9 ms·

Social Security Garnished for Unpaid Student Debt

23 points by esturk 10y ago

kafkaesq 10y ago
WASHINGTON—The federal government is increasingly taking money out of recipients’ Social Security checks to recover millions in unpaid student debt, leaving thousands of retired and disabled Americans with below-poverty incomes, according to a report set to be released Tuesday. This is just pure, unadulterated evil.
- new_hackers 10y ago
  Maybe? If it was money owed by the individual, then maybe not? The question is, when do we absolve people of debit while still giving entitlements? If the some of the money from the entitlement should be used to pay down the debt, perhaps the government is just cutting out the middle man?
  - kafkaesq 10y ago
    The question is, when do we absolve people of debit while still giving entitlements? It's a thorny question, in the general case. But fortunately we can rely on the time-honored constraints of common sense and general decency, in cases like these. For which the factors "Would this force the individual below sustenance level? Are they disabled, or do they have disabled dependents?" are actually pretty easy to assess, and verify.
    - civilian 10y ago
      "Common sense and general decency" my common sense and decency is pretty much at odds with yours. You took a loan? Good, repay it. You're an adult, you made a decision. Don't expect any help from others. My sense of decency says that we should probably not allow student loans, since so many people aren't mature enough to understand their impact and calculate the trade-off of taking one. //EDIT: So, my main argument is against the idea that we should use "common sense and decency" to make these decisions. That's stupid, because the majority of people don't understand economics and have a hard time guessing what the second and third order effects of a "nice" action would be. My arguments are a red herring. We should throw out the "common sense" of kafkaesq and I. We're both being stupid when we just poll our values to see what our knee-jerk reaction is. Let's just use a system that has the best outcomes. I'd like the policy that provides the highest outcome of: ("Grows GDP" x "Does not fail it's participants")
      - new_hackers 10y ago
        I would have not been able to attend college without Federal assistance in the form of student loans. I'm a twice degree'd engineer in the workforce for 15 years, and an expectancy to work at least 25 more years. All loans were paid back with interest. My earnings are generally far higher than those in my region that do not have a degree, and I pay higher income taxes accordingly. Do you feel that the reward was worth the risk for the Federal government?
        justavoice 10y ago
        In your case, yes. But what he's saying is that with the opportunity came the responsibility to pay the debt back, which you did, which some are not doing. With no consequence for bad behaviour, why stop?
        jessaustin 10y ago
        You were a good risk, and probably could have obtained loans privately without any governmental market meddling. That makes you quite different from the debtors under discussion. Bankruptcy exists for a reason. It was unwise to do away with it for education loans, even though doing so temporarily increased the volume of available education loans.
        generj 10y ago
        I feel there is a massive difference in funding an engineering student's debts versus an art history major's debt. Every engineering degree typically results in 60K plus jobs straight out of school. I doubt a single engineering student has had their Social Security garnished, and if they did they almost assuredly made enough poor financial decisions I have a hard time feeling sympathy. We need to decide as a society what the point of university is. If our aim is to increase human capital, degrees should be invested in by the government in a way which maximizes that human capital increase. If we argue that university is essential for almost everyone for a republican democracy to work, we should provide or heavily subsidize it rather than using debts. Right now we allow people to take out massive debts which never disappear only to learn things which the market judges as not increasing their human capital whatsoever. I don't have anything against degrees which don't increase human capital, but they are basically luxuries which the government shouldn't intervene to fund. In the mean time the massive rise in student debt has allowed for a huge inflation in spending by university administrations and massive swelling in tuition.
    - new_hackers 10y ago
      I think you are trending toward "too-old-to-fail", and perhaps that is the answer?
      - justavoice 10y ago
        That's a good analogy for it - and, like the banks, these people should have to pay the costs of their bad behaviour. But it seems our society is trending more towards rights and less towards responsibility. Big business gets away with it, now individual feel they should be absolved of responsibility too.
    - deleted 10y ago
      [deleted]
  - freehunter 10y ago
    Well the problem with social security is it's not really income that can be garnished. It's money that was paid into social security with the explicit promise that you'd get it all back upon retirement. This is garnishing wages in the past. It's kind of like repossessing someone's fully paid-for car and house to pay an unrelated debt. It's something you already owned and was not collateral for your debt, but they're taking it away from you anyway. If you're an American, check your pay stubs. You're paying for social security every pay period. It's not welfare, it's a refund of money the government forced you to pay when you were younger. If they're now taking it away from you, taking away a refund of money they already forced you to pay them years ago, that seems to me like a massive misuse of the social security system. People rely on that for their sole income, secure in the knowledge that they spent their entire lives paying into it.
    - h4nkoslo 10y ago
      "It's money that was paid into social security with the explicit promise that you'd get it all back upon retirement" That's not even close to true; there is no legal connection that requires you "get it all back" or that the government can't arbitrarily adjust benefits up and down. In practical terms the program is a transfer from present workers to past workers, it doesn't fundamentally operate as a savings account.
      - freehunter 10y ago
        Practical terms or not, that's the founding principle of the social security program. People can't/won't save for retirements, so we (the government) will take money from them now and pay it back later when they retire. If the government can say "we took all this money from you in the past but won't give it back now", there was literally no point in paying social security taxes.
        deleted 10y ago
        [deleted]
        pilom 10y ago
        It makes much more sense if you don't think about SS as a pension. It is a tax you pay to not have old people destitute on the streets. That's all. It isn't a savings account or an annuity. It's a tax to take care of old people today. When you get old, you may be eligible for funding to keep you off the streets. You might not. That is what SS is and should be marketed as.
