Social Security Benefits Offset Temporarily Paused
Due to the COVID-19 payment pause, most collections on federal student loan debt, including collections of Social Security benefits. The payment pause is ending at the end of August 2023, but the Department of Education has stated that collections on loans that are eligible for the new Fresh Start program will continue to be paused during the Fresh Start period. The Fresh Start period will run until one year after the payment pause ends. See our page on Fresh Start for more information about signing up for this time-limited program.
If you have defaulted on your federal student loans and you receive Social Security Disability or retirement benefits, the federal government may withhold up to 15% of your benefits each month to pay back your student loan debt. This is called an offset. The offset continues until your defaulted loan is paid in full, you are removed from default, or you are able to get the Department of Education to stop the offset.
The government cannot take Supplemental Security Income (SSI) or Veterans benefits to collect your defaulted student loan debt. You will get a letter before your benefits are taken giving you information about requesting a review to try to stop the offset.
Make sure your contact information is updated with the Department of Education and your loan servicer. Many people who don’t get notice that their tax refunds have been taken have moved and failed to let the government know their new address. Don’t miss out on important updates. Call your loan servicer or log in to your studentaid.gov account to update your contact information.
Can I stop the government from taking my Social Security?
If you get a letter from the federal government letting you know that your benefits will be taken to pay back your student loan debt, don’t ignore it. You can take steps to try to stop the offset by requesting a review.
To request a review, contact your loan servicer. If you do not know who your loan servicer is, you can also contact the Department of Education Default Resolution Group. You can call the Default Resolution Group at 1-800-621-3115. You can find more information and set up an account with the Default Resolution Group to manage your requests online at myeddebt.ed.gov.
Are you not able to work due to a disability?
If you are not able to work due to a disability, you may be able to have your federal student loan debt canceled or forgiven through the Total and Permanent Disability (TPD) program. You do not have to be receiving Social Security Disability benefits in order to qualify for loan forgiveness.
There are a few ways you can qualify for TPD, but the easiest way is to have a medical professional fill out the TPD form confirming your disability. Medical professionals that can fill out the TPD form include physicians, nurse practitioners, physician assistants, and licensed psychologists. The TPD application is very easy to fill out and submit. If you apply for TPD, you may be able to stop any collections while you wait for the Department of Education to review your application. For more information, see our page on applying for TPD loan forgiveness.
What will the government consider when reviewing my request to stop the offset?
The government will usually consider whether or not you have any defenses to paying back your student loan debt.
Some of the main defenses include:
- you are totally and permanently disabled,
- you already repaid the loan,
- it is not your loan or there is some other reason why you do not owe the money,
- you have already entered into a repayment agreement with the loan holder and are making payments as required,
- you have filed for bankruptcy and the case is still open or the loan was discharged in bankruptcy,
- your school lied to you about the program or the loans you were taking out,
- the school failed to pay you a refund after you withdrew from classes,
- the loan is not enforceable, for example because of forgery or other reason, or
- you are eligible for a closed school discharge.
Will the government stop the offset because of my financial hardship?
In some cases, the government will stop a Social Security benefits offset due to your financial hardship. If you are facing a significant and urgent hardship, such as an eviction, foreclosure, or utility shut off, make sure you send proof of this to your loan servicer to try to stop the offset.
For more information on collection of federal student loan debt, visit the Federal Student Aid website page on collections.