Social Security is being withheld for people with unpaid federal student loans, the result of a 1996 law that gives the government the power to hold back payments if any type of defaulted debt is owed to the government.
The growing number of people having Social Security withheld for student loans was highlighted in a report from SmartMoney.com, which found that thousands of retirees are being threatened to lose the Social Security benefits many thought were untouchable.
The report, which looked at data from the Treasury Department, found Social Security withheld for a growing number of Americans. Between January and August 6, the federal government withheld Social Security for close to 115,000 retirees on the grounds of unpaid student loan debt.
The number of people with Social Security withheld for student loan debt is almost doubled from 2011, and stretching back further the numbers have increased even more. In 2007 there were 60,000 cases of people who had Social Security withheld for student loan debt. In 2000 there were just six cases.
For many people, the fact that Social Security is being withheld at all is a shock, ABC News reported.
“It’s quite extraordinary because normally Social Security benefits can’t be touched by creditors,” said Deanne Loonin, a staff attorney with the National Consumer Law Center.
While the amount that the government can withhold from Social Security vary, there must be at least $750 remaining in each check, ABC News reported.
“When you think about it, $750 a month is less than the poverty line. It’s not a lot of money for people to have,” Loonin said.
Loonin said the people having Social Security withheld fit a broad range, not just those who recently left college. Many of the people she works with are older and delinquent on a range of loans, including federal student loans parents took out for their children.