Senate Finance Committee lawmakers introduced a bill Thursday to stop the federal government from garnishing Social Security benefits to pay for federal debts, like student loans.
Ranking Member Ron Wyden, D-Ore., and Sen. Sherrod Brown, D-Ohio, along with five Senate Democrats introduced the legislation, the Protection of Social Security Benefits Restoration Act.
The bill would repeal a 1996 change in law that allowed earned benefits to be garnished to collect federal debts like student loans.
“Americans are getting hit by a wrecking ball of increasing college costs, and the last thing they can afford is to have their Social Security benefits reduced to pay off student loans,” said Wyden in a statement. “Students and their families in Oregon and across the country who have worked to earn their benefits should not be penalized for trying to improve their lives and keep up with the climbing price of higher education.”
The lawmakers note that in fiscal 2015, 860,000 individuals had their Social Security benefits reduced to pay for federal debts and the federal government collected a total of $382 million. In Oregon, 11,800 individuals had their Social Security benefits reduced to collect federal debt.
According to a September 2014 Government Accountability Office report, the number of individuals whose Social Security benefits were offset to pay student loan debt increased significantly between 2002 and 2013, from about 31,000 to 155,000.
For individuals 65 and older with student loan-related Social Security garnishments, the number grew from about 6,000 to about 36,000 over the same period.
— Check out How Lump Sums Could Help Fix Social Security on ThinkAdvisor.