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Education Department Bureaucracy Keeps Disabled Borrowers in Debt
Posted on Feb 14, 2011
By Sasha Chavkin, Cezary Podkul, Jeannette Neumann and Ben Protess
In some cases, borrowers see even their Social Security disability benefits garnished by the federal government to pay down their student loans.
Scott Creighton, a former carpenter and draftsman living in Tampa, Fla., was declared disabled by Social Security in September 2009. Three years before, he had suffered a pulmonary embolism—a blood clot traveled from his leg to block the main artery of his lung—that left him unable to work a full day or repay his federal student loans.
“The claimant has the following severe impairments: deep vein thrombosis, chronic obstructive pulmonary disease, and depression,” ruled Social Security Judge Christopher Messina. “Considering the claimant’s age, education, work experience, and residual functional capacity, there are no jobs that exist in significant numbers in the national economy that the claimant can perform.”
The Education Department is still collecting on Creighton’s student loans. Soon after the judge’s decision, Creighton began receiving calls from Enterprise Recovery Systems, a debt collector acting on behalf of the department. On the advice of a customer service agent, he requested a disability discharge of his debt and sent Enterprise his medical records and the Social Security judge’s decision.
In November 2009, Creighton received a rejection letter from Enterprise. It said he had failed to prove that his condition had not existed when he took out his loans, even though he obtained the last of his federal loans in 1993, more than a decade before the embolism.
Enterprise told Creighton he could apply to the Education Department to forgive his loans if he would never be able to work again. But although his condition is permanent, he still hopes to work one day. Enterprise never mentioned the law easing the standard for discharge to five years of disability, Creighton says, and he decided not to submit such an application to the department.
So, for almost a year, the Education Department has been garnishing 15 percent of Creighton’s monthly disability checks from Social Security to pay off his student loans. The department takes $170 out of his monthly benefit of $1,135, reducing it to $965.
“One hundred and seventy dollars may not seem like a lot, but I make less than a thousand a month on fixed income,” Creighton says. “That has a huge effect on me.”
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