Social Security and Student Loan Debt

A situation regarding student loan debt has come to our attention again, and thought we would share some insight to this problem. Students, at an alarming rate, are borrowing the maximum amount from the government to pay for their higher education. They are allowed to pay very low monthly fees for these loans over a long extended period of time. In their minds, this means I will just paying for this the rest of my life. Well, guess what?
“Unpaid, federally guaranteed student loans are one of the reasons you can have your disability checks, both Veterans Affairs and Social Security, garnished by the federal government. There are limitations on how much the government can take each month, but they can take the money.” Garnish Disability to Pay Student Loan? Dr. Don Taylor, PhD, CFA, CFP, CASL – Bankrate – Jun 7, 2013.

So, if this debt extends past retirement age, the Federal government is going to garnish a portion of the Social Security you earned for retirement.

In 2008, when so many older adults lost their jobs, many went back to school to get their degrees in an effort to make themselves more marketable. Now some of these folks, that are wanting to retire, are faced with the option of dipping into other assets to get these loans paid off, or having a chunk of their retirement garnished. Not a good situation.


1. Have a heart to heart with your students about how this debt could harm them when they are approaching retirement.
2. Limit the amount they borrow if possible.
3. Pay off this debt as soon as possible. It may hurt for a while, but they will be glad it is off their back.
4. Have them work during college to limit the amount of money needed to borrow.

Can you imagine the amount of money the Federal government will save when all these Millennials are of retirement age, and their benefits are partially garnished?

This benefit is too important not to have it professionally reviewed. We talk to people everyday that wish they could take back the decision they made – simply because of lack of education on the subject. You can email us at or for more information. Our website is

Posted on by Pillars LLC

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