The trend of garnishing social security benefits for student loans exists because of outdated measures of what constitutes poverty. In 1998, Congress decided that the Treasury could not collect payments from those who would see their benefits reduced below $750. The calculation was based on what the poverty line was at the time, the GAO report noted. If the limit for garnishing wages were adjusted, in 2013 it would have increased to about $1,073 a month. If those limits were updated to today’s levels, 68% of all the retirees whose social security benefits were reduced to pay back student loans “would have kept their entire benefit”.
Posted on: Sun, 14 Sep 2014 00:42:22 +0000