Overview
- The Education Department hasn’t offset any Social Security payments since May 5 and has suspended future garnishments for defaulted federal student loans.
- About 450,000 borrowers aged 62 and older in default were at risk of losing up to 15% of their benefits under the Treasury Offset Program before the pause.
- Wage garnishment is set to resume later this summer, with employers required to withhold up to 15% of defaulted borrowers’ disposable pay.
- In the coming weeks, the department will conduct proactive outreach to defaulted borrowers to inform them about affordable repayment options and pathways to good standing.
- The pause comes in connection with broader plans to overhaul student loan programs, including proposals to reduce income-driven repayment options.