My Entire Social Security Check Was Taken by ACT for Defaulted Student Loans


Dear Steve,

I am in default of my student loans. The government has attached a 15% offset payment from my monthly Social Security plus any state and/or federal tax refunds. This offset has been ongoing in excess of 3 years.
Now, Account Control Technology has taken 100% of my Social Security check.
My attempts to contact ACT has met with silence.

Can Account Control Technology take 100% of my Social Security check to offset my Student Loan debt? Is this legal? I remember a few years back, Pioneer Credit Recovery, tried doing the same. I was working at that time and was collecting Social Security less the 15% offset. A class action suit was brought against them and I received a very small settlement.

How do I stop ACT from taking my check?

Can I get them to return the money in excess of 15%?

AND, how can companies like this do this? Are there no safeguards?



Dear Frank,

There is more going on here and you need some answers.

First off, if you have not rehabilitated the loans, you should. You can then get them in an Income-Driven Repayment program and may wind up with a $0 (zero) monthly payment that would keep you out of default.

You need to talk to your servicer about rehabilitating your loans but it might be easier for you, considering the situation, for you to talk with an expert like Damon Day, who can help.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

You are correct, the maximum Social Security garnishment should be 15% or less. You have to be left with at least $750 in benefits a month.

The rules are:

  • If you are in arrears on federal income taxes, in most cases the Internal Revenue Service can take no more than 15 percent of your monthly Social Security benefit.
  • The garnishment rate for defaulted student loans is also 15 percent but, unlike with taxes, garnishment can’t leave you with less than $750 in benefits a month.
See also  Tell Me How to Stop the Social Security Garnishment for Student Loans

Even if you are being garnished, you can stop it through this administrative process.

If you want to TRY and get a direct answer from a human at the Department of Education, you can contact the Office of the Ombudsman. At the very least they might be able to get you a better contact at ACT.

One thing is clear, you have options here. And you are correct. If the Social Security benefits were withheld in error, you should and will probably get them back.

But until then I think the advice above will help to get you in a better position, fairly quickly.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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