Authorized by a 1996 law, the withholding is an attempt by the Federal Authorities to deduct portions of Social Security payments to cover any defaulted Federal Debt- including student loans.
According to the study:
According to government data, compiled by the Treasury Department at the request of SmartMoney.com, the federal government is withholding money from a rapidly growing number of Social Security recipients who have fallen behind on federal student loans. From January through August 6, the government reduced the size of roughly 115,000 retirees' Social Security checks on those grounds. That's nearly double the pace of the department's enforcement in 2011; it's up from around 60,000 cases in all of 2007 and just 6 cases in 2000.
“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.
And the screwing doesn’t stop there…
The vast majority of these deductions have nothing to do with their own education.
While there are a certain percentage of the deductions coming from elderly who defaulted on their own undergraduate and graduate loans, the majority of the cases are the borrowers going into debt later in life to help defray education costs for their children or other dependents (paying for the college of grandchildren is becoming more and more common). Others signed up for the federal PLUS loan -- a loan for parents of undergraduates -- to cover tuition costs. While other retirees took out federal loans when they returned to college in midlife, in an effort to retool and re-enter the workforce.
This makes sense I guess…
Make sure the Government gets their nut… after all, these folks did make a commitment to repay these loans and whatnot.
And it does seem to work out that whole “How are we going to pay out all of these Social Security checks once everyone starts retiring while the workforce doesn’t grow in kind”..
Hear me out.
According to all reports you see floating around out there a trillion dollar “Student Loan Bubble” which, presumably, is going to have over a fifty percent default rate is looming over this nation.
Now, most of these folks are going to make it to a retirement age (which is going to skyrocket into the late seventies by the time any of us get to be able to contemplate retiring), and these jerks are going to get their checks deducted, both reducing the out payment that the Federal Government has to dole out to the plebs and manages to make good on some the debts that are hurting our nation’s bottom line.
Seems like a win/win, don’t it???