By: Gaurav Bhola, MSM, Managing EditorNo one can escape their old student loan debt, not even the country’s seniors and the disabled. The nation’s highest court ruled in December 2007 that the federal government can seek payment from Social Security benefits of delinquent borrowers.
In an effort to collect billions in unpaid financial aid student loans, the Bush administration has argued that withholding Social Security benefits is an important way to acquire over $5.7 billion in student loan debt that is over ten years old.
Currently, all outstanding student debt stands out at more than $33 billion. James Lockhart, a Seattle 67 year old disabled senior citizen who is domiciled in public housing, collecting $874 in government benefits challenged the withholding of his benefits. He claimed that his monthly benefit merely covered his food and medicine. Lockhart’s benefits had been slashed by 15 percent to pay for his outstanding student loan debts of $77,000 that he incurred in the 1980s.
The case made its way on appeals all the way to the Supreme Court, the country’s highest court. The unanimous decision went in favor of the federal government. The government started taking money away from seniors and the disabled in 2001, under the first term of President Bush. The withholding limit amounted to 15 percent of the monthly check.
However, in some hardship cases, the Education Department can forgive the college loan debt. But school loans forgiveness are far and few in between. The court decision empowers the government to seek repayment for school loan debt over ten years old, and encompasses retirement and disability social security income.
Many public interest groups were unaware of this government activity. The public interest groups are crying foul in that the government is taking money away from citizens that in most circumstance do not have other outlets for survival other than their monthly Social Security checks.
Many Senior citizens groups are not even aware of how many seniors the law ensnares and how many will be further placed in poverty status.
The Supreme Court was called into clarify the federal laws with conflicting collection methods. Congress had passed laws in 1991 and 1996 eliminating a 10-year limit on the government’s right to address recourse on defaulted university and college loans by withholding partial Social Security payments.
But earlier lower courts had favored Social Security recipients. Congress may revisit the issue in the coming years, specifically if there are considerable pressures from public interest and senior groups.
These groups have been vociferous in preserving the importance of financial independence of seniors and the disabled. Undoubtedly, the Supreme Court has had the last word in siding with the government in this case. But one mustn’t rule out the strength of citizen action groups in convincing members of Congress on passing new legislation to protect the seniors’ and the disabled citizens’ Social Security incomes.
