OFFICIALS LEGISLATION INTEREST GROUPS PUBLIC STATEMENTS COMMITTEES VETOES

Statements on Introduced Bills and Joint Resolutions

Floor Speech

Date: Sept. 18, 2014
Location: Washington, DC
Issues: Senior Citizens Entitlements and the Safety Net Higher Education

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By Ms. COLLINS (for herself and Mr. NELSON):

S. 2896. A bill to amend title 31, United States Code, to adjust for inflation the amount that is exempt from administrative offsets by the Department of Education for defaulted student loans; to the Committee on Finance.

Ms. COLLINS. Mr. President, today Senator Nelson and I are introducing legislation to limit the amount the Federal Government can garnish from Social Security benefits for unpaid student loan debt. Our bill would adjust the current $750 garnishment floor for inflation and index it going forward, to make sure that garnishments do not force seniors into poverty.

According to a recent study by the Government Accountability Office, GAO, the number of borrowers who have experienced garnishments to Social Security retirement, survivor, or disability benefits to repay student loans has increased over time. In 2001, about 31,000 Social Security beneficiaries had part of their benefits garnished to pay defaulted student loans. In 2013, this number had grown to approximately 155,000 beneficiaries, an increase of 400 percent.

The Debt Collection Improvement Act limits the amount the federal government can garnish from monthly Federal benefits. In 1998, this amount was set at $750 per month, and since then, it has not been raised or adjusted for inflation. This means that the federal government can garnish Social Security benefits so long as the beneficiary is not left with less than $750 per month. Fifteen years ago, this was above the poverty line, but as a result of inflation, the $750 limit now represents just 81 percent of the poverty threshold for a single adult 65 or older.

GAO found that if the garnishment limit had been indexed to match the rate of increase in the poverty threshold, in 2013, 68 percent of all borrowers whose Social Security benefits were garnished for Federal student loan debt would have kept their entire benefit. This means that in more than 2/3 of all cases involving the garnishment of Social Security benefits for unpaid student loan debt, the senior was forced into poverty. Indexing the floor to keep up with cost of living would keep this from happening.

I urge my colleagues to support this legislation to protect the financial security of seniors facing garnishment for unpaid student loan debt.

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