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Students studying in a library | Source: Pexels
Students studying in a library | Source: Pexels

Social Security Benefits Spared from Student Loan Collections, but Wage Garnishment Set to Resume

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Jun 04, 2025
06:45 A.M.

The Trump administration has postponed plans to garnish Social Security benefits from defaulted student loan borrowers, while wage garnishments are expected to resume later this summer, according to the U.S. Department of Education.

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The administration had planned to begin offsetting Social Security checks in June for older borrowers in default. However, Education Department spokesperson Ellen Keast confirmed Monday that the move has been delayed. “The Trump Administration is committed to protecting Social Security recipients who oftentimes rely on a fixed income,” Keast said.

Calendar and tax documents on a desk | Source: Pexels

Calendar and tax documents on a desk | Source: Pexels

The decision affects more than 450,000 borrowers aged 62 and older who are in default and likely receiving Social Security benefits, according to the Consumer Financial Protection Bureau. Many were anticipating reduced checks as early as June 3.

Despite the reprieve for retirees, the Education Department will move forward with wage garnishments later this summer for defaulted borrowers. “Wage garnishment will begin later this summer,” Keast told CNBC.

The agency may collect up to 15% of a borrower's disposable income, provided the garnishment does not reduce weekly earnings below $217.50, or 30 times the federal minimum wage. Borrowers will receive a 30-day notice before garnishment begins and may request a hearing before an administrative law judge.

Students studying in a library | Source: Pexels

Students studying in a library | Source: Pexels

“Borrowers should pay back the debts they take on,” said U.S. Secretary of Education Linda McMahon in a video posted on April 22.

Collection activities on federal student loans had been largely paused since the onset of the COVID-19 pandemic in March 2020, with the Biden administration extending relief measures to help struggling borrowers remain current. The Trump administration’s decision signals a shift in strategy, emphasizing loan repayment and fiscal responsibility.

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