Get Out of Debt Guy

Will the Government Come for My Social Security Over My Parent Plus Loan?

Posted April 11


Dear Steve,

As a single parent I was relieved to obtain a Parent Plus Loan, of which was far beyond my financial capacity. Now I look back on my single parent guilt, not realizing the predatory nature of this loan.

What is the latest status on garnishment of Social Security for Parent Plus Loans? Is there any new legislation? How can I protect myself from this?



Dear Helene,

That is an amazingly insightful question. Yes, you did come to the realization there was much more behind the loan than just facilitating an education. As I always say, debt is the symptom of the greater issue and underlying cause.

In this case, the government and school allowed you to go on the hook for loans you may never have been able to afford. On one hand the argument is people should be astute to know if they can afford the loans. On one hand that requires math but on the other hand it also requires a crystal ball to predict what the future will bring. The lender assumes your life will not have any obstacles and you will always be able to make the payment.

The reality is every loan involves an element of risk. And the decks are stacked against the borrower when it comes to shifting the risk. The lender will attempt to push as much risk off onto the consumer in order to protect the lender.

A Parent Plus loan is a loan taken out by a parent to help pay for higher education. It is the parents responsibility to repay. And if the loan defaults the government could garnish Social Security and intercept tax refunds. If allowed to default, a large collection balance can be added and the total amount owed will explode.

So you’ve been through a very wise introspective awakening about how you got into this mess. And the good news is there is a reasonable solution to help deal with the debt and avoid a future garnishment or loads of bad stuff happening.

I invite you to read The Best Way to Lower Parent PLUS Loan Payments and get your loan under control and into a payment plan that is based on income rather than something you flat out can’t afford.

This article by Steve Rhode first appeared on Get Out of Debt Guy.


Please with your account to comment on this story. You also will need a Facebook account to comment.

Oldest First
View all

About this Blog:

Steve Rhode has had careers in opthalmology, real estate and as the head of a nonprofit debt counseling firm. On his blog, he offers hard-won, free advice about getting out of debt, consolidation and making the right choices as you manage your money.