SOCIAL SECURITY STUDENT BENEFITS
ISSUE BRIEF NUMBER IB81030
Education and Public Welfare Division
T H E L I B R A R Y OF C O N G R E S S .
CONGRESSIONAL RESEARCH SERVICE
MAJOR I S S U E S S Y S T E K
DATE ORIGINATED 02/25/81
DATE UPDATED 10/18/83
FOR ADDITIONAL INFORKATION CALL 287-5700
As part of his program for economic recovery President Reagan included a
proposal to discontinue social security benefits for 1 8 to 22-year-old
students attending college or vocational school.
Critics of the student
benefit believe that other federally funded educational assistance programs
which tailor the amount of aid provided to actual educational costs and
famiiy income should be relied upon to help finance the college educations of
students who are children of retired, disabled, and deceased workers.
Defenders of the student benefit
say that it is not just educational
assistance, but basic income support intended to replace a part of the lost
earnings of the parent upon which this student depended up until the time the
parent retired, became disabled, or died.
Both Houses of Congress approved a modified version of the President's
proposal a s part of the Omnibus Budget Reconciliation Act of 1981, Signed
into law (P.L. 97-35) on Aug. 1 3 , 1981.
BACKGROUND AND POLICY ANALYSIS
Under the Social Security Act, monthly
cash benefits are paid to the
children of a n insured worker when the worker retires, becomes
disabled, o r
8ies. The amount of the child's b e n e f i t . i s generally equal to 50% of the
Senefit paid to the retired or disabled worker himself and 75% of a full
worker's benefit in the case of a surviving child.
Benefits are somewhat
less for children i n large families due to the maximum family benefit lim,it,
which limits total family benefits to 150% to 188% of the worker's benefit.
Although different rules apply to disabled children, child beneficiaries
generally continue to receive benefits until they marry or reach age 18.
Under old law these benefits could continue even after age 1 8 and up until
age 22 a s long a s the beneficiary could establish that he was attending high
school, college, or vocational school on a full-time basis.
continue for several months beyond age 2 2 (until the end of the school term)
if the student had not yet completed his 4-year
on full-time school
continuation of child's benefits beyond age 18 based
attendance is what is commonly referred to a s the social security "student
The student beneficiary has not been required to show that he is pursuing
a degree or that his academic performance has been satisfactory in order to
remain eligible for benefits.
His benefits could continue during the summer
months or during any other period of non-attendance of 4 months or less if he
stated in advance his intention to return to school immediately after this
period or if in fact he did return to school.
If he said that he planned
return to school but did not actually do so, the benefits paid to him during
his months .of non-attendance were defined as overpayments and subject to
i-ecoupment under the rules of the Social Security Administration.
The 1939 Amendments to the original 1935 Social Security Act provided
"supplementaryl~benefits for the wives and "dependent" children of retired
and deceased workers.
All unmarried children were eligible for benefits
until their 16th birthday; 16- and 17-year-old children were eligible if they
were attending school full time.
In 1946 the student requirement w a s
In 1 9 5 6 the
droppea; all children were eligible until they - reached
children of disabled workers became eligible for social security benefits a t
the same time that benefits for disabled workers were created.
The 1965 Amendments to , t h e Social Security Act that established
Medicare program also provided for social security benefits to children of
retired, disabled, and deceased workers even after their 18th birthday and up
until their 22nd birthday as long as they attended school full time and did
In its report accompanying the 1965 legislation, the House Ways
and Means Committee offered the following explanation for the new provision:
The committee believes that a child over 1 8 who is
attending school full time is dependent just a s a child
under 1 8 or a disabled older child is dependent, and
that it is not realistic to stop such a child's benefit
at age 18. A child who cannot look to a father for support
(because the father has died, is disabled, or is retired)
is at a disadvantage in completing his education a s .
compared with the child who can look to his father for
Not on1.y may the child be prevented from
going to college by loss of parental support and loss of
his benefits; he may even be prevented from finishing
high school or going to a vocational school.
employers requiring more than a high school education as
a condition for employment, education beyond the high
school level has become almost a necessity in preparing
Providing benefits up to age 22 would mean
that for many children benefits could continue for the
time it takes to complete a 4-year college course.
