Groups at odds over unpaid student loans.

Seven billion dollars isn't chump change. That's how much the U.S. Department of Education claims it is owed on defaulted student loans--loans never paid back because of a variety of circumstances.

But consumer advocates and lawmakers are at odds over just how far the DOE can go to retrieve the money it is owed.

One case is that of James Lockhart, a disabled man in his 60s who defaulted on his loans more than a decade ago, but is now suing the government to prevent it from withholding a portion of his Social Security checks.

Public Citizen, a Washington, D.C.-based non-profit consumer advocacy organization that is representing Lockhart, claims that he is solely dependent on his monthly Social Security payments.

The case has made its way to the U.S. Supreme Court where, this November, justices will decide whether the government can legally deduct debts owed on student loans more than 10 years in default from Social Security checks.

At the crux of the argument are three laws enacted and amended by Congress over the years that are being read together, but have been interpreted differently by previous courts.

The Social Security Act of 1935 prohibits payments from being withheld to pay off debts. The Higher Education Assistance Act of 1965 (HEA), which was amended in 1991, put a 10-year time limit on the government's ability to pursue unpaid loans. And Congress enacted the Debt Collection Improvement Act of 1996 (DCIA) as an amendment to the Debt Collection Act of 1982 (DCA), allowing the government to pursue "administrative offsets," or Social Security payments--but only within a 10-year statute of limitation.

For Brian Wolfman, director of Public Citizen's litigation group, the only question is whether Lockhart's loans have remained unpaid for more than 10 years.

Wolfman thinks Lockhart will prevail before the Supreme Court because "there has not been an express reference that is necessary to override the 1D-year statute of limitation."

If Lockhart loses his case, "even if the student roan is 100 years past due," says Wolfman, the government will be able to retrieve the money by seizing Social Security payments, which is currently illegal under the Social Security Act.

A spokesperson for the U.S. Department of Education would not comment on pending lawsuits. The case is not without precedent, however. In Lee v. Dept. of Ed. (2004), another case where a defaulter sued the government to keep it from seizing her federal payments, the Eighth Circuit Appellate Court ruled that if Congress had wanted Social Security payments to be seized it would have originally written that into the amended HEA in 1991.

"Had Congress intended to limit the disabling provision to allow the government unlimited offset opportunities for the collection of delinquent student loans," the court ruled, "it would have done so explicitly. In the absence of Congressional language authorizing application of HEA to Social Security offsets, the district court concluded that the specific limitations in DCIA prevail."

Daren Bakst, president of the Council on Law in Higher Education, says that if the stiff-pending reauthorization of the Higher Education Act includes an amendment allowing the Department of Education to seize Social Security payments, then that would turn the tables against Lockhart.

"But if Congress doesn't do anything [to change the HEA], that reflects Congress' view on the issue," Bakst says.

Wolfman says, "We think that if Congress said 10 years is the limit, then it's enough time. Paying back your debts is important, but having statutes of limitation is also important."