Social Security Disability and Student Loans

College is more expensive than ever. Undergraduate tuition has risen to seemingly astronomical amounts in the past couple of decades to where most students will have no choice but to borrow huge amounts of money to attend college.  Just to get an idea of the numbers, tuition at Boston College for undergrad is just under $50,000 a year, with the cost of total attendance estimated to be more than $65,000.  People who also go graduate school are incurring around half a million dollars in debt on average, and that trend does not seem to be slowing anytime soon.

This seems okay at the time, because the plan is to go to school and then get a job that allows the borrower to pay back the loan one month at a time for the next thirty years.  However, things don’t always go as planned.  What happens to a person who takes out $250,000 in loans and then becomes disabled? There is no way a person can live on Social Security Disability Income of around $1,200 a month and still make loan payments.  One might think that this would mean you default on your student loans and don’t have to pay until you can, but that is not how it works in many cases.As discussed in a recent news article from Market Watch, if you default on federal student loans, which are the types of loans most undergraduates get under the FAFSA (Free Application for Federal Student Aid) program, and you are on disability, the U.S. Department of Education will allow your loan servicer (probably a private firm like NAVIENT) to garnish your Social Security disability benefits check or deposit each month and apply that money towards your student loan debt.

As our Boston disability benefits attorneys can explain, our clients who receive Social Security Disability Insurance (SSDI) benefits are in great need of every dollar of that benefits award, and it will create an extreme hardship to garnish this money.  To alleviate this burden, several democratic senators and Bernie Sanders, who is an independent, are leading a charge to stop garnishment of a recipient’s disability benefits check to repay student loan debt.  This proposed legislation would also stop the feds from being able to garnish a Social Security Old Age and Retirement benefits check to repay student loans.

However, as one might expect, this is an uphill battle, given the current makeup of Congress and the party occupying the White House.  Nonetheless, those in favor of this bill hope that there will be bipartisan support, as this is a serious problem that affects the disabled regardless of who they may have voted for in the last election.

The government was not always allowed to garnish Social Security disability payments, but a law was passed in 1996 that allows for such garnishment, so long as the borrower is left with at least $750 in income each month.  However, it is hard to imagine how anyone in 2017 (or 1996 for that matter) can survive on $750 a month.

If you or a loved one is seeking Social Security Disability Insurance in Boston, call for a free and confidential appointment at (617) 777-7777.

Additional Resources:

Senators want the feds to stop plundering Social Security to repay student loans, May 1, 2017, By Jillian Berman, Market Watch

More Blog Entries:

Acting Social Security Administration Commissioner Resigns, Feb. 6, 2017, Boston SSDI Lawyer Blog