Disability payments garnished for student loans?

What is the name of your state? Oklahoma

I am recieving Social Security Disability and I am default on my student loans. In September 2002 I had a collection agency call I made arrangements to pay a small amount in order to get out of default. Before I made the arrangements I called the US Department of Education and got a list of the loans, the amounts and the dates issued. The USDE told me I had 9 and only 9. (I made them confirm this fact several times) So, I continued with the arrangements, got out of default and got a forbearance because I do receive disability.

Today I received a letter from ANOTHER collection agency stating my loans have been turned over to them and that I am in default on 7 loans. They gave me two options 1. Pay the loan in full by 3/18 and 2. ignore the debt and they will garnish my disability for up to 25%. ( I only get $588 monthly)

So,
1. Can they garnish Social Security Disability payments for student loans?
2. Doesn't the USDE keep accurate records?
3. Should I get an attorney or an expert of some kind to investigate...someone more knowledgable than me and knows where to go?

TIA
Raeanne

Raeanne, I do not have answers to your three questions but I do have a suggestion that may make your questions irrelevant. I am not a legal or financial professional but I beleive it may be possible for you to get more than just a forebearance. You should try to get a "Loan Discharge Due to Total and Permanent Disability" from the US Deptartment of Education. My understading is if they approve this, you are not responsible for you student loan debt any longer and it is cancelled. I would beleive it should be possible for you to qualify since you are considered disabled as defined by the SSA.

I don't know if the small payments you have been making to this collection agency, or the fact that it has been turned over to them will affect your ability to qualify with the US Dept of Ed, but it couldn't hurt to look into it. Try going to their web-site at [url]www.ed.gov[/url] and do a seach under "disability discharge."

Maybe someone else in the forum can offer more assistance or information for you about this too....?

The following was taken from Social Security's website: [url]www.ssa.gov...Hope[/url] this answers your question about your student loans. Krelza



Can Social Security benefits be garnished to pay a debt?

Question
Can Social Security benefits be garnished to pay a debt?

Answer
Section 207 of the Social Security Act (42 U.S.C. 407) protects Social Security benefits from assignment, levy, or garnishment. However, the law provides five exceptions:

- Section 459 of the Act (45 U.S.C. 659) allows Social Security benefits to be garnished to enforce child support and/or alimony obligations;

- Section 6334 (c) of the Internal Revenue Code (26 U.S.C. 6334 (c)) allows benefits to be garnished to collect unpaid Federal taxes;

- Section 3402 (P) of the Internal Revenue Code allows beneficiaries to elect to have a percentage of their benefits withheld and paid to the Internal Revenue Service to satisfy their Federal income tax liability for the current year;

- The Debt Collection Act of 1996 (Public Law 104-134) allows benefits to be withheld and paid to another Federal agency to pay a non-tax debt the beneficiary owes to that agency: and

- The Tax Payer Relief Act of 1997 (Public Law 105-34) authorizes the Internal Revenue Service to collect overdue federal tax debts of beneficiaries by levying up to 15 percent of each monthly payment until the debt is paid.


The Social Security Administration's responsibility for protecting benefits against legal process and assignment usually ends when the beneficiary is paid. However, once paid, benefits continue to be protected under section 207 of the Act only as long as they are identifiable as Social Security benefits. This applies to money in a bank account where the only payments into the account are from direct deposit of Social Security benefits.

NOTE: Supplemental Security Income payments cannot be levied or garnished.