How to Manage Old, Unpaid Student Loans

The Student Loan Ranger often receives questions from readers with older federal student loan debt. Since there is no statute of limitations on federal student loans, borrowers are sometimes surprised to find that they still owe money on federal student loans that are years or decades old.

If you have federal student loans in default, the federal government can garnish your wages, tax refunds or Social Security payments at any time to collect on the debt — even if you were previously unaware that you still needed to repay. That’s why it’s important that you do your best to stay on top of your loans.

[READ: Student Loan Default: What to Know.]

If you are ever struggling to make payments, the best thing you can do is reach out to your student loan servicer as soon as possible for help to avoid the consequences of default.

That said, it’s never too late to resolve an old debt and get your student loans out of default. Here are two questions on the subject that we recently received from readers.

I have two old student loans from 1981 and 1982. I am calculating my retirement and from what I read they can take my Social Security. How can I look up the loans and see what I owe? –B.G.

If you have a defaulted federal student loan, no matter how old the debt is, the Treasury Department has the authority to withhold money from your federal income tax refunds and Social Security benefits to collect the amount that you owe. This is called Treasury offset.

[Read What to Do When Your Tax Refund Is Seized for Student Loan Default.]

It’s important to know that only up to 15% of your Social Security benefits can be subject to Treasury offset, and your remaining net benefit can’t be less than $750 per month. Federal law also requires that you be notified in writing 65 days prior to any offset. This notice will be sent to your last known address, and you could receive only one notification.

You have the right to request a review of the situation to prevent or interrupt an offset. For example, if your Social Security disability benefits are being withheld, that will be suspended if the Social Security Administration, or SSA, determines that you are permanently disabled with no expectation of medical improvement. But if the SSA converts your disability benefits to retirement benefits later, withholding of your Social Security benefits could resume without notice.

It’s important not to avoid the issue. If you are planning for retirement and suspect you may be subject to Treasury offset, the best thing that you can do is resolve your default. This is because any offsets that you are subject to will continue until your debt is paid or the default status is resolved. If your defaulted student loan has been placed with a collection agency, you’re on the hook for paying those costs as well.

You do not have to pay the loan off in full to avoid Treasury offset. You just need to resolve the default, usually either by rehabilitating or consolidating the loan. You can read more about these options and how to apply at

You can also find your old federal student loans and look up how much you owe by logging in to For help with a defaulted loan, contact the loan holder. You can find out who that is by selecting “view loan servicer details.”

[READ: When Getting Your Loans Out of Default Is a Bad Idea.]

I’m trying to get a default clearance letter for an old Perkins loan. The loan was originated in 1982 and it went into default, but I believe has since been paid off. I am currently trying to register for classes at a new institution, but this old Perkins loan is holding up my financial aid because it is still showing up as in default. What can I do to address this? –L.S.

Although Congress stopped funding the federal Perkins loan program in 2017, many borrowers are still repaying loans that were made prior to its termination. Perkins loans are different than most other federal student loans because borrowers would typically receive some of the loan money from a college or university and then repay the school or a servicer that worked with the school.

In comparison, most federal student loans are made and held by the Department of Education, and borrowers work with its contracted student loan servicers to repay their loans.

This difference can make it more complicated to track down information about your Perkins loan, especially if it is an older loan. A good first step is to contact the school where you received it. Your school may be the servicer for that loan, or it may be able to direct you to the entity that services or holds the loan.

Either your school or the loan servicer should be able to provide the amount that you owe, the required monthly payment amount and related records. If you have difficulty getting information from the school, for example if the college has closed, you can check The loan may have been assigned to the Education Department.

If you find that your Perkins loan is still unpaid and in default, you can regain access to federal financial aid by rehabilitating the loan. You can rehabilitate a defaulted Perkins loan by making a full monthly payment within 20 days of the due date for nine consecutive months. Note, however, that you can do this only once; if you default on the loan again, you can’t rehabilitate it again. The loan holder determines your required monthly payment amount.

If you are unable to resolve the issue with your school directly and you wish to dispute their records, you may file a claim with the Department of Education’s Federal Student Aid Ombudsman Group at or by calling 877-557-2575.

More from U.S. News

Why You Should Look at a College’s Student Loan Default Rate

What to Know About Delinquent Student Loans

How to Buy a Home When You Have Defaulted Student Loans

How to Manage Old, Unpaid Student Loans originally appeared on

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