The Senate Finance Committee report contained identical explanatory
language. Although these benefits came to be known a s "student benefits," i t
is clear from the legislative history that they were not primarily
as educational assistance per se, but to recognize the continuing dependency
of a child beyond the normal age of majority because he i s attending
Thus, the amount of the benefit payable was related only to the
amount of earnings lost due to the death, Cisability, or retirement of the
parent and not related to the actual costs incurred in attending school or to
the amount of other income available to the family.
In 1972 the student benefit provision was liberalized to permit benefits
beyond age 21 in order that a student working toward a n undergraduate degree
at a 4-year college could complete the current semester or quarter before his
social security benefits were terminated.
2eagan Administration Proposal
Both the Ford and Carter Administrations recommended cutbacks in the
student benefit program, but neither proposal would have re,duced benefits to
any student already receiving benefits.
Both prior Administrations proposed
no change i n benefits for high school students, but a 4-year phasing
benefits for a l l postsecondary students.
The Reagan proposal would also have
left benefits to high school students unchanged, but it went further than the
Ford and Carter proposals did in cutting back benefits to postsecondary
students. The Reagan proposal would have reduced the amount of monthly cash
to current student beneficiaries who attend college o r
vocational school by 25% each year for the next 4 years and allowed no new
post-secondary student beneficiaries to come on the rolls after Aug. 1 , 1981.
The Reagan Administration expected to save $2.2 billion per year in social
security benefit costs when the proposal was fully effective i n FY85.
The Administration argued that social security student benefits duplicate
other federally funded education assistance programs for college students and
should therefore be eliminated.
It maintained that assistance for students
benefit in a social insurance scheme, since social
insurance i s generally intended to insure against unavoidable risks and not
to permit individuals the option of attending school beyond age 18.
Administration also pointed out that the availability of federally funded
educational assistance other than social security has increased dramatically
since 1965 (from less than $300 million in 1965 to about $7 billion in FY811,
and that those forms of assistance a r e preferable to social security in
providing assistance to students because they take into account actual costs
of attending school and the amount of other income to the family. Given that
the student benefit i s "marginal" and nduplicativew of other programs, the
Reagan Administration is anxious to abolish it in order to reduce the
financial difficulties of the social security trust funds and to help reduce
total Federal spending as part of the President's
Congressional Action in 1981
In order to help meet their FY82 budget reconciliation targets, both the
Senate Finance Committee and the House Ways and Means Committee voted in May
1981 to phase out social securi'ty benefits, but each modified
The Finance Committee voted to stop enrolling new
postsecondary beneficiaries 1 year later than the Administration prcposed,
that is, to make the 1981-82 school year the final year in Which
students would be eligible.
The Finance Committee further voted to eliminate
summer benefits (May through August)
for students left in the expiring
program, beginning in 1982; to reduce student benefits by
starting in September 1982, to end all student benefits effective in May
1985; and to pay no cost-of-living benefit increases to postsecondary
students after ~ u l y1981.
entitled to social
Individuals 18 to 21 years old who became newly
security benefits due to the death, disability or retirement of a parent
after August 1981 could receive benefits a s post-secondary students, but only
through July 1982.
The Ways and Means Committee voted
to stop enrolling postsecondary
students after December 1982, but to freeze benefits a t their July 1981 level
for those left in the expiring program; and to eliminate summer benefits
(June through August) for those not enrolled in a full-time summer "school
Further, the Senate Finance Committee voted to stop a child's benefit
after his 19th birthday, even if he were still i n high school; but the House
Ways and Means Committee voted to continue benefits for children over 18
until completion of their elementary or secondary schooling.
These decisions were reported i n committee press
#81-10, May 6, 1981; Ways and Keans, May 20, 1981.
Just prior to the July 4 recess, both the House and Senate approved F Y 8 2
budget reconciliation bills.
