Student Loan Defaulters Face Social Security Garnishment of Up to 15% Under Renewed Collection Efforts

Social Security recipients who have defaulted on federal student loans may soon see a reduction in their monthly benefits, as the Trump administration resumes involuntary collection efforts.

The administration has announced that garnishment of benefits for borrowers in default could begin as early as June. Consumer advocates warn this could have a significant impact on seniors who rely on Social Security as their primary or sole source of income.

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Under federal law, up to 15% of a borrower’s monthly Social Security benefit may be withheld to repay defaulted student debt. However, recipients must be left with at least $750 per month. This garnishment applies to all benefit types, including retirement and disability, according to higher education expert Mark Kantrowitz.

Kantrowitz also noted that the offset is calculated before other deductions, such as Medicare premiums.

Data from the Education Department shows that, as of the first quarter of 2025, around 2.9 million Americans aged 62 and older hold federal student loans—up from 1.7 million in 2017. More than 450,000 of them are in default and likely receive Social Security benefits, according to the Consumer Financial Protection Bureau.

Borrowers facing garnishment reportedly receive less warning under current practices. “The failure of the U.S. Department of Education to provide the 65-day notice limits the ability of borrowers to challenge the Treasury offset,” Kantrowitz said. He added that borrowers should still receive at least a 30-day notice, sent to their last known address.

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The Education Department stated that required notices were issued prior to the Covid-19 pandemic and may not be reissued.