Latest news with #EllenKeast
Yahoo
2 days ago
- Business
- Yahoo
Education Department halts plans to garnish Social Security benefits for defaulted student loans
Social Security recipients who are behind on their student loans can breathe a sigh of relief — for now. The US Department of Education said it's pausing plans to garnish Social Security benefits from people with student loans in default. The department previously announced in April that it would begin collections as soon as June 1 after nearly a five-year hiatus. That was rattling news for those who depend on those checks to cover their monthly costs. This week, the Trump administration did an about-face. 'The Department has not offset any Social Security benefits since restarting collections on May 5, and has put a pause on any future Social Security offsets,' Ellen Keast, a Department of Education spokeswoman, told Yahoo Finance in an email on Tuesday. The administration 'is committed to protecting Social Security recipients who oftentimes rely on a fixed income,' she wrote. 'In the coming weeks, the Department will begin proactive outreach to recipients about affordable loan repayment options and help them back into good standing.' Other Treasury offsets are proceeding, including wage garnishment for federal student loans and overdue taxes, which will begin later this summer. Roughly 452,000 Americans over 62 have student loans in default, according to the Consumer Financial Protection Bureau. Read more: Should you refinance your student loans? Approximately 1 in 3 of the 1.3 million Social Security beneficiaries with student loans rely on an average monthly benefit of $1,523 for 90% of their income, according to the CFPB researchers. 'These are folks who likely depend on Social Security for most or all of their income, so this policy by the Trump administration would inflict a great deal of pain — and the dollars involved are far too small to have a significant impact on Social Security's solvency," said Mark Miller, a retirement expert and author of 'Retirement Reboot." 'The fact that people arrive at retirement carrying student loans also is a reminder of the economic pressures people are facing during their working years — the high cost of housing, childcare and tuition, healthcare expenses, and the emergencies that inevitably crop up along the way." Unemployment also plays a role, Miller said. "So, it's not surprising that some people arrive at retirement still carrying student debt — and that some of them are in default.' The pause provides time if you've fallen behind on your loans or don't know your status. Enroll in a repayment plan If there have been no recent changes to your income or marital status, you can send your most recent Federal 1040 tax return, either signed by you or stamped by your tax preparer, to the Department of Education's Default Resolution Group. This is the first step toward setting yourself up on one of several income-based repayment plans. Read more: How to apply for IDR forgiveness If there have been recent changes to your income or marital status, or for other repayment options, reach out to the department at subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Financial hardship and disability discharges As many as 8 in 10 Social Security beneficiaries with loans in default may be eligible to suspend or reduce forced collections due to financial hardship, according to the CFPB. To show hardship, you'll need to provide documentation of your income and expenses to the Department of Education. If your eligible monthly expenses exceed or match your income, the department may grant a financial hardship exemption. One in 5 Social Security beneficiaries may be eligible for discharge of their loans due to a disability, according to the CFPB researchers. The Total and Permanent Disability discharge program cancels federal student loans and halts forced collections for disabled borrowers who meet certain requirements. Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including the forthcoming "Retirement Bites: A Gen X Guide to Securing Your Financial Future," "In Control at 50+: How to Succeed in the New World of Work" and "Never Too Old to Get Rich." Follow her on Bluesky. Sign up for the Mind Your Money newsletter Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
Education Department halts plans to garnish Social Security benefits for defaulted student loan
Social Security recipients who are behind on their student loans can breathe a sigh of relief — for now. The US Department of Education said it's pausing plans to garnish Social Security benefits from people with student loans in default. The department previously announced in April that it would begin collections as soon as June 1 after nearly a five-year hiatus. That was rattling news for those who depend on those checks to cover their monthly costs. This week, the Trump administration did an about-face. 'The Department has not offset any Social Security benefits since restarting collections on May 5, and has put a pause on any future Social Security offsets,' Ellen Keast, a Department of Education spokeswoman, told Yahoo Finance in an email on Tuesday. The administration 'is committed to protecting Social Security recipients who oftentimes rely on a fixed income,' she wrote. 