As you get closer to retirement, you likely have social security benefits on your mind. Many seniors rely on social security as their supplemental or primary income. However, you should be mindful of social security and student loans, especially if you have unpaid ones.

How do student loans impact Social Security?

An active student loan balance won’t affect your social security benefits if you’ve maintained your payment schedule. Unpaid student loans and social security become an issue if you default on student loans. Borrowers default on student loans after missing payments for 270 days or longer. Defaulting on your student loans can take your retirement benefits partially.

In 1996, President Bill Clinton signed the Debt Collection Improvement Act (DCIA), a law saying the federal government can garnish social security for student loans. Under the DCIA, the Social Security Administration can take up to 15% of your monthly benefits as long as they remain at $750 or higher.

How will student loan debt affect future retirees?

Student loan debt has increased significantly in the past few decades as higher education costs rise. Some retirees have student loan debt, but the problem will likely increase as the years pass. Data shows adults between 25 to 49 hold nearly 70% of all student loan debt. However, adults between 50 and 61 with debt tend to have a balance of around $45,000.

Unfortunately, student loan forgiveness at age 65 doesn’t happen for those who reach retirement age. As Millennial and Gen Z adults grow older, they’ll be more likely to deal with student loans and social security offset as debt increases with the cost of living. One consideration for current and future retirees is their taxable income. The federal government exempts 15% of your social security benefits, leaving you more money to pay off debts.

Student loan forgiveness doesn’t happen for those who reach retirement age.

Do student loans affect Medicare benefits?

The three most important entitlement programs in the U.S. include Social Security, Medicare, and Medicaid. You may wonder if you can get Medicare if you owe student loans. Federal law says you are still eligible for Medicare, even if you default on student loan payments. Debt has no impact on your ability to get benefits.

You are still eligible for Medicare, even if you default on student loan payments. Debt has no impact on your ability to get benefits.

The same idea applies to Medicaid. This program gives health coverage for low-income and disabled adults and doesn’t count student loans as income. If you have a child with student loans, you may have co-signed on their loan — fortunately, the signing has no impact on your coverage.

What about social security disability and student loans? Like Medicaid, the government cannot use your supplemental security income benefits to offset your student loan debt.

Are any changes coming to student loan payments?

The past year has seen plenty of news concerning student loan payments. Some executive and legislative decisions could impact social security and student loan forgiveness.

In August 2022, President Biden announced the federal government would forgive $10,000 of student loan debt — or $20,000 if they received Pell Grants — for borrowers earning under $125,000 annually. The forgiveness program has faced multiple legal challenges and awaits a decision from the Supreme Court to determine its fate. Student loan payment will resume 60 days after the high court announces its vote.

Last December, House Democrats introduced legislation to grant student loan forgiveness to social security disability insurance and Medicare recipients. The Student Loan Relief for Medicare and Social Security Recipients Act of 2022 expired at the end of the 117th U.S. Congress. House members must reintroduce the bill for consideration in the current session.

How can borrowers avoid defaulting on student loans?

Student loan repayment after retirement is still necessary. Older Americans may have no social security and student loan debt hanging over their heads. There are ways you can deal with your student loan and retirement financials to avoid defaulting.


Some situations qualify you for a student loan discharge. For example, your school may have closed while you were a student or soon after. A college may have falsely claimed its certification, leading to discharge for borrowers. If your job leaves you with a permanent disability, you can file for a discharge because of your inability to work. Death and bankruptcy are also acceptable reasons for student loan discharge.

Student loan forgiveness

There are opportunities to earn student loan forgiveness for social security recipients. For example, say you work for a government agency or non-profit organization. The government may forgive your loans through the Public Service Loan Forgiveness Program if you make monthly payments for 120 months or 10 years.

Income-based payment plan

If you’re still paying off your student loans, you can use an income-based plan to ensure the payments don’t take a significant portion of your monthly income. These setups intend to help borrowers avoid delinquency and default. Income-based plans can be as few as 10 years and extend to 25 years. The Revised Pay As You Earn takes 10% of your discretionary income and forgives your loans after 20 years of payments.

Student loan default and Social Security

Retirement is a fun time for many because it’s a time to relax and reflect on your long life of work. However, social security garnishment from a student loan can disrupt your plans. If necessary, use income-based repayment plans and forgiveness programs to ensure your smooth transition into retirement.

Jack Shaw is a writer and editor for the lifestyle magazine Modded, as well as a car enthusiast and lover of nature, trying to enjoy life one day at a time.