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Student Loans - Lose Social Security Benefits If You Don't Pay
By Richard A. Chapo, Fri Dec 9th
A vast majority of people take out student loans to pay forhigher education. The Supreme Court has decided to make socialsecurity benefits a means of repaying them. No Benefits For You! While millions borrow money to attend college and graduateschool, not everyone pays this money back. The failure to paycan result from circumstances such as a slow job market, failureto finish school and health problems. Of course, there are theselect few who simply welch on the repayments. The U.S. SupremeCourt rendered a decision on December 7, 2005, impacting peoplewho are behind in paying their loans.
In Lockhart v. United States, the Supreme Court was asked torule on whether the federal government could seize socialsecurity benefits to cover outstanding student loans. The caseinvolved James Lockhart, a disable man, who sued to stop thegovernment from cutting his monthly $874 check. Lockhart suffersfrom heart disease, diabetes and other health problems and livesin public housing in Seattle. He argued the forfeiture of partof his check made it impossible for him to continue to buy hismedication and
food. The Justices disagreed with Lockhart. Under federal law, efforts to collect defaulted student loanshad a 10 year limit. Put another way, the federal government wasbarred from hunting down delinquent payers after ten years. Inthe past few years, however, Congress did away with thislimitation, which brought forth a conflict of law. The SocialSecurity Act contains language protecting benefits from beingseized as part of debt actions. In this case, the Supreme Courtruled that such protections only apply to private individuals,not the federal government. In short, social security benefitsare no longer safe. Currently, the total balance on outstanding student loans isroughly $30 billion. Of this amount, roughly seven billion aredelinquent or defaulted loans. With 25 percent of loans in thered, one can see why the government has an interest incollecting the debt. Personally, I don't have any problem with this ruling. If youborrow money to go to school, you should pay it back. Failing todo so could deprive others of the same opportunity. About the author:Richard A. Chapo is a San Diego business lawyer withhttp://www.sandiegobusinesslawfirm.com - a San Diego businesslaw firm in San Diego, California.
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