{"id":30709,"date":"2023-10-30T14:25:39","date_gmt":"2023-10-30T14:25:39","guid":{"rendered":"https:\/\/microloannexus.com\/personal-finance\/social-security-payments-could-be-cut-over-student-loan-default\/"},"modified":"2023-10-30T14:25:48","modified_gmt":"2023-10-30T14:25:48","slug":"social-security-payments-could-be-cut-over-student-loan-default","status":"publish","type":"post","link":"https:\/\/microloannexus.com\/?p=30709","title":{"rendered":"Social Security payments could be cut over student loan default"},"content":{"rendered":"
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As millions of student borrowers prepare to make their first student loan payments in three years, some of those who\u2019ve been making payments for decades may take a hit to their retirement benefits.\u00a0<\/p>\n

Under current law, seniors can have their Social Security benefits garnished to repay student loans in default. Social Security beneficiaries could lose 15% of their monthly benefits, according to a post<\/u> from the Legal Aid Society of Cleveland. However, these benefits can\u2019t be reduced below $750 a month or $9,000 a year. And Supplemental Security Income (SSI) can\u2019t be offset to repay student loans in default, the LASCLEV said.<\/p>\n

Currently, about 6.2% of federal student loan borrowers are age 62 or older and the average borrower in this cohort owes $41,780 in federal educational debt, including Parent PLUS loans, according to research from EducationData.org<\/u>.<\/p>\n

Additionally, Social Security recipients who are in default on student loans could be at risk of having about $2,300 in benefits garnished, according to an analysis<\/u> by the Center for Retirement Research at Boston College.\u00a0<\/p>\n

Social Security benefit withholding could be set off after a student loan has been delinquent for 425 days and the borrower fails to restart payments following notification from the Department of Education, according to the Center. But the Education Department has launched a temporary on-ramp program that could prevent borrowers from going into default at least until next year.\u00a0<\/p>\n

If high-interest debt is getting in the way of your retirement savings, you could consider paying it down with a personal loan at a lower interest rate. Visit Credible to get your personalized rate in minutes.<\/p>\n

RECESSION COULD HIT IN OCTOBER IF UNEMPLOYMENT RISES SLIGHTLY: MATHEMATICAL MODEL\u00a0<\/u><\/strong><\/p>\n

Biden launches student loan default safety net program\u00a0<\/strong><\/h2>\n

The Education Department announced an “on-ramp” program running from Oct. 1 to Sept. 30, 2024. According to a statement from the White House<\/u>, “Financially vulnerable borrowers who miss monthly payments during this period are not considered delinquent, reported to credit bureaus, placed in default or referred to debt collection agencies.”\u00a0<\/p>\n

However, interest would continue to accrue during the passing of this temporary program.<\/p>\n

“On-ramp” is part of President Joe Biden\u2019s initiative to expand student debt relief. That includes the new Saving on A Valuable Education (SAVE<\/u>) income-driven repayment (IDR) plan. So far, more than 44 million borrowers have enrolled in this program which could lower monthly payments to zero.\u00a0<\/p>\n

Under its rules, single borrowers enrolled in SAVE who earn $32,800 or less or a family of four earning $67,500 or less (amounts are higher in Alaska and Hawaii) won\u2019t owe loan payments, StudentAid.Gov<\/u> said. Borrowers with incomes above these limits could save at least $1,000 a year compared to other IDR plans.<\/p>\n

“The Department of Education finalized our new income-driven repayment (IDR) plan, which would be the most affordable repayment plan in our country’s history,” Secretary of Education Miguel Cardona said in a live press webinar.<\/p>\n

If high-interest debt is preventing you from meeting your obligations, you could consider paying it off with a personal loan at a lower rate which could reduce your monthly payments. Visit Credible to compare options from different lenders without affecting your credit score.\u00a0\u00a0<\/p>\n

MANY STUDENT LOAN BORROWERS STILL CLUELESS ABOUT REPAYMENT OPTIONS: SURVEY<\/u><\/strong><\/p>\n

Congress revisit bill to protect Social Security benefits from student loan defaul<\/strong>t<\/h2>\n

U.S. Representatives Ra\u00fal M. Grijalva (D-Ariz.) and John B. Larson (D-Conn.) has reintroduced the Protection of Social Security Benefits Restoration Act. This piece of legislation aims to restore federal protections that could prevent Social Security benefits from being garnished to repay federal student loans and other types of non-tax debt.\u00a0<\/p>\n

“Seniors paid their entire lives into Social Security and are being punished largely due to the skyrocketing cost of higher education,” Grijalva said. “For many, Social Security benefits are the only source of income they can depend on and it\u2019s time we restore that certainty for seniors. With student loan debt payments resuming in October, it\u2019s critical that we act now to protect the benefits seniors need to retire and live their lives with dignity.”<\/p>\n

At least 114,000 Americans have had their Social Security benefits garnished due to student loan default, according to a 2016 report from the Government Accountability Office.\u00a0<\/p>\n

“It\u2019s past time Congress protects seniors and the Social Security benefits they have earned with every paycheck,” Senator Ron Wyden (D-Oreg.) said in a statement. “That\u2019s why I\u2019m proud to reintroduce legislation that shores up protections for Social Security benefits and allows seniors to retire with the dignity they deserve.”<\/p>\n

This announcement follows the Supreme Court decision to strike down Biden\u2019s widespread student loan forgiveness plan<\/u> that would have wiped out up to $20,000 in student loan debt for borrowers who meet certain income parameters.\u00a0<\/p>\n

But SCOTUS ultimately ruled the president would have been overstepping his powers. The court also ruled that Biden would have unjustly used the text of the Higher Education Relief Opportunities for Students (HEROES) Act of 2003 \u2013 a law that allows the Education Department to waive certain barriers to student loan forgiveness in times of national emergencies such as the COVID-19 pandemic.\u00a0<\/p>\n

Nonetheless, the president announced his administration’s plans to continue pursuing widespread student loan relief through the Higher Education Act of 1965, which permits the Education Department to “compromise, waive or release loans.”<\/p>\n

If you\u2019re having trouble saving for retirement, you could consider taking out a personal loan to pay down high-interest debt which could help you reduce your monthly payments. Visit Credible to speak to a loan expert and get your questions answered.\u00a0<\/p>\n

SOCIAL SECURITY PAYMENTS COULD RISE 3.2% IN 2024<\/u><\/strong><\/p>\n

Have a finance-related question, but don’t know who to ask?<\/strong>\u00a0Email The Credible Money Expert at\u00a0<\/i>moneyexpert@credible.com<\/u><\/i>\u00a0and your question might be answered\u00a0by Credible\u00a0in our Money Expert column.<\/i><\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

As millions of student borrowers prepare to make their first student loan payments in three years, some of those who\u2019ve been making payments for decades may take a hit to their retirement benefits.\u00a0 Under current law, seniors can have their Social Security benefits garnished to repay student loans in default. Social Security beneficiaries could lose<\/p>\n","protected":false},"author":1,"featured_media":30710,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[32],"class_list":{"0":"post-30709","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-featured"},"yoast_head":"\nSocial Security payments could be cut over student loan default | Micro Loan Nexus<\/title>\n<meta name=\"description\" content=\"As millions of student borrowers prepare to make their first student loan payments in three years, some of those who\u2019ve been making payments for decades\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/microloannexus.com\/?p=30709\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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