- weberc2 10y ago
  I can't help but feel this situation would be different if we did more to steer students away from low-demand degrees, or if employability factored more into the funding process.
  - LesZedCB 10y ago
    society needs liberal arts just as much as workers which are useful to capitalists.
    - nickff 10y ago
      Does society really need a large portion of its population to be subsidized in binge drinking and partying for 4 years, as much as it needs people trained in technical skills? If you look at the study data on retained knowledge and hours studied in the liberal arts, they paint an unflattering view of what a 'liberal arts education' really is today. I am all in favor of people studying philosophy, history, and language, but I'm not sure how much it helps society, and students aren't learning anything anyway.
      - metaphorm 10y ago
        this is a non-argument and doesn't address the point made by the post you're responding to. certainly engineering students are just as free to binge drink and party for 4 years and not learn anything. a fuck up who drops out of their engineering degree program and defaults on their student loans is just as much of a fuck up as someone who did the same while studying literary criticism.
        nickff 10y ago
        I'm saying that the liberal arts majors who graduate are spending far more time drinking and partying than learning or thinking. If they are spending so much time partying, and don't retain any knowledge (as there are many studies which attest to that), I don't see the value in subsidizing this behavior.
- solotronics 10y ago
  borrowing money from the public and never repaying it is theft
tn13 10y ago
Good reason why Government should stay out of both social security and student loans.
hidden_forest 10y ago
Every time I see news on the student loan crisis, I thank God I graduated college in the 90s. I left school $12k in debt, paid it off in 2 years.
- generj 10y ago
  It's not impossible to have a low debt degree today. I've worked interesting jobs part-time during the school year and full time during breaks and will graduate without a dime of debt. I've met many students with a similar financial background.
  - twoquestions 10y ago
    I'd be very interested in the details on how you were able to accomplish this. What kind of part-time job will both pay enough to fund college while being flexible enough to allow for both class time, and leave you with enough mental energy to study and do homework? I worked through my college education yet still graduated with a modest amount of debt. There were choices I could have made to improve my financial situation, but no amount of penny-pinching would have completely mitigated the debt I would have had to take on, save a rich relative bankrolling me.
    - pilom 10y ago
      I bet the big difference in experiences relates to what type of school. In state tuition at many state schools can be 1/5 of top-tier private school tuition. Using part time and summer jobs to pay for school that costs $12k/year while living at home is much easier than paying for a school that costs $50k/year plus housing.
      - generj 10y ago
        Yep. To add on to my earlier answer, if I had gone to any of my public in-state universities, the lottery would have paid for all of my tuition and even some of my books. Georgia is a great place to live if you are a graduating high school senior. Lots of my friends have kept the HOPE scholarship their entire college careers. Depending on what school you attend, it may be worth taking on lots of debt. Certainly Harvard is worth the extra money.
aphextron 10y ago
This doesn't even make financial sense for the government. If you are guaranteeing that federal student loan debts will be deducted from social security payments, why not let me make those payments pre-tax before retirement? Why would you take one third of my paycheck into social security, which may or not pay out for me in decades, rather than just sending it straight to my loan balance?
- nickff 10y ago
  The reason that the government takes your money up front instead of letting you use it against your debt is because the government has liquidity/solvency issues. Social security is a wealth transfer program, not a retirement saving program. Social Security takes money from the young, and gives it to the old; this is exacerbated by the fact the 'current old' did not 'pay-in' as much as they will be taking out, so they need your money right now.
  - rqebmm 10y ago
    The Social Security Trust Fund has no looming liquidity issues for the next 20 years or so[1]. Solvency is a different issue, and has nothing to do with student debt payments. [1]https://en.wikipedia.org/wiki/Social_Security_Trust_Fund https://en.wikipedia.org/wiki/Social_Security_Trust_Fund
    - nickff 10y ago
      I said the government has liquidity/solvency issues, and it does; the SSTF is supposed to peak in 2021, but its largest holding is US Treasury bills, so the government will either have to 'run a surplus' by then (to pay off the treasuries) or default on debt, in order to continue paying out Social Security. Do you believe that the federal budget will be running a surplus by 2021? None of this is directly due to student debt payments, I was trying to explain why the government resists deferring Social Security taxes.
mulmen 10y ago
Where I went to school my student fees went straight to the state board of education. This money was then used to pay for all schools across the state including grade schools, middle schools and high schools. The university received a portion of the fees I paid but ended up losing a few hundred dollars a year per undergrad. The difference was made up by grants, land and inventions created by the university, most of which existed only because of grad students. Effectively the people of the state were unwilling to pay for their children and the future of their state and they made the university students pick up the difference. Add to that the fact that many degrees are unemployable because the economy is/was in shambles and you end up with students paying tax multiple times on their education.
achievingApathy 10y ago
Maybe someone just needs to explain this to me like I'm 5, but no one forces someone to take out $125,000 in loans to go to a private college. I graduated from community college and then went to a state four-year for my degree, and I came out relatively debt-free. I don't want to force people into a lifetime of poverty because they made one bad financial decision at the age of 19, but I took out loans, too. I also think it's part of the college experience to eat Ramen every night for a three weeks and scrounge for beer money so I might be a bit biased. The money that I borrowed, that I paid back to my school (as promised) didn't go sit in some fat cat's bank on Wall Street. My school turned around and loaned that money back out to the next round. So it's incredibly selfish I feel for anyone to think they are free from any responsibility to pay back their loans because they were duped at the expense of someone else who now might not get the chance to go at all.

