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(USGovernment-News.Com, August 22, 2012 ) San Francisco, CA -- SmartMoney.com has reported that around twice as many social security recipients are not receiving their full quota due to their unpaid federal student loans this year as compared to the previous few.
This can be checked back to the 1996 law which states and allows the government to withhold some part of social security payments if the principal debt is still owed to the federal government, which includes unpaid student loans.
According to an attorney with the National Consumer Law Center, Deanne Loonin, this whole scenario is very unique because usually creditors are not allowed to touch social security benefits.
Over the past few years, these cases have increased dramatically and the department’s enforcement department had to be doubled in 2011 to cope with them.
As of August 6th, the government decreased about 115,000 retirees’ social security benefits. In contrast, there were only 60,000 similar cases in 2007, whereas there were only six in 2000.
Although the government has its own policies regarding the amount to keep withheld, at least $750 has to be left untouched.
According to Loonin, the $750 amount cited by the officials is not much if you think about it. It’s below the poverty line and it’s not of much use to the general public.
She says that she has worked with many people who are facing these cases and have had their benefits reduced because they have various overdue loans, which sometimes include federal loans taken out to pay for their children’s education. Still many federal loans will consider requests for a reduction in loan payments and sometimes will terminate the loan altogether mainly due to misfortunes, permanent disability, or some other catastrophic uncontrollable reasons.
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