Ruling allows seizure of Social Security to repay loans

The Supreme Court unanimously ruled on Wednesday that the
federal government can take funds from individuals’ Social
Security accounts to repay outstanding debts from college
loans.

Senior citizens and disabled people with loan debts will be
impacted by the ruling most immediately, but current students may
feel the consequences of the decision decades into the future.

The decision ““ written by retiring Justice Sandra Day
O’Connor ““ upheld a 1996 federal law that states the
federal government can seize payments in order to repay student
loans that are older than 10 years, including money from Social
Security benefits.

The ruling went against 67-year-old James Lockhart, a disabled
man whose Social Security benefits had been reduced by 15 percent
to cover the college debts he incurred in the 1980s, which total
about $77,000.

Lockhart, who lives in public housing, had sued the federal
government, saying he needed his entire $874 monthly check to pay
for food and medication. He had lost earlier in the 9th U.S.
Circuit Court of Appeals.

The ruling applies to loans that are more than 10 years old and
can draw money from disability and retirement payments from Social
Security.

The court’s decision cleared up the government’s
right to collect old debts through Social Security.

The government started deducting Social Security benefits from
recipients in 2001, and the Bush administration has maintained it
needs to continue to do so because the government has a $5.7
billion debt from student loans that are more than 10 years old.
Total outstanding loans come to about $33 billion.

The primary focus for many critics of the ruling and the
government’s policy was the impact it has on senior citizens,
particularly those with disabilities, like Lockhart.

“It means that you can take the Social Security benefits
of someone who is 90 years old and living on a small amount of
money,” said Brian Wolfman, director of the Public Citizen
Litigation Group and lawyer for Lockhart.

Though students are years away from receiving Social Security
benefits, the ruling has caused concern from some in the UCLA
community, particularly in light of rising University of California
fees and students’ increasing need to take out loans to cover
the cost.

“It’s unfortunate a student will have to pay off
their debt until their old age,” said Ruth Obel-Jorgensen,
organizing director for the UC Students Association.

“It’s saddening public education could cost that
much and it would continue to be a burden on people in the
future,” she said.

By dipping into student loans as a way to balance the federal
budget, some student leaders feel the government is demonstrating
that it is not putting as much emphasis on education as it should
be.

“This is just another example of the federal government
de-prioritizing education for the future,” said Anu Joshi,
president of UCSA.

And Jeannie Biniek, external vice president of the UCLA
Undergraduate Students Association Council, said the government was
“punishing people … who take a risk and take out student
loans to pay for their education.”

With reports from Bruin wire services.