August 18, 2026

Student Debt Could Take a Chunk Out of Older Americans’ Social Security — Sanders, Warren Back New Bill to Stop It

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Older Americans and borrowers with disabilities who default on federal student loans could get new protection from having their Social Security benefits garnished under legislation introduced Monday by Democratic lawmakers.

The bill would prevent the Treasury Department from withholding Social Security payments from those borrowers, including payments from Social Security Disability Insurance, Business Insider reported Monday.

Bill Targets Social Security Garnishment

Sen. Bernie Sanders (I-Vt.), Sen. Elizabeth Warren (D-Mass.) and Sen. Ed Markey (D-Mass.) introduced the legislation as student-loan defaults remain elevated. A fact sheet reviewed by Business Insider said the bill would prohibit the Treasury Department from seizing Social Security payments from older borrowers and borrowers with disabilities, describing the measure as protection against “unnecessary forced collections,” according to the report.

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Sanders said in a statement, “In the richest country in the history of the world, no senior should have their Social Security payments taken away from them to pay back student debt. This is especially true when seniors throughout the country already cannot afford the skyrocketing price of healthcare, prescription drugs, groceries and housing. Congress must pass this legislation,” according to the report.

Under current federal rules, the Treasury Department can withhold up to 15% of a defaulted federal student-loan borrower’s Social Security benefits. That collection process is currently paused, and the administration has not said when it will resume.

Defaults Are Rising

More than 9 million borrowers were in default as of March, according to the latest U.S. Department of Education data. A federal student loan generally enters default after a borrower misses payments for 270 days.

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The Federal Reserve Bank of New York’s latest household debt data also showed student-loan delinquencies at 10.6% in the second quarter, up from 10.3% in the first quarter. The New York Fed has said student-loan delinquencies have been returning toward pre-pandemic levels.

Older borrowers face particular exposure. Federal Reserve data previously showed borrowers age 50 and older were increasingly represented among those falling behind on student loans, with the average age of borrowers in default rising.

The issue comes as lawmakers debate broader Social Security reforms. Americans have shown strong opposition to broad benefit cuts and higher payroll taxes, while showing more support for reducing benefits for wealthier retirees.

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Social Security Faces Its Own Funding Pressure

The legislation also arrives as Social Security faces a separate long-term funding problem. Its main retirement trust fund is projected to run out of reserves in the fourth quarter of 2032. Without congressional action, incoming revenue would cover about 78% of scheduled benefits.

Lawmakers have proposed very different solutions. One approach would invest $1.5 trillion in a separate fund to help cover future liabilities, while other proposals have focused on higher taxes or changes to benefits.

For older borrowers already depending on Social Security, the new legislation seeks to prevent student debt from creating another reduction in those payments.

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