From Yahoo Finance: 2025-05-26 10:45:00

Millions of older Americans relying on Social Security face potential benefit cuts due to federal student loan defaults. Trump administration restarts collections, threatening up to 15% deduction from Social Security checks. Nearly 3 million people over 62 have federal student loans, with over 450,000 in default while receiving Social Security.

Government resumes collections on federal student loans, including wage garnishments, tax refund seizures, and Social Security offsets for borrowers in default. Education Department plans to restart involuntary collections as early as June. Borrowers urged to seek help if receiving notices.

Federal government can withhold up to 15% of monthly Social Security benefits for defaulted student loans. Law protects the first $750 per month from garnishment. Borrowers urged not to ignore notices and provided steps to stop or reduce offsets, including loan rehabilitation or consolidation.

Retiring with student loan default now riskier than ever under Trump’s repayment efforts. Delaying retirement or reassessing savings strategy may be necessary to avoid financial hardship from potential Social Security offsets. Those still working urged to check loan status and explore income-driven repayment plans for financial security in retirement.



Read more at Yahoo Finance: Thousands of retirees may soon see Social Security checks docked by 15% as Trump admin resumes collections