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Public Service Student Loans

There are easy steps that can be taken to avoid wage garnishment over delinquent student loans and credit card debt, allowing consumers to have one affordable monthly payment and in some cases pay nothing at all. (For credit card debt relief visit this page here)

At the Senate Committee hearing, the Government Accountability Office, a research arm of the Congress, revealed that over 150,000 consumers last year had their Social Security taken because of delinquent student loan debt. If the Federal government was more transparent about how the income-based student loan repayment plans work, these consumers could have been proactive towards preventing student loan garnishment.

The following article will:

  • Reveal how to avoid making payments on student loans if your only income is Social Security
  • Explain how the income-based repayment plans work and how to apply
  • Teach you about what to do if you have delinquent student loan payments and how to avoid wage garnishment
  • Show you how to get student loan “late payments” and “delinquency/default marks” removed from credit reports 

Does the Federal Government Consider Social Security as Income Under The Income-Based Repayment Plans?

The government doesn’t consider Social Security as income when determining eligibility for an income-based repayment plan for student loans. And, you may not have to pay your student loans if most of your income is from social security and related benefits, including a disability. 

According to a Navient Employee, when Golden Financial spoke on behalf of a client the other day, “Only a portion of Social Security is taken into consideration when determining eligibility under its income-based repayment plans.

This information is essential for consumers to know about, and often people don’t.

What are income-based repayment plans?

Income-based repayment plans for student loans are government programs that allow consumers to have a reduced monthly payment. 

Every year income-based repayment plans need to get recertified, or a student could get kicked out. For consumers to take advantage of the income-based repayment plans that offer loan forgiveness, they must first consolidate their student loans. For step by step instructions on how to consolidate student loans, visit this page next.

 For assistance with student loans by Golden Financial Services, start by completing this online application here.

What student loans qualify for income-based repayment plans?

All federal student loans are qualified, but there are restrictions and guidelines. For example, Parent PLUS loans are restricted to only the Income-Contingent Repayment program and are not eligible for either the Pay As You Earn or Income-Based Repayment Plan. Loan forgiveness can be within ten years for consumers with a Public Service job, such as police officers and teachers. For all other consumers, loan forgiveness can occur with 20-25 years.

Here Are 3 Income-Based Repayment Plans for Student Loans to Choose From:

  1. Income-Based Repayment (IBR)
  2. Pay As You Earn (PAYE)
  3. Income-Contingent Repayment (ICR)

 You can be current or delinquent on student loan payments and still qualify for all of the above programs. 

Borrowers living mostly off of Social Security benefits who also file a tax return generally exclude all of those benefits from their tax return. For those with additional sources of income, up to half of their Social Security benefits show up on their tax returns–but depending on the size of other income, that could still result in a $0 payment owed under the income-based repayment plans. This is because all three income-based plans include an exemption between one hundred, and one hundred and fifty percent of the federal poverty threshold, adjusted for household size. Anyone earning less than $11,671 in 2014 would have an AGI below the exemption, and so would owe nothing in student loan payments.”

Payments are based on a person’s adjusted gross income (AGI). You can verify income by merely electing to have your tax return electronically transferred from the IRS to show the AGI on your most recently filed tax return, which you’ll be prompted to do when filling out the application at If your income is less than what your most recently filed tax return illustrates, use thirty days’ worth of pay stubs from within the last ninety days to verify your income. The lower your income, the smaller your new monthly payment will be. By illustrating a higher number of family members living in your household, you can also reduce your monthly payment on an income-driven repayment plan.

What is considered a family member living in your home? 

Does someone live in your home, and you pay at least 50% of their expenses? That person should be considered an additional family member. If your neighbor lost his home and is temporarily living in your household, make sure to include them as a family member. Unborn children also count as an additional child. If your mother lives with you, count her as an additional family member. 

Simple rules to remember when applying for an income-based repayment plan for student loans:

  • More Family Members + Children Living in Household = Lower Student Loan Consolidated Payment
  • Lower Annual Adjusted Gross Income (AGI) = Lower Student Loan Payment

Delinquent on Student Loan Payments?

No problem! You, too, can benefit from income-based repayment plans. The process stays the same, whether you’re delinquent on payments or not. Go to and consolidate. You can then elect to get on one of the three income-based repayment plans. Every year recertify, and eventually, you’ll be eligible for loan forgiveness. Whether you’re late on student loan payments or current, you have the same rights as anyone else to consolidate and get on an income-based repayment plan. 

How to stop wage garnishment over student loans?

If a wage garnishment were issued, you’d have to take some additional steps before being eligible for student loan consolidation. That extra step includes completing a loan rehabilitation program to stop the garnishment. 

How to get the delinquent and default marks removed from my credit report?

Just consolidating and getting approved for an income-based repayment plan won’t remove the default and delinquency marks from your credit report. Your existing student loans will get paid in full, but the default marks will remain unless you first complete the loan rehabilitation program. To sign up for a loan rehabilitation program, contact the collection agency that’s collecting on your federal student loans. They will ask for income and family size, just like when consolidating at A loan rehabilitation program payment can be as small as $5 per month. After nine consecutive payments, you graduate the program, and the default marks will then get removed from your credit report. You can then proceed with consolidating and getting on an income-based repayment plan that offers loan forgiveness. And what’s great is that you can make more than one payment per month to complete a loan rehabilitation program in a much faster timeframe. 

Avoid wage garnishment by requesting ninety days forbearance before consolidating if you are late on payments. 

For more information on how to deal with your student loans and get loan forgiveness, visit this page next.

Source: Forbes, 12/28/2020

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