If your student loans are in default, your Social Security check could take a hit. Most people don’t think about student loans and Social Security in the same sentence—but maybe they should. These days, more and more older adults are heading into retirement still carrying student debt. Some owe on their own loans, while others took out debt to help their kids. Either way, that debt can come back to bite you—especially if you’re relying on Social Security to make ends meet.
Here’s what you need to know about how student loans can affect your benefits—and a few smart moves to keep your check protected.
How Student Loans Can Mess with Your Social Security
If you retire and still have student loan debt, it usually won’t touch your Social Security… unless those loans are in default. That’s when the trouble starts.
“Federal student loans that go into default can trigger what’s called a Social Security offset,” says Brian Safdari, CEO of College Planning Experts. “Basically, the government can withhold part of your monthly check to collect on the debt.”
Defaulting on a federal student loan usually means you haven’t made a payment in about nine months (or 270 days). Janeil Pierre, an accredited financial counselor and credit expert, adds that more retirees are carrying student debt than ever. But if your loans are current and in good standing, your Social Security won’t be touched.
How Much Can They Take?
If your loans are in default, the government can legally take up to 15% of your monthly Social Security payment. However, they have to leave you with at least $750 a month—though that number hasn’t been adjusted for inflation in years, says CPA Paul Miller of Miller and Company, LLP. For someone living on a fixed income, that missing chunk can really sting. The good news? If your loans are private, or if they’re in deferment, forbearance, or on an income-driven repayment plan, your Social Security payments should be safe.
3 Ways to Keep Your Social Security Safe
Worried about losing part of your Social Security to loan payments? Here are a few steps that could help you avoid garnishment and hold onto more of your benefits:
1. Apply for a Disability Discharge (If You Qualify)
If you can’t work due to a permanent disability, you might be able to get your federal student loans forgiven. Janeil Pierre recommends looking into a Total and Permanent Disability (TPD) Discharge. To qualify, you’ll need to show documentation—this could include medical records or proof that you’ve been receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) for at least two years. If approved, not only can your loans be wiped out, but any garnishment of your Social Security should stop as well.
2. Sign Up for an Income-Driven Repayment Plan
Income-Driven Repayment (IDR) plans adjust your monthly loan payments based on how much you earn and the size of your household. “These plans can significantly lower your payments,” says Safdari. In fact, if your income is low enough, your monthly payment could drop to zero—meaning no garnishment at all.
3. Rehabilitate Your Loans
Loan rehabilitation is a way to bring your federal student loans back into good standing. It usually involves making nine on-time monthly payments in a row. Safdari explains that this shows the government you’re serious about repaying the debt, which can stop garnishments and remove the default status from your record.
If you’re close to or already in retirement and still have student loan debt, it’s important to stay ahead of it—especially if you’re relying on Social Security to pay the bills.
“The worst thing you can do is ignore it,” says Pierre. “Talk to a student loan expert or financial advisor to figure out your best options and protect your income.”
After all, you worked hard for those benefits—don’t let old debt chip away at them.