The Senate-passed bill included the provision
to phase out social security student benefits just a s it has been voted o n i n
the Finance Committee and in the Budget Committee
(reported to the full
Senate a s S. 1377, the Omnibus Reconciliation Act of 1981).
the Ways and Means Committee provision was brought to the floor as part of
the House Budget Committee's reconciliation package (H.R. 3982), the student
benefit was among those provisions modified by
the amendments offered by
Representative Latta (the so-called Gramm-Latta 1 1 alternative).
amendment deleted the Ways and Means provision and substituted language
identical to that Which had passed the Senate the day before
(June 25)Since the Gramm-Latta substitute passed the House on June 26 by a 217-211
margin, there were no differences between the House and Senate student
benefit provisions to be resolved by the conference committee.
Conferees appointed to resolve the differences between
the House and
Senate budget bills reached agreement in late July 1981, and the Omnibus
Reconciliation Act of 1981 received final approval by both bodies on July 3 1 ,
It was signed into l a w (P.L. 97-35) by the President on Aug. 1 3 , 1981Expected savings from the student benefit
offsetting costs) a r e a s follows:
(in millions of dollars)
Summary of the Final Provision
The final provision a s signed into law
(1) With respect to high school students, benefits
may continue Only until the 19th birthday as
long a s the beneficiary i s still a full-time
student i n elementary or secondary school. This
new rule took effect a s of August 1982.
(2) With respect to post-secondary (college or
vocational school) students, students who
became entitled to child-'s benefits- by August
1981 and who were attending post-secondary
school full-time by April 1982 may continue to
receive student benefits if they continue to
qualify under all the old rules.
benefits will be phased out a s follows:
(a) Beginning i n 1982, no more benefits will be
paid for May, June, July, or August, whether or
not the student is attending summer classes.
(b) No more cost-of-living increases will be made after
(c) In September 1982, and again in September 1983 and
September 1984, the benefit will be reduced by
25% of the August 1981 benefit amount.
will be paid after April 1985.
Post-secondary students who failed to meet one of the requirements for the
phased out benefits (because they became entitied to social security benefits
after August 1981 or because they were not i n post-secondary school full-time
by April 1982) could receive student benefits only through July 1982.
benefits payable to these students were not subject to the reductions
described i n (a), (b), and (c) above.
According to Social Security Administration
estimates, at the end o f
September 1982, about 650,000 students were affected by the new provision.
About 360,000 postsecondary students had their benefits reduced under the
phaseout rules; about 250,000 postsecondary
students who would have been
eligible under old l a w were receiving no benefits at all (because they failed
to qualify for the phaseout group); and a s many as 40,000 elementary o r high
school students 1 9 or older who would have been eligible under old law were
not be receiving benefits.
Most of the 40,000 students were high
The number of postsecondary students affected by the provision over
the next 5 years has been estimated by SSA a s follows:
Sept. 8 2
360 , 0 0 0
After enactment of P.L. 97-35, various Members of Congress accused the
Social Security Administration of failing to provide adequate notice of the
change to student beneficiaries and potential student beneficiaries.
were particularly concerned about notification of child beneficiaries who
were expecting to graduate from high school in the spring of 1982 so that
they could accelerate their enrollment in postsecondary school in order to
meet the May 1 , 1982 deadline for full-time attendance.
There seemed to be
some willingness on the part of high school and college administrators to
school graduation or flexible
facilitate these arrangements
scheduling so that students could attend
simultaneously during the spring.
SSA said they did not believe it was necessary for them
to inform these
2otential beneficiaries because the intent of Congress in setting the May 1,
1982, deadline was to allow students graduating from high school in the
spring of 1981 ample time to begin postsecondary
school and still remain
eligible for a t least the phasing out benefits. They argued that Congress
did not intend to prompt a mass exodus of high school seniors from high
school into college in the spring of 1982.
The legislation and the committee
reports are silent on the matter of notification.
However, the senate
Finance Committee discussions (where the May 1 deadline was added to the
provision) indicated that the committee intended to grandfather in Only the
not students graduating one year
1980-1981 class of high school seniors
1 2 , 1982 SSA notified by mail all student
Between Feb. 26 and Mar.
beneficiaries on the rolls at that time.
