Beginning in June, millions of Social Security recipients may notice that some of their monthly benefits have been “seized” by the federal government.
According to Newsweek, as many as 2.9 million Americans aged 62 or older are also holders of student loan debt, and as many as 450,000 are currently in default on those loans, meaning a portion of the benefits can be used to pay those loans.
“The Trump administration has resumed aggressive collection efforts that were paused during the COVID-19 pandemic.”
“Through a process known as Treasury Offset Program (TOP), the federal government can offset up to 15 percent of Social Security benefits to repay defaulted federal student loans. They cannot reduce your monthly check to lower than $750.”
The Federal Student Aid website has this to say about the process:
“Before the offset begins, a notice of intent to offset will be sent to your last-known address to inform you that the offset and negative credit reporting are scheduled to begin in 65 days. The notice may only be sent once, and offsets will continue until your debt is paid or the default status is resolved.”
Tom O’Hare, holistic college advisor at Get College Going, said garnishing Social Security benefits isn’t new.
“It should be noted that these debt recovery practices are not new and have been in use for over two decades. They were suspended to assist delinquent borrowers during COVID-19 and during the remaining time the former Administration was in office.”
If you have defaulted on a student loan, Bethany Hubert, financial aid specialist at Earnest, says there are ways to avoid having your Social Security check garnished.
“First, reach out to your loan servicer. They can guide you through available options like deferment, forbearance, or creating a flexible repayment plan. Programs like income-driven repayment can adjust your monthly payment to better match your budget.”
