Starting in June 2025, certain Social Security recipients across the United States will see their monthly checks reduced by 15% as the federal government resumes student loan collections through the Treasury Offset Program (TOP). This marks a significant shift following the multi-year pause on collections during the COVID-19 pandemic.
Why Are Social Security Payments Being Cut?
The cuts are part of the federal government’s efforts to recover overdue federal student loans from borrowers in default. Under the Treasury Offset Program, the Department of the Treasury is legally allowed to withhold a portion of federal payments including Social Security benefits if an individual has an outstanding debt, such as unpaid student loans.
During the pandemic, these garnishments were suspended to provide relief to financially vulnerable Americans. However, the pause officially ended in October 2023, and garnishments are now being phased back in.
For June 2025, this means eligible retirees and disabled individuals in default will begin facing automatic 15% deductions from their monthly Social Security payments—unless action is taken to resolve their loan status.
Who Is Affected?
According to estimates, over 100,000 older Americans, many aged 62 or older, are currently in default on federal student loans. These borrowers are now vulnerable to garnishment under the resumed program.
The maximum garnishment is set at 15% of monthly Social Security benefits. However, federal law ensures that garnishments cannot reduce the benefit below $750 per month, a protection meant to prevent extreme financial hardship.
Even so, for many seniors who depend solely on Social Security, any reduction in benefits could be devastating.
What Triggered the Resumption of Garnishments?
This change is not sudden. After the Biden administration ended the pandemic-era pause in collections, the Department of Education began sending notices and implementing a gradual return to enforcement.
The June 2025 restart of Social Security garnishments marks a full reinstatement of the program after more than four years of suspension. While the government states this is part of restoring “normal operations,” many advocacy groups argue it is an unfair burden on elderly and disabled Americans.
More on loan default policies is available on studentaid.gov.
How to Avoid the 15% Cuts
Social Security recipients who have received a Notice of Intent to Garnish still have options to protect their monthly income. The Department of Education typically gives a 30-day warning before garnishment begins.
Here are the main strategies to stop or prevent the 15% cut:
1. Apply for the Fresh Start Program
The Fresh Start initiative is designed to help defaulted borrowers get back on track. It offers temporary protection from collections and restores access to aid and repayment plans.
2. Enter Loan Rehabilitation
This allows borrowers to make nine voluntary, on-time payments to remove their loan from default. Once out of default, garnishments are halted.
3. Switch to an Income-Driven Repayment (IDR) Plan
Borrowers can consolidate their defaulted loan and enroll in an IDR plan. These plans calculate payments based on income and family size often as low as $0/month.
4. Dispute the Garnishment
If you believe the garnishment is incorrect or you’re facing financial hardship, you can request a hearing to appeal or delay the process.
Public Reaction and Criticism
Several social justice organizations and retirement advocacy groups have condemned the decision to resume garnishments. They argue that older Americans—especially those living on fixed incomes should not face debt collection through their retirement benefits.
Groups have urged Congress to consider reforming laws that allow for such garnishments, particularly for low-income seniors who may have co-signed loans for children or grandchildren.
In 2022, the Government Accountability Office (GAO) also released a report noting the impact of student loan garnishment on low-income Social Security recipients and called for legislative reform.
Final Thoughts
If you’re a Social Security recipient with outstanding student loans, do not wait until the garnishment begins. Check your loan status, explore rehabilitation or Fresh Start programs, and reach out to your servicer.
