Are you on the list? Trump’s policy change poised to hit social security payments for 2 million Americans
Trump’s New Social Security Policy Could Affect 2 Million Americans — Are You at Risk?- For millions of Americans, Social Security is more than a monthly deposit — it’s a financial lifeline. According to Gallup, nearly 80% to 90% of retirees say they depend on Social Security to cover at least part of their monthly expenses. But for about 2 million beneficiaries, that critical income could now be reduced due to two new Trump administration policies aimed at collecting unpaid debts.
Why are Social Security checks being reduced under Trump’s new policies?
Under President Donald Trump, the federal government is resuming two efforts that could shrink monthly Social Security payments for certain groups:
- Garnishing benefits from retirees and disabled workers with defaulted federal student loans
- Clawing back overpaid benefits from more than a million recipients
Both measures are set to begin enforcement again starting June 2025, after years of pandemic-era pauses and soft collection approaches.
How many older Americans are behind on their student loans?
Believe it or not, a growing number of senior citizens still carry federal student debt. As of April 2025, the U.S. Department of Education reported that 3.59 million borrowers aged 60 and up owe part of the country’s $1.6 trillion in student loans.
More concerning: a January 2025 Consumer Financial Protection Bureau report estimates that 452,000 borrowers aged 62 or older are in default — and many of them receive Social Security.
Starting this summer, those in default could see up to 15% of their monthly Social Security benefit garnished until they’re no longer delinquent. That includes not just retired workers but also people on disability and survivor benefits.
Here’s an example:
If you receive $1,500 per month, the Department of Education can now deduct up to $225 monthly. And this 15% is calculated before your Medicare Part B premium is deducted.
How is the Trump administration changing warning procedures?
Before COVID-19, affected recipients got about 65 days’ notice before garnishment started. Under Trump’s updated policy, the notice period is just 30 days.
There is one limit in place: You must be left with at least $750 per month after garnishment. So if your Social Security check is $800, the government can only take $50, even if 15% would be more.
What’s happening with Social Security overpayment clawbacks?
In a separate move, the Social Security Administration (SSA) is stepping up efforts to recover overpayments — benefits that were sent out in error. Sometimes the fault lies with the SSA. Other times, it’s due to unreported changes in income, disability status, or eligibility.
During fiscal year 2022, the SSA overpaid over 1 million people, according to former acting SSA Commissioner Kilolo Kijakazi. Another 980,000 recipients were overpaid in FY 2023.
Under President Biden, clawbacks were capped at 10% of a beneficiary’s check. But in March 2025, the Trump administration initially signaled a return to the pre-pandemic 100% clawback, meaning entire Social Security checks could be withheld.
After public backlash, they revised the plan in late April, settling instead on a 50% garnishment rate — still a big jump from Biden’s 10%.
If you’re part of this group, you could now lose half your monthly benefit until your debt is fully repaid. That could be especially painful for the estimated 1.5 million Americans still owing money.
Who’s most likely to be impacted by these Social Security reductions?
Combining the two groups — delinquent student loan borrowers (about 452,000) and those who were overpaid by the SSA (around 1.5 million) — roughly 2 million Americans are at risk of seeing their Social Security checks reduced.
And many may not be aware until the garnishment letters arrive — with just 30 days to prepare or contest the deduction.
These policies affect a broad range of beneficiaries, including:
- Retirees
- People with disabilities
- Widows or survivors receiving benefits
How much money will these clawbacks and garnishments actually recover?
The SSA believes that collecting all outstanding overpayments could save about $7 billion over the next 10 years. But for individuals on tight budgets, even small reductions can be devastating — especially with inflation and rising healthcare costs.
The Department of Education hasn’t collected on student loans since March 2020, but now it’s aiming to restart recovery from older borrowers, even as many struggle with retirement expenses.
What should you do if you’re affected?
If you’ve received a warning notice or suspect you may be impacted:
- Contact the SSA or Department of Education immediately
- Request a repayment plan or hardship waiver if eligible
- Check your benefit amounts and overpayment status
You can also seek help through non-profit financial counseling services, especially if you’re unsure why you’re being garnished.
What does this mean for your future benefits?
For those relying on Social Security income, even a modest garnishment can feel like a major loss. As President Trump pushes ahead with these debt collection policies, about 2 million people stand to lose part of their monthly checks.
Whether it’s from unpaid student loans or past overpayments, the government is taking a more aggressive approach. Staying informed, checking your benefit statements, and responding quickly to notices will be key in managing the changes ahead.
FAQs:
Q1: What is Trump’s Social Security garnishment policy in 2025?
It allows up to 15% of monthly benefits to be taken from seniors with defaulted federal student loans.
Q2: How is the SSA collecting overpayments under Trump’s new rule?
The SSA can now garnish 50% of a beneficiary’s Social Security check to recover past overpayments.