23 points by esturk 10y ago

WASHINGTON—The federal government is increasingly taking money out of recipients’ Social Security checks to recover millions in unpaid student debt, leaving thousands of retired and disabled Americans with below-poverty incomes, according to a report set to be released Tuesday. This is just pure, unadulterated evil.

new_hackers 10y ago
Maybe? If it was money owed by the individual, then maybe not? The question is, when do we absolve people of debit while still giving entitlements? If the some of the money from the entitlement should be used to pay down the debt, perhaps the government is just cutting out the middle man?
- kafkaesq 10y ago
  The question is, when do we absolve people of debit while still giving entitlements? It's a thorny question, in the general case. But fortunately we can rely on the time-honored constraints of common sense and general decency, in cases like these. For which the factors "Would this force the individual below sustenance level? Are they disabled, or do they have disabled dependents?" are actually pretty easy to assess, and verify.
  - civilian 10y ago
    "Common sense and general decency" my common sense and decency is pretty much at odds with yours. You took a loan? Good, repay it. You're an adult, you made a decision. Don't expect any help from others. My sense of decency says that we should probably not allow student loans, since so many people aren't mature enough to understand their impact and calculate the trade-off of taking one. //EDIT: So, my main argument is against the idea that we should use "common sense and decency" to make these decisions. That's stupid, because the majority of people don't understand economics and have a hard time guessing what the second and third order effects of a "nice" action would be. My arguments are a red herring. We should throw out the "common sense" of kafkaesq and I. We're both being stupid when we just poll our values to see what our knee-jerk reaction is. Let's just use a system that has the best outcomes. I'd like the policy that provides the highest outcome of: ("Grows GDP" x "Does not fail it's participants")
    - new_hackers 10y ago
      I would have not been able to attend college without Federal assistance in the form of student loans. I'm a twice degree'd engineer in the workforce for 15 years, and an expectancy to work at least 25 more years. All loans were paid back with interest. My earnings are generally far higher than those in my region that do not have a degree, and I pay higher income taxes accordingly. Do you feel that the reward was worth the risk for the Federal government?
      - justavoice 10y ago
        In your case, yes. But what he's saying is that with the opportunity came the responsibility to pay the debt back, which you did, which some are not doing. With no consequence for bad behaviour, why stop?
      - jessaustin 10y ago
        You were a good risk, and probably could have obtained loans privately without any governmental market meddling. That makes you quite different from the debtors under discussion. Bankruptcy exists for a reason. It was unwise to do away with it for education loans, even though doing so temporarily increased the volume of available education loans.
      - generj 10y ago
        I feel there is a massive difference in funding an engineering student's debts versus an art history major's debt. Every engineering degree typically results in 60K plus jobs straight out of school. I doubt a single engineering student has had their Social Security garnished, and if they did they almost assuredly made enough poor financial decisions I have a hard time feeling sympathy. We need to decide as a society what the point of university is. If our aim is to increase human capital, degrees should be invested in by the government in a way which maximizes that human capital increase. If we argue that university is essential for almost everyone for a republican democracy to work, we should provide or heavily subsidize it rather than using debts. Right now we allow people to take out massive debts which never disappear only to learn things which the market judges as not increasing their human capital whatsoever. I don't have anything against degrees which don't increase human capital, but they are basically luxuries which the government shouldn't intervene to fund. In the mean time the massive rise in student debt has allowed for a huge inflation in spending by university administrations and massive swelling in tuition.
