Hey guys! I wanted to post this article because even though you might not have any more student debt yourselves, it is something that’s a huge issue in the U.S. right now. American Student Assistance stated that in the 2007-2008 academic year, $17 billion was handed out in private loans (a jump of 592% increase from ten years prior) and it’s only gone up since then. And now, the latest report is that the federal government has started withholding Social Security from people who have gotten behind on their loans. Anna Andriotis of MarketWatch.com reports,
“It’s no secret that falling behind on student loan payments can squash a borrower’s hopes of building savings, buying a home or even finding work. Now, thousands of retirees are learning that defaulting on student-debt can threaten something that used to be untouchable: their Social Security benefits.
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.
The amount that the government withholds varies widely, though it runs up to 15%.”
Click here to read how, why, what and when the feds could start withholding your Social Security due to unpaid student debt.
Worth a read, friends. Kind of unbelievable that this could happen (didn’t Social Security used to be like the one thing the government couldn’t touch?) And 15% is a lot of dough. Check out some of my other posts if you’re looking for tips on managing personal finance and chipping away at debt.