FPANJ Warns of the Cost of College Debt on Social Security

While Financial Planners have been advocating for smarter legislation on student loan programs for years, the news is finally spotlighting a concern over its impact on Social Security income if debts aren't paid.
MONTCLAIR, N.J. - Jan. 5, 2017 - PRLog -- The Financial Planning Association of New Jersey (FPANJ) has long held advocacy positions in Trenton that have encouraged careful decision making with regard to student loan programs. However, the impacts haven't been well publicized until recently, when the Wall Street Journal ran a piece on how Social Security checks can be reduces if debts for college aren't paid.

"Our efforts in public financial education - and in the Capitol - have included a message to stop the borrowing before it happens," explained John Crosby, CFP®, ChFC, CAS, CLTC, CRPC®, and Advocacy Chairperson for FPANJ. "The best solution to this issue is always to make an educated decision before you choose to borrow, where to borrow, and understand the types of student loans are available."

The reality is that for student loans and other non-tax debts, the government can garnish wages or suspend tax refunds for anyon(e who fails to pay their student loans. They can take 15 percent of your Social Security check as long as the remaining balance doesn't drop below $750. There is no statute of limitations on student loan debt, so it doesn't matter how
long ago the debt occurred.

Crosby noted that lawmakers have an opportunity to protect Social Security in a bill (HR4988 Social Security Benefits Restoration Act) presented by Rep. Patrick Murphy (D-FL) in April of 2016. However, this bill is still awaiting a co-sponsor, along with similar proposals from 2015.

The best way to protect yourself is to become knowledgeable, said Crosby.

"Financial Literary programs can address this topic to help students and/or parents understand the importance of higher education and the financial responsibilities that come with it. Partnering with a Certified Financial Planner(TM) is the best course in understanding your options, whether you plan on paying for college or taking out loans.

"Often a candid discussion among a planner, parents and the student can help avoid serious financial consequences down the road. And really, that is what FPANJ and its members are here to do."

If people don't have a Financial Planner, Crosby recommended a tool found on the FPANJ website (FPANJ.org) at the top of the page. "Find A Local Planner" helps consumers look for a specialist in the area of college planning, and within their geographic area.

View the WSJ article here: http://www.wsj.com/articles/social-security-checks-are-be...?.

ABOUT FPA of New Jersey and FPA:

Financial Planning Association of New Jersey is part of The Financial Planning Association® (FPA®). FPA connects those who need, support and deliver professional financial planning. FPA believes that everyone is entitled to objective advice from a competent, ethical financial planner to make smart financial decisions. FPA members demonstrate and support a professional commitment to education and a client-centered financial planning process. Working in alliance with academic leaders, legislative and regulatory bodies, financial services firms and consumer interest organizations, FPA is the community that fosters the value of financial planning, and advances the practice and profession of financial planning.

The Financial Planning Association® (FPA®) is the largest membership organization for personal financial planning experts in the U.S. and includes professionals from all backgrounds and business models. FPA members adhere to the highest standards of professional competence, ethical conduct and clear, complete disclosure to those they serve. Based in Denver, Colo., FPA works in alliance with academic leaders, legislative and regulatory bodies, financial services firms and consumer interest organizations. For more information about FPA, visit www.OneFPA.org or call 800.322.4237.For more information about FPA of New Jersey, visit www.fpanj.org.


John J. Crosby, CFP®, ChFC, CAS, CLTC, CRPC®
Individual Financial Services, LLC
4 Doris Lane
Middletown, NJ 07748
732-706-0912 - phone
732-208-5366 - cell


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