  - new_hackers 10y ago
    I think you are trending toward "too-old-to-fail", and perhaps that is the answer?
    - justavoice 10y ago
      That's a good analogy for it - and, like the banks, these people should have to pay the costs of their bad behaviour. But it seems our society is trending more towards rights and less towards responsibility. Big business gets away with it, now individual feel they should be absolved of responsibility too.
  - deleted 10y ago
    [deleted]
- freehunter 10y ago
  Well the problem with social security is it's not really income that can be garnished. It's money that was paid into social security with the explicit promise that you'd get it all back upon retirement. This is garnishing wages in the past. It's kind of like repossessing someone's fully paid-for car and house to pay an unrelated debt. It's something you already owned and was not collateral for your debt, but they're taking it away from you anyway. If you're an American, check your pay stubs. You're paying for social security every pay period. It's not welfare, it's a refund of money the government forced you to pay when you were younger. If they're now taking it away from you, taking away a refund of money they already forced you to pay them years ago, that seems to me like a massive misuse of the social security system. People rely on that for their sole income, secure in the knowledge that they spent their entire lives paying into it.
  - h4nkoslo 10y ago
    "It's money that was paid into social security with the explicit promise that you'd get it all back upon retirement" That's not even close to true; there is no legal connection that requires you "get it all back" or that the government can't arbitrarily adjust benefits up and down. In practical terms the program is a transfer from present workers to past workers, it doesn't fundamentally operate as a savings account.
    - freehunter 10y ago
      Practical terms or not, that's the founding principle of the social security program. People can't/won't save for retirements, so we (the government) will take money from them now and pay it back later when they retire. If the government can say "we took all this money from you in the past but won't give it back now", there was literally no point in paying social security taxes.
      - deleted 10y ago
        [deleted]
      - pilom 10y ago
        It makes much more sense if you don't think about SS as a pension. It is a tax you pay to not have old people destitute on the streets. That's all. It isn't a savings account or an annuity. It's a tax to take care of old people today. When you get old, you may be eligible for funding to keep you off the streets. You might not. That is what SS is and should be marketed as.
weberc2 10y ago
I can't help but feel this situation would be different if we did more to steer students away from low-demand degrees, or if employability factored more into the funding process.
- LesZedCB 10y ago
  society needs liberal arts just as much as workers which are useful to capitalists.
  - nickff 10y ago
    Does society really need a large portion of its population to be subsidized in binge drinking and partying for 4 years, as much as it needs people trained in technical skills? If you look at the study data on retained knowledge and hours studied in the liberal arts, they paint an unflattering view of what a 'liberal arts education' really is today. I am all in favor of people studying philosophy, history, and language, but I'm not sure how much it helps society, and students aren't learning anything anyway.
    - metaphorm 10y ago
      this is a non-argument and doesn't address the point made by the post you're responding to. certainly engineering students are just as free to binge drink and party for 4 years and not learn anything. a fuck up who drops out of their engineering degree program and defaults on their student loans is just as much of a fuck up as someone who did the same while studying literary criticism.
      - nickff 10y ago
        I'm saying that the liberal arts majors who graduate are spending far more time drinking and partying than learning or thinking. If they are spending so much time partying, and don't retain any knowledge (as there are many studies which attest to that), I don't see the value in subsidizing this behavior.
solotronics 10y ago
borrowing money from the public and never repaying it is theft

tn13 10y ago

Good reason why Government should stay out of both social security and student loans.