'In the coming weeks, the Department will begin proactive outreach to recipients about affordable loan repayment options and help them back into good standing.' Other Treasury offsets are proceeding, including wage garnishment for debts, including federal student loans and overdue taxes, which will begin later this summer. Roughly 452,000 Americans over 62 have student loans in default, according to the Consumer Financial Protection Bureau. Read more: Should you refinance your student loans? Approximately 1 in 3 of the 1.3 million Social Security beneficiaries with student loans rely on an average monthly benefit of $1,523 for 90% of their income, according to the CFPB researchers. 'These are folks who likely depend on Social Security for most or all of their income, so this policy by the Trump administration would inflict a great deal of pain — and the dollars involved are far too small to have a significant impact on Social Security's solvency," said Mark Miller, a retirement expert and author of 'Retirement Reboot." 'The fact that people arrive at retirement carrying student loans also is a reminder of the economic pressures people are facing during their working years — the high cost of housing, childcare and tuition, healthcare expenses, and the emergencies that inevitably crop up along the way." Unemployment also plays a role, Miller said. "So, it's not surprising that some people arrive at retirement still carrying student debt — and that some of them are in default.' The pause provides time if you've fallen behind on your loans or don't know your status. Enroll in a repayment plan If there have been no recent changes to your income or marital status, you can send your most recent Federal 1040 tax return, either signed by you or stamped by your tax preparer, to the Department of Education's Default Resolution Group. This is the first step toward setting yourself up on one of several income-based repayment plans. Read more: How to apply for IDR forgiveness If there have been recent changes to your income or marital status, or for other repayment options, reach out to the department at subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Financial hardship and disability discharges As many as 8 in 10 Social Security beneficiaries with loans in default may be eligible to suspend or reduce forced collections due to financial hardship, according to the CFPB. To show hardship, you'll need to provide documentation of your income and expenses to the Department of Education. If your eligible monthly expenses exceed or match your income, the department may grant a financial hardship exemption. One in 5 Social Security beneficiaries may be eligible for discharge of their loans due to a disability, according to the CFPB researchers. The Total and Permanent Disability discharge program cancels federal student loans and halts forced collections for disabled borrowers who meet certain requirements. Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including the forthcoming "Retirement Bites: A Gen X Guide to Securing Your Financial Future," "In Control at 50+: How to Succeed in the New World of Work" and "Never Too Old to Get Rich." Follow her on Bluesky. Sign up for the Mind Your Money newsletter
Yahoo
2 days ago
- Business
- Yahoo
Education Department halts plans to garnish Social Security benefits for defaulted student loan
Social Security recipients who are behind on their student loans can breathe a sigh of relief — for now. The US Department of Education said it's pausing plans to garnish Social Security benefits from people with student loans in default. The department previously announced in April that it would begin collections as soon as June 1 after nearly a five-year hiatus. That was rattling news for those who depend on those checks to cover their monthly costs. This week, the Trump administration did an about-face. 'The Department has not offset any Social Security benefits since restarting collections on May 5, and has put a pause on any future Social Security offsets,' Ellen Keast, a Department of Education spokeswoman, told Yahoo Finance in an email on Tuesday. The administration 'is committed to protecting Social Security recipients who oftentimes rely on a fixed income,' she wrote. 'In the coming weeks, the Department will begin proactive outreach to recipients about affordable loan repayment options and help them back into good standing.' Other Treasury offsets are proceeding, including wage garnishment for debts, including federal student loans and overdue taxes, which will begin later this summer. Roughly 452,000 Americans over 62 have student loans in default, according to the Consumer Financial Protection Bureau. Read more: Should you refinance your student loans? Approximately 1 in 3 of the 1.3 million Social Security beneficiaries with student loans rely on an average monthly benefit of $1,523 for 90% of their income, according to the CFPB researchers. 'These are folks who likely depend on Social Security for most or all of their income, so this policy by the Trump administration would inflict a great deal of pain — and the dollars involved are far too small to have a significant impact on Social Security's solvency," said Mark Miller, a retirement expert and author of 'Retirement Reboot." 