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2w ago

450,000 Seniors Face Social Security Cuts as Federal Student Loan Collections Resume

Under the Treasury Offset Program, the Education Department now withholds up to 15% of benefits to recover defaulted loans.

Stock image/file photo: A Social Security card with U.S. Dollars.
A Social Security Administration (SSA) office in Washington, DC, March 26, 2025.
A 6 month old baby boy smiling, laying on a bed
Image

Overview

  • In May, the Education Department sent 30-day notices to 195,000 defaulted borrowers warning of impending Social Security offsets.
  • Under the Treasury Offset Program, up to 15% of monthly retirement benefits, or about $296 on a $1,976 check, can be withheld.
  • All 5.3 million federal student loan defaulters will receive wage garnishment notices before the end of summer 2025.
  • Borrowers can avoid offsets by restoring loans through rehabilitation, consolidation, deferment, forbearance, or enrolling in income-driven repayment plans.
  • The collections resumption follows the end of pandemic-era relief measures and marks a fiscal shift under the Trump administration to enforce full loan repayment.