hidden_forest 10y ago

Every time I see news on the student loan crisis, I thank God I graduated college in the 90s. I left school $12k in debt, paid it off in 2 years.

generj 10y ago
It's not impossible to have a low debt degree today. I've worked interesting jobs part-time during the school year and full time during breaks and will graduate without a dime of debt. I've met many students with a similar financial background.
- twoquestions 10y ago
  I'd be very interested in the details on how you were able to accomplish this. What kind of part-time job will both pay enough to fund college while being flexible enough to allow for both class time, and leave you with enough mental energy to study and do homework? I worked through my college education yet still graduated with a modest amount of debt. There were choices I could have made to improve my financial situation, but no amount of penny-pinching would have completely mitigated the debt I would have had to take on, save a rich relative bankrolling me.
  - pilom 10y ago
    I bet the big difference in experiences relates to what type of school. In state tuition at many state schools can be 1/5 of top-tier private school tuition. Using part time and summer jobs to pay for school that costs $12k/year while living at home is much easier than paying for a school that costs $50k/year plus housing.
    - generj 10y ago
      Yep. To add on to my earlier answer, if I had gone to any of my public in-state universities, the lottery would have paid for all of my tuition and even some of my books. Georgia is a great place to live if you are a graduating high school senior. Lots of my friends have kept the HOPE scholarship their entire college careers. Depending on what school you attend, it may be worth taking on lots of debt. Certainly Harvard is worth the extra money.

aphextron 10y ago

This doesn't even make financial sense for the government. If you are guaranteeing that federal student loan debts will be deducted from social security payments, why not let me make those payments pre-tax before retirement? Why would you take one third of my paycheck into social security, which may or not pay out for me in decades, rather than just sending it straight to my loan balance?

nickff 10y ago
The reason that the government takes your money up front instead of letting you use it against your debt is because the government has liquidity/solvency issues. Social security is a wealth transfer program, not a retirement saving program. Social Security takes money from the young, and gives it to the old; this is exacerbated by the fact the 'current old' did not 'pay-in' as much as they will be taking out, so they need your money right now.
- rqebmm 10y ago
  The Social Security Trust Fund has no looming liquidity issues for the next 20 years or so[1]. Solvency is a different issue, and has nothing to do with student debt payments. [1]https://en.wikipedia.org/wiki/Social_Security_Trust_Fund https://en.wikipedia.org/wiki/Social_Security_Trust_Fund
  - nickff 10y ago
    I said the government has liquidity/solvency issues, and it does; the SSTF is supposed to peak in 2021, but its largest holding is US Treasury bills, so the government will either have to 'run a surplus' by then (to pay off the treasuries) or default on debt, in order to continue paying out Social Security. Do you believe that the federal budget will be running a surplus by 2021? None of this is directly due to student debt payments, I was trying to explain why the government resists deferring Social Security taxes.

mulmen 10y ago

Where I went to school my student fees went straight to the state board of education. This money was then used to pay for all schools across the state including grade schools, middle schools and high schools. The university received a portion of the fees I paid but ended up losing a few hundred dollars a year per undergrad. The difference was made up by grants, land and inventions created by the university, most of which existed only because of grad students. Effectively the people of the state were unwilling to pay for their children and the future of their state and they made the university students pick up the difference. Add to that the fact that many degrees are unemployable because the economy is/was in shambles and you end up with students paying tax multiple times on their education.

achievingApathy 10y ago

Maybe someone just needs to explain this to me like I'm 5, but no one forces someone to take out $125,000 in loans to go to a private college. I graduated from community college and then went to a state four-year for my degree, and I came out relatively debt-free. I don't want to force people into a lifetime of poverty because they made one bad financial decision at the age of 19, but I took out loans, too. I also think it's part of the college experience to eat Ramen every night for a three weeks and scrounge for beer money so I might be a bit biased. The money that I borrowed, that I paid back to my school (as promised) didn't go sit in some fat cat's bank on Wall Street. My school turned around and loaned that money back out to the next round. So it's incredibly selfish I feel for anyone to think they are free from any responsibility to pay back their loans because they were duped at the expense of someone else who now might not get the chance to go at all.