Student debt crisis: Social Security recipients could lose benefits
Social Security recipients with defaulted student loans may soon see their monthly checks reduced, as the federal government resumes aggressive collection efforts.
The Trump administration has reactivated Treasury offsets on overdue federal education debt—and that means garnishments could begin as early as June 2025.
Social Security recipients face garnishment risk
More than 450,000 Americans age 62 and older are in default on federal student loans. If they’re receiving Social Security, they may soon have up to 15% of their monthly benefits garnished.
The offset applies to all types of Social Security income, including retirement and disability benefits. However, recipients must be left with at least $750 per month after the garnishment is applied.
“The 15% is calculated from the gross benefit amount—before Medicare premiums or other deductions,” said higher education expert Mark Kantrowitz.
Garnishment notices may come with little warning
Borrowers used to receive a 65-day notice before benefit offsets began. That window may be shorter now. Officials say notices may have already been sent before the pandemic pause, and are not being reissued for those previously notified.
Still, federal law requires at least a 30-day warning, typically sent to a borrower’s last known address. If you’re unsure whether you’re in default, contact your loan servicer or update your contact information immediately.
Can you challenge the garnishment?
Yes. If you receive a notice about Social Security benefit garnishment, you can:
- Request a hardship exemption
- Submit documentation of a pending loan discharge
- Dispute the offset if you believe it’s in error
Consumer advocates urge borrowers not to ignore these letters. “Don’t panic, but take action quickly,” said Nancy Nierman of the Education Debt Consumer Assistance Program.
How to stop Social Security offsets
The only guaranteed way to stop garnishment is to get out of default. You can do this by:
- Rehabilitating your loan through a series of on-time, reduced payments
- Consolidating into a new federal loan and enrolling in an income-driven repayment (IDR) plan
If Social Security is your only income, your IDR plan payment may be $0, which would bring your loan current without monthly payments.
“You can avoid garnishment even with no ability to pay, as long as you take action,” said Betsy Mayotte of The Institute of Student Loan Advisors.
Student loan debt among older people is growing
Federal data shows 2.9 million Americans aged 62+ now hold student debt—a 71% increase since 2017. Many borrowed later in life to help family members attend college, while others are still paying off loans from their own education.
With Social Security acting as a lifeline for many older adults, losing even a fraction of a monthly check can cause serious hardship.
What to do next
If you’re an older person with defaulted student loans, don’t wait for your Social Security check to shrink. Contact the Default Resolution Group or a nonprofit loan advisor to explore your options.
To learn more, visit studentaid.gov or ssa.gov.