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3w ago

Education Department Pauses Social Security Garnishments for Student Loan Defaulters

The department paused the garnishment to allow time for proactive outreach to defaulted borrowers ahead of planned wage garnishments this summer.

Stock image/file photo: A Social Security card with U.S. Dollars.
A Social Security Administration (SSA) office in Washington, DC, March 26, 2025.
Education Secretary Linda McMahon speaks during a Senate Appropriations hearing, Tuesday, June 3, 2025, on Capitol Hill in Washington. (AP Photo/Julia Demaree Nikhinson)
Education Secretary Linda McMahon laughs before a Senate Appropriations hearing, Tuesday, June 3, 2025, on Capitol Hill in Washington. (AP Photo/Julia Demaree Nikhinson)

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.