If you are counting on Social Security to assist in your retirement, you have something new to worry about beyond the constant political cry that the system will go broke before you can use it. The federal government can withhold a portion of your Social Security check to recover unpaid student loans. They have recently stepped up enforcement of this ability.
In 2000, there were a total of six cases of the government withholding from Social Security for student loans. On August 6, 2012, 115,000 people had their Social Security checks reduced. Many of these people, if not most, did not use the student loans for themselves. These were loans they cosigned for children and grandchildren.
The good news is that government can only reduce the amount handed out in Social Security by 15% to pay student loans. Unfortunately, that is a lot for people who are relying on Social Security. Make sure that you are careful about cosigning any loans, especially student loans. Talk to an attorney about how to plan for your retirement without solely relying on Social Security.
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