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