'The fact that people arrive at retirement carrying student loans also is a reminder of the economic pressures people are facing during their working years — the high cost of housing, childcare and tuition, healthcare expenses, and the emergencies that inevitably crop up along the way." Unemployment also plays a role, Miller said. "So, it's not surprising that some people arrive at retirement still carrying student debt — and that some of them are in default.' The pause provides time if you've fallen behind on your loans or don't know your status. Enroll in a repayment plan If there have been no recent changes to your income or marital status, you can send your most recent Federal 1040 tax return, either signed by you or stamped by your tax preparer, to the Department of Education's Default Resolution Group. This is the first step toward setting yourself up on one of several income-based repayment plans. Read more: How to apply for IDR forgiveness If there have been recent changes to your income or marital status, or for other repayment options, reach out to the department at subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Financial hardship and disability discharges As many as 8 in 10 Social Security beneficiaries with loans in default may be eligible to suspend or reduce forced collections due to financial hardship, according to the CFPB. To show hardship, you'll need to provide documentation of your income and expenses to the Department of Education. If your eligible monthly expenses exceed or match your income, the department may grant a financial hardship exemption. One in 5 Social Security beneficiaries may be eligible for discharge of their loans due to a disability, according to the CFPB researchers. The Total and Permanent Disability discharge program cancels federal student loans and halts forced collections for disabled borrowers who meet certain requirements. Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including the forthcoming "Retirement Bites: A Gen X Guide to Securing Your Financial Future," "In Control at 50+: How to Succeed in the New World of Work" and "Never Too Old to Get Rich." Follow her on Bluesky. Sign up for the Mind Your Money newsletter Sign in to access your portfolio
Yahoo
3 days ago
- Business
- Yahoo
Education Department says it will not garnish Social Security of student loan borrowers in default
Borrowers who have defaulted on their federal student loans will no longer be at risk of having their Social Security benefits garnished, an Education Department spokesperson said Tuesday. The government last month restarted collections for the millions of people in default on their loans. An estimated 452,000 people aged 62 and older had student loans in default, according to a January report from the Consumer Financial Protection Bureau. The department has not garnished any Social Security benefits since the post-pandemic resumption of collections and has paused 'any future Social Security offsets,' department spokesperson Ellen Keast said. 'The Trump Administration is committed to protecting Social Security recipients who oftentimes rely on a fixed income,' Keast said. Advocates encouraged the Trump administration to go further to provide relief for the roughly 5.3 million borrowers in default. 'Simply pausing this collection tactic is woefully insufficient,' said Persis Yu, executive director of the Student Borrower Protection Center. "Any continued effort to restart the government's debt collection machine is cruel, unnecessary and will further fan the flames of economic chaos for working families across this country.' Student loan debt among older people has grown at a staggering rate, in part due to rising tuition that has forced more people to borrow heavily. People 60 and older hold an estimated $125 billion in student loans, according to the National Consumer Law Center, a sixfold increase from 20 years ago. That led Social Security beneficiaries who have had their payments garnished to balloon from approximately 6,200 beneficiaries to 192,300 between 2001 and 2019, according to the CFPB. ___ Associated Press writer Collin Binkley contributed to this report. ___ The Associated Press' education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at
San Francisco Chronicle
3 days ago
- Business
- San Francisco Chronicle
Education Department says it will not garnish Social Security of student loan borrowers in default
Borrowers who have defaulted on their federal student loans will no longer be at risk of having their Social Security benefits garnished, an Education Department spokesperson said Tuesday. The government last month restarted collections for the millions of people in default on their loans. An estimated 452,000 people aged 62 and older had student loans in default, according to a January report from the Consumer Financial Protection Bureau. The department has not garnished any Social Security benefits since the post-pandemic resumption of collections and has paused 'any future Social Security offsets,' department spokesperson Ellen Keast said. 'The Trump Administration is committed to protecting Social Security recipients who oftentimes rely on a fixed income,' Keast said. Advocates encouraged the Trump administration to go further to provide relief for the roughly 5.3 million borrowers in default. 'Simply pausing this collection tactic is woefully insufficient,' said Persis Yu, executive director of the Student Borrower Protection Center. "Any continued effort to restart the government's debt collection machine is cruel, unnecessary and will further fan the flames of economic chaos for working families across this country.' Student loan debt among older people has grown at a staggering rate, in part due to rising tuition that has forced more people to borrow heavily. People 60 and older hold an estimated $125 billion in student loans, according to the National Consumer Law Center, a sixfold increase from 20 years ago. That led Social Security beneficiaries who have had their payments garnished to balloon from approximately 6,200 beneficiaries to 192,300 between 2001 and 2019, according to the CFPB. ___ ___ The Associated Press' education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at
