 from me…but I read that they can’t take from a person that receives 750 are lessor…

  • Sammy

    I have a school loan that has been in collection since I was 26. I am now 38. I have never worked since and would like to know if they can take possession of anything I have of value?

    • Gerri Detweiler

      Sammy – What are you worried about them taking?



    • Gerri Detweiler


      I checked with Joshua Cohen, aka The Student Loan Lawyer and he said, “To the best of my knowledge, yes, they can tap both at the same time.” He added, “Tell your reader the best piece of advice is to fix his loan! – get it out of default!” Contact him at his website and he will make sure you get the help you need. He says, “NO one should be in his shoes!”

  • Michael W

    Student Victims of School Student Loan Fraud are still be help responsible for the schools fraud in taking bogus loan out in the students names. I attended Tampa College, Tampa, FL in 1990-92 and they were found in a Department of ED report #N-0020921 in 1992 that the school was guilty of violating Title IV funding requirements. Besides taking loans out in students names with out authorization, they collected this extra loan money and the employees of the school were paying them selves from the proceeds. The Problem is that the Dept of ED nor the school did not contact the student to get these bogus loans discharged due to this fraud.. So 20+ years later alleges loans for $4K are now like $38,000 with interest and collection fees applied. And since the Dept of ED did not follow up with the victims the victims are on the hook. One lady victim is not getting her 15% of her Social Security taken away to pay on fraudulent loans produced by the school. This was a clever scam because the students did not even know they had bogus loan attached to then until a few years after they left the school, because student loans are deferred until at least 6 months after they leave the school or graduate. I have an original $8K applied to my name, they can only show proof of 5 of 8 loans but yet the dept of ED won’t dismiss them, because the school was closed and the bank is long gone with the loot. This is a masterful crime that continues to victimize naive students for decades. If you are a student and suspect criminal activity, request copies from collection agencies for all loan applications. Check to see if the signature on the application are really yours or forged, check to see if the dates match, or in my case loan amounts were changed after I signed the loans. All of these loan notes are considered “Altered Notes: and un-enforceable, and need to be discharged off your record and credit reports. Also in my case I was not even eligible to receive any loans from the puppy mill school because I had one other outstanding student loan that was in default the entire time I went to Tampa College, and thus under the regulations 34 CFR 682.402d 1994 the school is responsible to repay the loan not me the borrower or student. College is a scam, and be very careful and get copies of everything and save all your documents. I have a great paper trail of all of this, and still the Dept of Ed refuses to dismiss these. My case is now at the dept of Justice here in Tampa, and I am preparing with all my documents to be proactive and go down there and try to get these dismissed one and for all before they try to steal my property assets or Social Security garnishments of 15% per month in a few years.

    • Teresa

      Wow this is exactly what happened with me. Dept. of Ed garnished my Disability check several years ago and is still taking out every month along with our income tax every year. I tried and tried to get them to understand that I didn’t take out all the loans they were saying I did. 2 of the loans were not suppose to be paid back but then financial aid workers at the time redid paper work and did them with all new figures and claimed they changed because I had become an employee of the school so therefore my classes were suppose to be 1/2 price instead of being full price and also 1/2 of my classes were life experience and again my classes were to be at a lower price. when they redone my paperwork it showed full price for all classes which were incorrect. I have fought and fought with them and finally got tired of fighting. it has been over 20+ years. was at Tampa College from 1989 til 1991.
      Michael W. I would love to talk with you more about this.

  • Maria

    Can they take social security disabiliyy income under same circumstances? Can collectors go after ssdi with same math exclusions?

  • Johanne DuFort

    I graduated from the University of Michigan School of Art a single mother of two with a BFA (magna cum laude) in 1984 and an MFA in 1986, and hopes to teach with my education certification.  I pursued jobs relentlessly and worked several simultaneous part time jobs.  I taught part time at U of M School of Art for seven years, Schoolcraft College for five years, and the Ann Arbor public school system as a substitute teacher for seven years.  I interviewed for many tenure track positions at notable colleges around the country.  When push came to shove, I didn’t really want to leave my children as I was not able to take them out of the state.  

    Between these jobs I made a substandard wage and married Robert in desperation late in 1986.  However, my husband was extremely abusive to me and my children. He would not permit me to use our household income (my contribution was meager) to pay on my student loans (amongst many other abuses).

    I left him in 1992 and became a Realtor to supplement my income in 1994.  In order to stall the Student Loan Collectors i signed a consolidation agreement in 1994.  I divorced Robert in 1996 and was awarded a small pension of $496 by DRO.

    I was spread too thin and had to quit teaching (my first love) and focus on real estate, as my teaching positions were very underpaid.  Unable to make a go of it financially, I filed for Chapter 13 in 1997 and completed the three year plan in 2000 with the help of an attorney.  My student loan was legally dischargeable!  I was led to believe that as the student loan program did not object to their participation in my bankruptcy plan and were accepting my payments that this loan would be discharged.

    I accepted Jerry’s proposal of marriage upon completion of my Bankruptcy plan in 2000.  Jerry worked at Pfizer and obtained his real estate license in this year.  In 2001 I received a notice that my student loan was not discharged due to a new law requiring the need for it to be seven years in repayment before discharge in bankruptcy and they were not going to count the years from 1986 to 1994 (before I consolidated).  By this standard my loan repayment was 5 years. This disqualified my student loan from discharge.

