On December 7, 2005, the United States Supreme Court, in Lockhart v. United
States et al., unanimously held the United States Government can seize
a person's Social Security benefits to pay old student loans. The
case interprets the Social Security law and could signal other threats
In 2002, the Government began withholding Social Security Benefits from
James Lockhart, a disabled sixty-seven year old former postal worker.
Lockhart incurred student loans between 1984 and 1989 under the Guaranteed
Student Loan Program; some of the loans were outstanding for over ten years.
Lockhart's Social Security Benefits, totaling $874.00 per month, were
cut by 15% to cover the student loan debts.
Lockhart contended the ten-year statute of limitations in the Debt Collection
Act of 1982, 31 USC § 3716(e)(1), barred the Government's action
offsetting his Social Security benefits to repay overdue student loans.
Petitioner further claimed the availability of offsets against Social
Security Benefits is limited because the Social Security Act, 49 Stat.
620, as amended, makes Social Security benefits, in general not "subject
to execution, levy, attachment, garnishment, or other legal process."
42 USC § 407(a).
Another operative statute examined was the Higher Education Technical Amendments
of 1991, 20 USC § 1091(a)(2)(D), which eliminated time limitations
on suits to collect student loans.
When the Court examined the Social Security Act and Debt Collection Act
in conjunction with the Higher Education Technical Amendments, the Court
determined time limitations were essentially eliminated as to certain
loans: "Notwithstanding any other provision of statute…no
limitations shall terminate the period within which suit may be filed,
a judgment may be enforced, or an off set, garnishment, or other action
initiated or taken." 20 USC § 1091a(a)(2). The Court, therefore,
determined the Higher Education Technical Amendments did not make Social
Security Benefits subject to off-set.
The Court, however, held "it is clear that the Higher Education Technical
Amendments remove the ten-year limit that would otherwise bar, off setting
Petitioner's Social Security Benefits to pay off a student loan debt."
Despite Lockhart's argument, Congress could not have intended in 1991
to repeal the Debt Collection Act's statute of limitations as to offsets
against Social Security benefits, the Court held the fact Congress did
not foresee all consequences of an enactment is not sufficient for refusing
to give effect to a statute's plain meaning.
The Bush Administration maintains the Lockhart case is important because
outstanding student loans total approximately $33 Billion, which includes
about $7 Billion in delinquent debt. Of the delinquent loans, about half
are over ten years old, the government lawyers have said.