How Student Loans Affect Social Security

Student loan standing plays a critical role in getting access to the full amount of Social Security benefits you’re entitled to. It’s important to understand how making current and timely payments can make all the difference as you approach retirement.

The incredible amount of student loan debt saddled on the shoulders of Americans represents a wide swath of the population and the amount is well over $1 billion. 

What many don’t know is the far-reaching ways in which the government will work to collect on federally-managed loans. According to the Consumer Financial Protection Bureau (CFPB), borrowers aged 60 and older climbed at least 20% between 2012 and 2017 and you can bet that it directly affects what these borrowers receive as they work towards those hard-earned Social Security benefits.

Can Social Security Benefits Be Garnished for Student Loan Payments?

The short answer is yes. 

Since student loans cannot generally be discharged through bankruptcy, the Treasury Offset Program (TOP) will garnish a certain amount of Social Security benefits to put towards outstanding student loan payments, but benefits paid out can never be lower than $750 for an individual.

As the only source of income for 69% of beneficiaries 65 and older, this presents a serious problem. 

As an additional note, private loan creditors cannot go after Social Security benefits as a method towards repayment. 

How Does Social Security Work Within a Student Loan Default?

When a borrower enters default, they eventually have to make a nine-payment plan to make that series of payments on time to get out of default and back into an income-driven repayment (IDR) plan. Oftentimes, this affects borrowers whose sole source of income after retirement is Social Security or other related benefits. 

The CFPB reports that this process is often not straightforward as the communication between borrowers and the various loan holders often lags and can put Social Security benefits into offset, requiring more paperwork to cover lost benefits. 

In any case, a garnishment cannot occur for at least two years following default.


At first glance, student loans may not seem to play a role in Social Security benefits, but getting full access to your benefits requires having student loans in good standing. Working through denial or a stalled claim doesn’t make this any easier. Call the team at Schott Law today at (509) 328-5789 to learn about how we’ve counseled Eastern Washington and Idaho residents through this process.