A caregiver in retirement worries a decades-old student loan will drain what little income she has.

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I can’t afford to pay this student loan. I had to give up school to become a caregiver for a totally disabled veteran. I don’t get paid for doing this. I get a pittance of Social Security after turning 65, but I can’t afford payments. How do I get the loan forgiven and not pay it? There is no co-signer on the loan – at least I don’t remember having one. We’re talking about almost 40 years ago.

—Patricia H in Michigan

Eric Olsen, Executive Director of HELPS Nonprofit Law Firm, answers…

Hi Patricia,

This is a tough situation that many seniors are starting to face with old student loan debt. Student loans are not forgiven except for disability, so forgiveness likely won’t work in your situation.

How much of Social Security can be garnished and when?

It is possible for up to 15 percent of your Social Security to be garnished or offset for past-due student loans. The loan servicer must give you 30 days’ notice before they can garnish your wages. If you have already received that notice, then you have a limited time to act.

However, you have options that can help you avoid garnishment. Your best option may be to enter a repayment plan with the lender.

An income-driven repayment plan could mean you won’t pay anything

Persons receiving income less than 150% of the poverty line – which is currently $1,610 per month for a single person—can apply for an income-driven repayment plan.

Low-income borrowers who enter this type of repayment plan often pay zero dollars per month for their student loans. The payments are calculated based on your income, so if you are solely receiving Social Security, then your income may be low enough to qualify for a zero-dollar payment.

If the loan is current, you can apply immediately for this plan. Simply call the loan servicer and let them know you would like to enter an income-driven repayment plan. They are required by law to facilitate that for you.

What to do if the loan is already in default

If the loan is in default, then you will need to call the collection agency handling the student loan and asked to be placed in “rehabilitation.”

In rehabilitation, you will need to make monthly payments of a minimum of $5 per month.  After six months, there would be no possibility of offset of your Social Security. You should be able to qualify to have the student loan placed in income-driven repayment, possibly with that payment of zero dollars per month.

Even for someone making more than 150% of the poverty line, it’s still possible to get smaller payments and avoid garnishment of Social Security or wages. It’s typically better to enter a plan that allows you to make payments based on your income, rather than just allowing the garnishment which could take more of your Social Security benefits.

You do not need an attorney to apply for income-driven repayment. However, you can contact HELPS Nonprofit Law Firm at (855) 435-7787 if you have any questions. HELPS assists seniors, Veterans, and disabled persons who are facing challenges with debt and collectors.

Get help if you’re overwhelmed by student loan debt.

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About the Author

Eric Olsen

Eric Olsen

Eric Olsen is an attorney with more than forty years of consumer law-related experience. Born and raised in the Pacific Northwest, Eric graduated from the University of Oregon Law School. He founded the area's largest consumer bankruptcy firm and has filed 40,000 bankruptcies. Eric counseled with many lower-income senior citizens during this time. Because their income and assets were protected from collectors, he told them bankruptcy was not necessary. But harassing debt collection calls and intimidating demand letters made their lives miserable. Eric was very familiar with the federal Fair Debt Collection Practices Act. He knew debt collectors could not directly communicate with a person represented by an attorney. There was no national organization representing the specific needs of the 40 million lower-income American seniors. So Eric left the law firm he founded in 2015 and started Help Eliminate Legal Problems for Seniors, HELPS. HELPS is a charitable 501 (c) nonprofit law firm that represents seniors and disabled persons ongoing in all 50 states to prevent unwanted collector contact.

Published by Debt.com, LLC