May 23,2019

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Wyden, Brown, Senate Democrats Introduce Bill to Stop Government From Taking Away Social Security Benefits to Pay Off Student Loans

Older Americans and Americans with Disabilities Face Financial Hardship as Federal Government Withholds Social Security Benefits for Skyrocketing Student Loan Payments

Washington, D.C. – Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and Senator Sherrod Brown, D-Ohio, the Ranking Member of the Finance Committee Social Security, Pensions, and Family Policy Subcommittee, along with eight Senate Democrats, today introduced a bill to protect Americans who receive Social Security from having their benefits garnished to pay outstanding federal debts, such as student loans.

“Far too many Oregonians have had their earned Social Security checks stripped away unfairly because of burdensome student loan debt,” Wyden said. “These are seniors, people with disabilities and families with fixed incomes who count on these benefits to make rent, pay bills and fill their prescriptions. Americans pay into Social Security to earn their benefits before they are unable to work. They don’t deserve the disrespect of Uncle Sam taking their earned benefits when they need it most.” 

“Americans work hard to earn their Social Security and we cannot allow it to be stolen away by student debt,” Brown said. “Instead of going after seniors and the disabled, the government should be working to address the skyrocketing cost of higher education and provide Americans with relief from the crushing levels of student debt.”

The bill, the Protection of Social Security Benefits Restoration Act, would repeal a decades-old change in law that allowed earned benefits to be garnished by the federal government to collect federal debts, like student loans, home loans owed to the Veterans Administration and food stamp overpayments.

The number of Americans who have had their benefits garnished by the federal government has dramatically increased in recent years – from 36,000 in 2002 to a staggering 168,000 in 2018 – nearly a fivefold increase. That includes certain people under 65 who receive Social Security Disability Insurance. In 2018 alone, $197 million in Social Security benefits were garnished from workers, according to new data from the U.S. Bureau of Fiscal Service.

Social Security provides vital benefits to millions of Americans who worked and paid into the system. To support the purpose of the program as a fundamental lifeline, the original law protected these earned benefits from attempts to recover all debts. These changes, made in 1996, were never fully debated in Congress, yet they continue to have a profound effect on beneficiaries living on fixed incomes today. Although the 1996 legislation included some provisions to protect the most vulnerable, those protections have not been updated in 20 years. The legislation reestablishes protections in Social Security and other benefit programs, such as Railroad Retirement and Black Lung Benefits, which were in place for more than 40 years before the change was made.

A summary of the bill can be found here. The legislative text can be found here.

Other original co-sponsors include Sens. Kirsten Gillibrand, D-N.Y., Patrick Leahy, D-Vt., Jeff Merkley, D-Ore., Bernie Sanders, I-Vt., Elizabeth Warren, D-Mass., Sheldon Whitehouse, D-R.I., Mazie Hirono, D-Hawaii, and Brian Schatz, D-Hawaii. 

The bill is supported by the American Association of Retired Persons (AARP), National Association of Disability Representatives, AFL-CIO, National Organization of Social Security Claimants’ Representatives (NOSSCR), Social Security Works, The National Organization for Women (NOW), Justice in Aging, American Federation of Teachers (AFT), Paralyzed Veterans of America, Alliance for Retired Americans, Economic Policy Institute and the National Committee to Preserve Social Security and Medicare (NCPSSM).