New bill could protect Social Security benefits from student loan garnishment
Millions of Americans who rely on Social Security could be affected by a new proposal in Congress aimed at preventing the federal government from withholding retirement and disability benefits to collect unpaid student loan debt.
Sen. Bernie Sanders announced on August 17 that he plans to introduce the Stop Social Security Garnishment Act of 2026, a bill that would prohibit the government from garnishing Social Security payments from older adults and people with disabilities who have defaulted on federal student loans.
The proposal is being backed by Sens. Elizabeth Warren and Ed Markey, both Democrats from Massachusetts. Sanders is expected to formally introduce the legislation when the Senate returns from its August recess.
What bernie sanders wants to change
The legislation would target one of the federal government’s tools for collecting defaulted student loan debt.
Under the proposal, Social Security retirement benefits and Social Security Disability Insurance payments could not be seized to repay federal student loans.
Sanders argues that older Americans should not lose part of their monthly income because of student debt, particularly when many retirees depend heavily on Social Security to pay for basic expenses such as housing, groceries, health care and prescriptions.
His announcement comes as the number of borrowers in default has climbed sharply. Sanders’ office says more than 9 million Americans are currently in default on their student loans, representing nearly one in four federal student loan borrowers.
How much could be taken from a social security check?
Current federal rules allow the government to use the Treasury Offset Program to recover certain defaulted federal debts.
For qualifying defaulted student loans, the government can generally withhold up to 15% of a monthly Social Security benefit.
There is also a $750 monthly protection floor under the current rules, meaning the offset cannot reduce a beneficiary’s payment below that amount. That threshold was established decades ago and has not been adjusted for inflation.
For someone receiving $1,400 a month in Social Security, for example, a 15% offset would amount to $210.
That reduction could be significant for retirees who have little or no income outside their Social Security benefits.
Hundreds of thousands of older borrowers could be affected
The issue is particularly important for older Americans carrying federal student debt.
An estimate from the Consumer Financial Protection Bureau cited in recent coverage indicates that roughly 452,000 borrowers age 62 and older have defaulted federal student loans and are likely receiving Social Security benefits.
The financial consequences can be especially serious for people living on fixed incomes.
A 2025 CFPB report found that more than one-third of Social Security recipients with student loans rely heavily on those benefits. Sanders’ office also cited research indicating that some beneficiaries affected by previous garnishments reported skipping medical care or prescriptions because of the resulting loss of income.
Why the issue is resurfacing now
The proposal comes as the federal student loan system undergoes another major transition.
The government has paused certain involuntary collection measures, including some garnishments, while new repayment policies are being implemented. The Repayment Assistance Plan (RAP) began rolling out on July 1, 2026, adding another layer of change for borrowers who are struggling to repay their loans.
However, the current pause does not mean that the underlying debt has disappeared.
If collection measures resume under the existing rules, borrowers with qualifying loans in default could once again face involuntary collection actions, including the potential withholding of certain federal benefits.
That possibility is one of the reasons Sanders is pushing for a permanent legislative change rather than relying on a temporary administrative pause.
The proposal is not yet law
One detail is especially important for Social Security recipients and student loan borrowers: Sanders’ proposal is not currently law.
The senator has announced the legislation, but Congress would still have to consider and approve it before it could change federal collection rules.
The bill’s supporters want to permanently prevent the government from using Social Security and Social Security Disability Insurance payments to collect defaulted federal student loan debt.
Until Congress acts, the existing federal rules remain relevant to borrowers whose loans are in default.