The US Department of Education has announced that Social Security recipients who are in default on federal student loans will see their monthly benefits reduced by 15% starting June 2025. This move marks the resumption of collections paused during the COVID-19 pandemic and is expected to disproportionately affect older Americans, many of whom rely on Social Security as their primary income.
Around 100,000 Americans aged 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 there’s a protected threshold of $750 per month. The Biden-era pause on student loan collections officially ended in October 2023, and the Trump administration has since phased in enforcement.
Affected borrowers have options to avoid benefit reductions, such as rehabilitation agreements, income-driven repayment plans, and the Fresh Start initiative, which temporarily removes borrowers from default status. If they take advantage of these programs, they may be able to stop garnishments before they begin.
Advocacy groups have criticized the decision as punitive and harmful to vulnerable seniors, saying it takes away food and medicine from people who can’t afford either. Critics argue that the student loan system disproportionately harms low-income, older Americans, especially those co-signing loans for family members.
To avoid garnishment, Social Security recipients should log in to their Federal Student Aid account, call their loan servicer about rehabilitation or repayment plans, and apply for the Fresh Start program if they qualify. The move has the potential to spark a political and financial backlash as the cost of living rises and many seniors struggle to make ends meet.
Source: https://www.fingerlakes1.com/2025/05/18/social-security-cuts-payments-15-percent-june-2025