If you are receiving Social Security Disability and have failed to pay you student loans, the government may reduce your monthly benefits. According to the Government Accountability Office, 155,000 Social Security beneficiaries had their payments reduced during 2013 because they had defaulted on their student loans. Every year since 2002, the government has become more aggressive in seeking repayment of student loans. Unfortunately, these aggressive tactics are becoming a nightmare for thousands of disabled Americans who rely on Social Security Disability as their only means of financial support.
71 % of those who saw their benefits reduced are SSDI beneficiaries. The rest are receiving Social Security retirement. There are many critics of these aggressive student loan collection practices. The obvious question raised is why, is the government going after people who have demonstrated that they cannot work due to a physical condition or illness.
Its important to note that the amount of the offset in these cases is significant. The average Social Security monthly payment is $1,200 and the usual amount taken away from the monthly check of those who have not paid their student loans is $180.
This issue has caught the attention of Massachusetts Senator Elizabeth Warren, who introduced a bill earlier in 2014 to allow better refinancing of student loans. Unfortunately, her initiative did not go very far.