In a nutshell, the answer is no, student loans are debt, and do not count as income.
The Social Security Administration (SSA) may consider the mortgage loan and any resulting debt or assets as resources when determining your eligibility for SSI. This could result in a reduction or loss of your SSI benefits if your resources exceed the program's limits.
If you've defaulted on your federal student loans, the government can garnish your Social Security benefits. They can take up to 15% of your monthly payment without giving you a court hearing or additional warnings. This hits older Americans the hardest.
Supplemental Security Income (SSI)
Pell Grants can be used without jeopardizing SSI eligibility. Grants are not considered as income or assets.
Key Takeaways. If you default on your student loans, your wages can be garnished, your Social Security benefits can be reduced, and a range of other consequences can come into play. Generally speaking, up to 15% of your Social Security income can be garnished through a process called Treasury offset.
Exit from the SSI program can be due to death, medical recovery, excess income (earned or unearned), excess resources, or a change in living arrangements. In many cases, for instance when dealing with excess income, payments are suspended.
After at least 20 years of student loan payments under an income-driven repayment plan — IDR forgiveness and 20-year student loan forgiveness. After 25 years if you borrowed loans for graduate school — 25-year federal loan forgiveness.
Prolonged delinquency can lead to partial withholding of Social Security benefits as payments towards federal student loans. Delinquent retirees could have retirement benefits withheld, while delinquent younger borrowers could also be affected through withholding of disability benefits.
If you default on a federal student loan, then your wages or bank accounts can be garnished without a court order or judgment. The maximum that can be withheld for federal student loan garnishment is 15% of your disposable income.
If the value of your resources that we count is over the allowable limit at the beginning of the month, you cannot receive SSI for that month. If you decide to sell the excess resources for what they are worth, you may receive SSI beginning the month after you sell the excess resources.
Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.
Borrowers can use personal loans for all kinds of purposes, but the Internal Revenue Service (IRS) cannot treat loans like income and tax them, with one significant exception: Personal loans are not considered income for the borrower unless the loan is forgiven.
When filing taxes, don't report your student loans as income. Student loans aren't taxable because you'll eventually repay them. Free money used for school is treated differently. You don't pay taxes on scholarship or fellowship money used toward tuition, fees and equipment or books required for coursework.
Student loan interest payments are reported both to the Internal Revenue Service (IRS) and to you on IRS Form 1098-E, Student Loan Interest Statement.
Identifying Monthly Debts
This means that required monthly expenses count toward DTI, while discretionary purchases you make each month don't count against you. Bills that can count toward DTI each month include: Student loans.
HOW DOES A LOAN AFFECT MY SSI BENEFIT? If you enter into a valid loan agreement, the value of the cash or item you receive is not income and does not reduce your Supplemental Security Income (SSI) benefit.
By law, Social Security can take retirement and disability benefits to repay student loans in default. Social Security can take up to 15% of a person"s benefits. However, the benefits cannot be reduced below $750 a month or $9,000 a year. Supplemental Security Income (SSI) cannot be offset to repay these debts.
Income driven repayment plans allow borrowers to make student loan payments based on their discretionary income. After 20 years — sometimes 25 — the remaining balance is forgiven. While forgiveness is distant, these plans allow many retirees and seniors living on a fixed income to have an affordable payment.
The 7-year Rule And Student Loans
According to Experian, once you start making payments, any late payments that are 7 years old will be erased from your credit report, but the rest of the account history will stay.
Starting in September 2021 and continuing quarterly after that, eligible borrowers identified as totally and permanently disabled through data matching with the Social Security Administration (SSA) will automatically have their federal student loans discharged.
Are federal student loans forgiven after 20 years? Yes, federal student loans may be forgiven after 20 years under certain circumstances. But only certain types of loans are eligible for forgiveness, and you must be enrolled in a qualifying repayment plan.
For example, effective 09/30/2024, if someone helps pay for your rent, mortgage, or utilities, we may reduce the amount of your SSI. Also, if others in your household pay for or provide all of your meals and your shelter, we reduce the amount of your SSI.
Social Security will take into consideration the amount of your assets, because it is a needs-based program. To be eligible for SSI, your assets must be less than $2,000 for an individual and less than $3,000 for a married couple. However, not all assets count towards the resource limits.
A couple may get SSI if they have unearned income of less than $1,470 a month in 2025. Because a larger portion of earned income isn't counted, a person who gets SSI can earn up to $2,019 a month ($2,985 for a couple) and still get SSI.