Student Loans - Lose Social Security Benefits If You Dont Pay
by: Richard Chapo
A vast majority of people take out student loans to pay for higher
education. The Supreme Court has decided to make social security
benefits a means of repaying them.
No Benefits For You!
While millions borrow money to attend college and graduate school,
not everyone pays this money back. The failure to pay can result
from circumstances such as a slow job market, failure to finish
school and health problems. Of course, there are the select few
who simply welch on the repayments. The U.S. Supreme Court rendered
a decision on December 7, 2005, impacting people who are behind
in paying their loans.
In Lockhart v. United States, the Supreme Court was asked to rule
on whether the federal government could seize social security benefits
to cover outstanding student loans. The case involved James Lockhart,
a disable man, who sued to stop the government from cutting his
monthly $874 check. Lockhart suffers from heart disease, diabetes
and other health problems and lives in public housing in Seattle.
He argued the forfeiture of part of his check made it impossible
for him to continue to buy his medication and food. The Justices
disagreed with Lockhart.
Under federal law, efforts to collect defaulted student loans
had a 10 year limit. Put another way, the federal government was
barred from hunting down delinquent payers after ten years. In
the past few years, however, Congress did away with this limitation,
which brought forth a conflict of law. The Social Security Act
contains language protecting benefits from being seized as part
of debt actions. In this case, the Supreme Court ruled that such
protections only apply to private individuals, not the federal
government. In short, social security benefits are no longer safe.
Currently, the total balance on outstanding student loans is roughly
$30 billion. Of this amount, roughly seven billion are delinquent
or defaulted loans. With 25 percent of loans in the red, one can
see why the government has an interest in collecting the debt.
Personally, I don’t have any problem with this ruling. If
you borrow money to go to school, you should pay it back. Failing
to do so could deprive others of the same opportunity. |
