SPEAKIN’ OUT NEWS
Thousands of older Americans could see their Social Security benefits reduced as early as next month due to unpaid student loans.
The Trump administration announced in May it would resume the Treasury Offset Program (TOP)—a federal collections effort that allows the government to garnish up to 15% of Social Security payments for borrowers who are in default on federal student loans, Newsweek reported.
The offsets apply to both retirement and disability benefits. Although checks cannot be reduced below $750, the 15% is deducted from the total benefit amount before other withholdings.
Garnishments could begin as soon as June, according to the U.S. Department of Education, which said it has started notifying approximately 195,000 defaulted borrowers that they are subject to TOP collections. Additional notifications are expected to roll out throughout the summer, with all affected recipients receiving 30 days’ notice before collections begin.
This move follows the end of the pandemic-related pause on student loan payments and interest. In May, the Education Department confirmed that involuntary collections—such as garnishing tax refunds, paychecks, Social Security, and disability benefits—would resume.
According to CNBC, the number of borrowers aged 62 and older with federal student loans has surged to 2.9 million, up from 1.7 million in 2017—a 71% increase. Of those, more than 450,000 are in default and are likely to receive Social Security.
Many of these older borrowers are still repaying Parent PLUS loans—federal loans taken out by parents to help cover their children’s college tuition. With compounding interest and limited forgiveness options, these loans have become a long-term financial burden for many seniors.
Consumer advocates warn that the restart of these collections could severely impact older adults already struggling to make ends meet. The resumed garnishments may force some seniors to choose between essentials like housing, medicine, and food.