Can federal student loans take money from my pension?

Education Forums
1

Just curious if federal student loans have the right to garnish pensions. Haven’t received any warnings, but wondering if this could happen down the line.

2

Yes, they can. Federal student loans can garnish up to 15% of your pension through a program called TOP if you’re behind on payments.

3

Rye said:
Yes, they can. Federal student loans can garnish up to 15% of your pension through a program called TOP if you’re behind on payments.

15% seems like a lot! Is there any way to avoid it if it gets to that point?

4

@Kirby
You might be able to work out a payment plan with them to avoid garnishment, so it’s worth discussing with the loan servicer.

5

It’s called the Treasury Offset Program (TOP), and it covers certain federal benefits, like pensions and Social Security, but SSI is safe from garnishment.

6

Kim said:
It’s called the Treasury Offset Program (TOP), and it covers certain federal benefits, like pensions and Social Security, but SSI is safe from garnishment.

Good to know SSI is protected. Does that mean they can take from Social Security retirement benefits though?

7

@Hale
Yes, unfortunately, they can garnish a portion of Social Security retirement but not SSI benefits.

8

From what I know, they’ll usually notify you multiple times before garnishing any federal benefits. If you haven’t gotten any letters, you’re probably fine.

9

Jordy said:
From what I know, they’ll usually notify you multiple times before garnishing any federal benefits. If you haven’t gotten any letters, you’re probably fine.

Thanks, that’s good to hear! I haven’t seen any notices, but I wanted to be prepared just in case.

10

For anyone facing this, talking to a financial advisor or lawyer can help find ways to protect your pension.

11

Rowe said:
For anyone facing this, talking to a financial advisor or lawyer can help find ways to protect your pension.

Agreed. They could help you negotiate or set up a payment plan to avoid garnishment.

12

Federal pensions are generally included in garnishment programs, but private pensions aren’t usually affected. Still, best to check with an attorney.