And, a s child beneficiaries
approach their 18th birthdays, SSA wili
inform those who plan
college of the new rules. On Aug. 2 0 , 1982, Senator Levin proposed, a s a
floor amendment to H.R. 6863, a supplemental appropriations bill, that the
deadline for the student benefit phaseout be extended from May to October
Senator L e v i n f s amendment, Which also would have made changes i n the
treatment of uncashed social security checks, was defeated on a 47-42 vote.
Student Benefits to Survivors of Military Personnel
Although social security benefits for students have not been restored,
Congress took action in 1982 to restore the equivalent of student benefits to
orphans of servicemen who died on active duty before Aug. 1 3 , i981, or who
died later as a result . o f a service-connected disability incurred or
aggravated before Aug. 13, 1981. Payment comes not from the social security
trust funds but from the Department of Defense.
This provision was added, by a vote of 94-1, to a continuing resolution,
H.J.Res. 6 3 1 , passed on Dec. 1 6 , 1982.
Congress responded to the argument
that it was wrong to have denied student benefits to survivors of military
personnel because social security benefits formed an important part of the
package of pay and benefits which were offered to servicemen to encourage
them to join and remain i n the military.
Indeed, Defense Department
to 'recruits and new officers
protection afforded their families by the social security system if they
should die on active duty or later as a result of a service-connected
Many testified that the promised availibility of social security
benefits Constituted a commitment upon which many military families relied i n
their estate planning.
A student benefit comparable to the social security
student benefit was
restored to eligible post-secondary students between the ages of 18 and 22 a t
the level paid prior to the enactment of the 1981 Reconciliation Act.
Benefits were not retroactive but began with the first month after enactment,
and would be adjusted in the future by
the average of the adjustments
provicied by the Veterans Administration educational assistance program.
The authority to designate the appropriate Federal agency to administer
the benefits was left to the President,
Administration was charged with providing to the head of such agency the
On July 24, 1983, the
information required to administer the new program.
President issued an executive order designating-the Veterans Administration
as the administrator of the program.
Omnibus Budget Reconciliation Act of 1981.
Included a provision
210) that eliminates benefits to new postsecondary students a g e 18-21 who
re full-time students in college or vocational school and allows benefits to
lementary and secondary school students only up to age 1 9 , effective with
benefits payable for August 1982.
Certain students who begin postsecondary
school before May 1 9 8 2 may continue to receive benefits up until age 22;
however, these benefits will be reduced 25% each year beginning in September
of 1982 and no cost of living adjustments or summer month benefits
through August) Will be paid after 1981.
Introduced June 19, 1981 as H.R.
3964 on behalf of the Budget
3982 (Jones), a clean bill replacing H.R.
After being amended (Latta amendments),
passed House June 26.
Conference report passed both houses on July 31.
Signed into l a w Aug.
Committee on Education and Labor,
Subcommittee on Elementary, Secondary, and Vocational Education
and Subcommittee on Postsecondary Education.
student benefit cuts.
Hearings, 97th Congress, 2d session.
Feb. 3 , 1982.
Washington, U.S. Govt. Print. Off., 1982.
Committee on Ways and Means, Subcommittee
on Social Security.
Implementation of 1981 Reconciliation
Act repeal of Social Security student benefit.
97th Congress, 2 6 session. Feb. 5, 1982.
Washington, U.S. Govt. Print. Off., 1982.
Committee on Ways and Means,
Subcommittee on Oversight.
Review of social
security student benefit program.
Hearing, 96th Congress,
Feb. 9 , 1979. Washington, U.S. Govt. Print.
AND CONGRESSIONAL DOCUMENTS
Congressional Budget Office.
Social security benefits for
students, Washington, May 1977.
General Accounting Office.
Social Security benefits for
postsecondary schools should be discontinued; report to the
Congress by the Comptroller General of the United States.
[washington] 1979 (HRD 79-108, Aug. 30,'1979.)
ADDITIONAL REFERENCE SOURCES
C h a r a c t e r i s t i c s of s t u d e n t O A S D I b e n e f i c i a r i e s i n 1 9 7 3 :
S o c i a l s e c u r i t y b u l l e t i n , N o v e m b e r 1976.
Student OASDI beneficiaries:
program utilization and educational
S o c i a l s e c u r i t y b u l l e t i n , S e p t e m b e r 1978.