The Trump administration has confirmed that Social Security recipients who are in default on federal student loans will see their monthly benefits reduced by 15% beginning in June 2025.
The announcement marks the resumption of collections that had been paused during the COVID-19 pandemic.
The move could affect older Americans—many of whom depend on Social Security as their primary income—and has triggered renewed debate over the intersection of federal student debt and retirement security.
Which Social Security Recipients Will Be Affected?
The cuts apply to retired and disabled Social Security recipients who have defaulted on federal student loans. This is not a new policy, but a resumption of benefit offsets under the Treasury Offset Program, which had been suspended since March 2020.
According to the Department of Education, over 100,000 Americans age 62 or older are currently in default on federal student loans. Under current law, the government can garnish up to 15% of Social Security benefits—but not below a protected threshold of $750 per month.
Why Are These Cuts Being Applied Now?
The Biden-era pause on student loan collections officially ended in October 2023, and the Trump administration’s Department of Education has since phased in a return to enforcement. June marks the first time since the pandemic that Social Security garnishments will resume at scale.
The Department of Education says it is offering affected borrowers options to avoid benefit reductions, such as:
- Rehabilitation agreements
- Income-driven repayment plans
- Fresh Start initiative, which temporarily removes borrowers from default status
Borrowers who take advantage of these programs may be able to stop garnishments before they begin.
Advocacy and Criticism
Advocacy groups have condemned the decision as punitive and harmful to vulnerable seniors.
“This policy amounts to taking food and medicine away from people who can’t afford either,” said a spokesperson for the National Consumer Law Center, which has urged Congress to change the law.
Critics argue that the student loan system disproportionately harms low-income, older Americans, especially those who co-signed loans for children or grandchildren and now face financial penalties in retirement.
What Should Recipients Do?
Anyone at risk of garnishment should take the following steps:
- Log into your Federal Student Aid account to verify loan status.
- Call the loan servicer to ask about rehabilitation or repayment plans.
- Apply for the Fresh Start program if you qualify—it can halt collection and remove default status.
Bottom Line
Beginning in June 2025, Social Security beneficiaries who are behind on federal student loans will see their checks cut by 15% unless action is taken.
With the cost of living rising and many seniors already struggling to make ends meet, the move has the potential to spark a political and financial backlash.
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