When I Retire Will My Social Security Be Reduced Because of Student Loans?

“Dear Steve,

I took out Parent Plus loans for both of my children while they were in school. Each of them also have unsubsidized student loans which they are paying off. Once both children were out of college, I consolidated the Parent Plus loans into one and have been paying them regularly for the past 10 years.

I am 63 and was wondering if the consolidation loans are not paid off by the time I reach my full Social Security age (66), will it affect the amount of Social Security I receive?


Dear Tracey,

It would seem you may have elected a reduced or graduated repayment plan on the consolidated student loans. Under a standard repayment plan they’d be paid off after ten years.

The only way the consolidated federal student loan would reduce the amount you’d receive from Social Security would be if you defaulted on the loan and it eventually went into an administrative wage garnishment. In that case the U.S. Government may also attempt to intercept any tax refund you might be owed each year.

But you appear to be a long way from those negative outcomes. In fact, when you do retire and your income is reduced, you might want to consider enrolling in an Income Contingent Repayment Plan (ICR) where your student loan payment will be potentially reduced and more affordable based on your retirement income. The ICR is the program available for consolidated PLUS loans. For more on that, see this.

The downside to this approach is it will extend the loan out further but the advantage is the payment will be reduced to fit in your future income.

So the bottom line is your Social Security will not be reduced because of the outstanding student loan payment.

Please post your responses and follow-up messages to me on this in the comments section below.


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