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Student Loans - Lose Social Security Benefits If You Don't Pay
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.
About the author:
Richard A. Chapo is a San Diego business lawyer with
http://www.sandiegobusinesslawfirm.com - a San Diego business
law firm in San Diego, California.
Written By: Richard A. Chapo