    Jerry and I were horrified and I felt that we should not have married.  Jerry hired an attorney to negotiate a settlement with the student loan department on my behalf and offered $36,000-40,000.  He had the funds available from the sale of his home.  At this time the student loan had accrued interest during my 3 year bankruptcy plan and was now capitalized to approximately $85,000 (or more).  They turned him down and he bought a house with this money.

    The student loan department would not negotiate a reasonable repayment based on my earnings.  The payments they demanded would have been a hardship for me.  Jerry and I still had five young adults/teenagers!  I regret to say that at this point I elected to ignore the student loan as I couldn’t work out an acceptable resolution with them.  I wish I hadn’t, but no option of a IBR was ever shared with me and the principle on the loan continued to grow regardless of any payments.  It seemed hopeless!

    In 2005-6 Jerry borrowed money and purchased a building and renovated it for his new real estate business.  He knew that Pfizer would not be an employment option for him for long.  It was perfect in that I could provide him with the broker’s license he needed to operate.  He is the owner of the LLC and I am the manager.  All monies left after paying the other independent contractors and expenses associated with the business are claimed as his annual income.  In 2012 he made $38,000. Sadly, many of the years before were losses as the real estate business is depressed.

    In 2007, The Department of Education hired the Holzman Corkery Law Firm to obtain a deficiency judgement and garnish my wages.  As I am not an employee of Jerry’s business this was not possible.  They also sent demands to all the banks in southeastern Michigan where they emptied any accounts with money in my name, of which I had one which was closed when this occurred.  Jerry hired Dan Cramer to protect his assets from them.  I was and remain uncollectable.

    I do help Jerry at his real estate office but am not paid. He cannot afford to pay me and the bills too.  I do not handle any cash; ever!  I do charge everything I buy and Jerry pays all of the bills.  Jerry seldom uses cash either, which means that all of our activities are easily tracked on credit cards statements.  Jerry pays the credit card balances in full each month.

    It’s 2012 and the Holzman Corkery Group have returned to make our lives a living hell!  Now it would appear their tactic is to prove Jerry defrauded them and therefore he should become responsible for my debt!  They wish to transfer my debt to someone who is collectable and i feel they are inventing this “fraud” issue to justify their demands for access to his information. This is a nightmare that is compromising our health and relationship.

    Jerry and I would like to work out a resolution but cannot responsibly agree to a payment plan that cripples our budget so much that bankruptcy or foreclosure become the only available option afterwards.  I am urging Jerry to be transparent with all his accounts at least to the beginning of the year.  I hope this suffices.

    We need the expertise of an attorney well versed in the ways of student loans and negotiating a settlement with the Federal Justice Department.

  • Gbabest

    I am in the same position. At least you have one income that cannot be tampered with. I, on the other hand, have a retirement that may be accountable. Had to do it all over, I wouldn’t. I guess I went back to school too late . Didn’t graduate until I was 60 years old.

    • Gbabest

      Understand completely. In the same situation and the same age

  • Pingback: Student Loan Debt Stifling Economic Recovery | ComparePlastic()

  • Mary Hunt

    Great article, Gerri. This is going to be a huge problem in the US as more and more people reach retirement having not paid off their student debt. Very sad … and scary when you think about anyone trying to exist on $750 a month.

    • Gerri Detweiler

      So true Mary.

    • Kathy

      I am a nurse of 35 plus years, and ended up disabled. I have Spinal Stenosis. I tried over and over to keep working but finally just couldn’t stand or walk for only a few minutes. Have to stretch out for a while then I can get up for a bit again.

      In 2007 I applied for Disability per my Dr. and got it first time.

      My student loan was deferred at that time. I was still sure I could support myself somehow. In 2010 they said I had to get Dr. form that said I was 100% disabled, which I did. This year 2014 they sent the letters to an old address or so they said and just started taking $154 monthly from my $904 I get monthly.

      I had to move from my apt which was $650 for a 1 bedroom. I have to go to churches to get food as it is. Seriously, I get $15/month in Food Stamps.

      I don’t have TV or any of the normal stuff. It is no fun and if I could work, it would be so much easier. I hate this. Out of what I have left I pay car insurance, and my Kaiser med. insurance.

      I earned SSI/Disability from working for many years, but even with sending in the form with 2 different Drs, over the years saying I was 100% disabled the Student Loan people still are taking my money. I have called them many times.

      They couldn’t care less.

      I can’t afford an attorney. Sure doesn’t seem right.

      I wish I could finish paying the darn loan off. Now they charged $15,000 in charges because it was deferred. for 3 years. I can’t win this thing.


      • kidsandliz

        Call the department of education and ask to speak to their advocacy department for student loans. The rules for disability discharge is that you can not have any income for 5 years besides your social security disability once they forgive your loan due to disability reasons. You need to jump through a lot of hoops to get the education discharge though – it is not automatic just because you have SS disability. Stupid I know and I thought they were going to make a law or rule that says once you qualify for SS disability then you don’t have to prove disability a second time but I have no idea if it passed or not. Meanwhile you have a bunch of forms to fill out, documentation to get for the department of education.

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