Supreme Court Says Feds Can Grab the Social Security of the elderly to Pay Old Student Loans!

Supreme Court Says Feds Can Grab Social Security to Pay Old Student Loans

Unanimous decision concerned only debts that are over ten years old

Dec. 8, 2005 – The Supreme Court yesterday said the Social Security payments to senior citizens are up for grabs by the government to collect on old student loans.

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The case addressed specifically loans that are over 10 years old. The government argued they needed this tool to collect on the $5.7 billion they are owed on student loan debt that is more than 10 years passed due. The total outstanding student loan amount is $33 billion.

The government, which began collecting these debts through Social Security in 2001, is limited to taking only 15 percent of the Social Security payment.

The Education Department also has the authority to forgive debts in some hardship cases.

The case was brought by James Lockhart, a 67-year-old disabled man from Seattle, Washington. The public housing resident said he needed all of $874 Social Security check to buy food and medicine, despite his $77,000 student loan debt that he had incurred between 1984 and 1989 under the Guaranteed Student Loan Program.

These loans were eventually reassigned to the Department of Education, which certified the debt to the Department of the Treasury through the Treasury Offset Program.

In 2002, the Government began withholding a portion of Lockhart's Social Security payments to offset his debt.

Lockhart sued in Federal District Court, alleging that under the Debt Collection Act there is 10-year statute of limitations.

The court's unanimous decision applies to loans that date back more than 10 years, and covers both disability and retirement benefits under the Social Security program.

"It means that you can take the Social Security benefits of someone who is 90 years old and living on a small amount of money," said Brian Wolfman, director of the Public Citizen Litigation Group and the lawyer for Lockhart. "The losers are clearly older Social Security beneficiaries."

Other groups siding with the senior included the National Consumer Law Center and AARP.

The ruling was written by Justice Sandra Day O'Connor.



http://www.seniorjournal.com/NEWS/SocialSecurity/5-12-08-SS-StudentLoans.htm