Skip to content

McCaskill Seeks Answers on Garnishment of Social Security for Student Loan Debt

Senator asks for study looking at effects of student loan debt on senior households

WASHINGTON – U.S. Senator Claire McCaskill (D-Mo.) today asked the government for answers about the controversial policy of garnishing Social Security benefits in order to recoup federal student loan debt.

In a letter to the U.S. Comptroller General, McCaskill along with Massachusetts Senator Elizabeth Warren, asked the Government Accountability Office to conduct a study of the effects of Social Security benefit garnishment for senior households, including how such garnishment affects retirement, and how much of each senior’s benefits are subject to garnishment.

“Garnishing Social Security benefits defeats the entire point of the program—that’s why we don’t allow banks or credit card companies to do it,” said McCaskill, the top-ranking Democrat on the Senate Special Committee on Aging. “Social Security is the sole means of retirement income for tens of millions of Americans, and allowing those benefits to be garnished to collect student loan debt cuts a dangerous hole in our safety net.”

Just last year, the federal government garnished $161 million from Americans’ Social Security benefits for student loan debt that was in default—despite the fact that Social Security benefits are widely protected from debt collectors

Americans borrow more than $115 billion per year in federal student loans, and hold $1.2 trillion in student loan debt backed by the federal government.  The percentage of households headed by those aged 65 to 74 having student loan debt quadrupled between 2004 and 2010, as many Americans have recently returned to school in order to make career changes later in life. Current data indicates that the rate of default for elderly borrowers is higher than for younger Americans.

“Your recent report on student loan debt of older Americans raises new concerns about the student loan debt of older Americans and its impact on their retirement security. These concerns are exacerbated by policies that allow the Department of the Treasury to garnish older Americans’ Social Security payments to pay back student loans in default. And with student loan debts increasing for younger Americans, the potential exists for this to be a much bigger problem in the future,” the Senators wrote to Comptroller General Gene Dodaro.

McCaskill is the lead Democrat on the Senate Special Committee on Aging, which held a hearing last year examining the increase in student loan debt in older households.

A copy of the Senator’s letter is available online HERE

###