Beginning next month, Social Security recipients who are behind on their federal student loans will face garnishment of up to 15% of their monthly benefits. This move comes as the Trump administration reinstates the Treasury Offset Program (TOP), a federal debt collection mechanism that allows the government to withhold funds from sources like tax refunds, federal salaries, and Social Security payments to collect outstanding debts. The resumption of TOP marks a significant shift after a years-long pause on such collections during the COVID-19 pandemic.
TOP Resumes After Pandemic Pause, Millions of Older Borrowers Face Imminent Benefit Garnishment
The Treasury Offset Program had been suspended at the onset of the pandemic and remained inactive for student loan borrowers in default throughout the Biden administration. With the return of TOP, the Department of Education (DOE) began sending 30-day advance notices starting May 5 to approximately 195,000 borrowers. These notifications serve as a warning that garnishment will begin soon. The first wave of garnished Social Security checks is expected to hit in early June, after the notice period expires.
Social Security Garnishment Set to Resume for Defaulted Student Loans, Threatening Millions of SeniorsThe DOE has indicated that by the end of the summer, all 5.3 million borrowers with defaulted student loans will receive a notice that their wages or benefits may be garnished. Among them, nearly 2.9 million are individuals aged 62 or older. Of these, around 452,000 are at risk of having their Social Security benefits forcibly reduced, according to the Consumer Financial Protection Bureau. This large-scale resumption of collections highlights the financial vulnerability of older Americans who still carry student debt.
Forced Garnishment Threatens Seniors’ Security, But Relief Options Are Available for Some Borrowers
The garnishment of Social Security benefits, especially among older or disabled individuals, raises concerns about deepening poverty among retirees. The CFPB report warned that such forced collections could undermine the very safety net that Social Security is meant to provide. Even though the offset cannot reduce monthly benefit checks below $750, this threshold may still be too low to sustain basic living expenses for many seniors, particularly in high-cost areas.
Borrowers who receive a TOP notice do have some recourse. The DOE and Treasury Department are providing information about how borrowers can challenge the garnishment if they can demonstrate financial hardship or are pursuing a loan discharge. The 15% garnishment applies to gross Social Security benefits, covering both retirement and disability payments. Experts recommend that affected borrowers act quickly and seek assistance if they believe they qualify for an exemption or are already engaged in discharge proceedings.
