Social Security of student loan borrowers won't be garnished: DOE
Interactive Senior Student Debt Graphic
The Graying of Student Debt
Record Numbers of Older Americans Trapped in Decades-Old Educational Debt as Government Resumes Aggressive Collections
BREAKING NEWS UPDATE - June 3, 2025
Education Department Halts Social Security Garnishment for Student Loan Defaulters
In a significant policy reversal, the U.S. Department of Education announced Tuesday that it will no longer garnish Social Security benefits from borrowers who have defaulted on their federal student loans. The decision comes just weeks after the Trump administration resumed aggressive debt collection efforts that had been paused during the COVID-19 pandemic.
"The Trump Administration is committed to protecting Social Security recipients who oftentimes rely on a fixed income," said Education Department spokesperson Ellen Keast, confirming that the department has paused "any future Social Security offsets."
The announcement provides immediate relief to an estimated 452,000 people aged 62 and older who had student loans in default and were at risk of losing up to 15% of their monthly Social Security benefits. However, the department's collection efforts continue through other means, including wage garnishment and tax refund seizures.
Student debt advocates welcomed the news but called for broader relief. "Simply pausing this collection tactic is woefully insufficient," said Persis Yu, executive director of the Student Borrower Protection Center. "Any continued effort to restart the government's debt collection machine is cruel, unnecessary and will further fan the flames of economic chaos for working families across this country."
The policy change affects the core collection mechanism that had made the federal government confident about lending to seniors, as detailed in the investigation below.
Valerie Warner never imagined that at age 71, she would be cross-stitching her student debt balance—$268,000—into a protest banner outside the U.S. Department of Education. Like hundreds of thousands of other seniors across America, Warner faces the grim prospect of dying with student loan debt that has ballooned far beyond what she originally borrowed in the 1980s.
The numbers tell a startling story of America's graying debt crisis: There are 2.8 million federal student loan borrowers age 62 and older with a total of $121.5 billion in debt, more than 726,300 of them over the age of 71, according to the Education Department. This represents a six-fold increase in the number of borrowers aged 60 and older since 2004, and the amount they owe is up 19-fold.
Why Lenders Approve Loans for Seniors
The federal student loan system operates with virtually no restrictions that might protect older borrowers from taking on debt they cannot realistically repay. There is no minimum age for a borrower of a federal student loan, and If you're over 50 you're still eligible for student loans, scholarships and grants by using The Free Application for Federal Student Aid (FAFSA) form.
This open-door policy exists because federal student loans don't require credit checks or employment verification for most programs. The government's rationale is straightforward: education benefits society, and restricting access based on age could be discriminatory. However, this approach has created a system where Federal student loan debt in the United States is not forgiven when the borrower retires or at any other age.
The reasons seniors take on student debt vary significantly. About 80 percent of federal borrowers 65 and older had outstanding loans from their own education, dispelling the common assumption that most senior debt comes from Parent PLUS loans. Many are career-changers who returned to school in their 40s, 50s, or even 60s, often taking advantage of the portion of students over 40 taking out loans increased from 25 percent in 2004 to 45 percent in 2016.
The Government's Collection Strategy: How Social Security Became Collateral
What has historically made the federal government confident about lending to seniors nearing or in retirement was their extraordinary collection powers, particularly the ability to garnish Social Security benefits—a tool unavailable to private lenders.
Until this week's policy change, by law, Social Security could take retirement and disability benefits to repay student loans in default. Social Security could take up to 15% of a person's benefits, though benefits could not be reduced below $750 a month or $9,000 a year.
This collection mechanism operated through the Treasury Offset Program (TOP), which allowed for up to 15% of monthly federal government benefits, including Social Security and disability payments, to be withheld. The government didn't even need to go to court—the garnishment happened automatically once a loan entered default after 270 days of non-payment.
The scope of this collection effort had been staggering. Between 2001 and 2019, the number of Social Security beneficiaries experiencing reduced benefits due to forced collection increased from approximately 6,200 to 192,300—a more than 3,000% increase.
While Social Security garnishment has now been suspended, the government retains other collection tools including wage garnishment, tax refund seizures, and other federal benefit offsets, maintaining significant leverage over borrowers in default.
The Harsh Mathematics of Senior Debt
For many older borrowers, the numbers simply don't add up. Seniors lose as much as $2,500 in Social Security benefits annually when their benefits are garnished. In 2019, the average annual amount collected from individual beneficiaries was $2,232 ($186 per month).
The cruel irony is that much of what's collected doesn't even reduce the principal balance. Despite the exponential increase in collections from Social Security, the majority of money the Department of Education has collected has been applied to interest and fees and has not affected borrowers' principal amount owed. Of the $1.1 billion garnished from benefits as of 2016, more than 70% went to fees and interest rather than the borrower's actual debt.
This creates a devastating cycle where seniors see their benefits reduced month after month while their debt continues to grow. More than one-third of older borrowers remained in default 5 years after becoming subject to offset, and some saw their loan balances increase over time despite offsets.
The Human Cost
The impact extends far beyond numbers on a balance sheet. Paying student debt has caused some to put off retirement, take money out of their 401k, forgo medical care or use funds from their limited income sources to make their monthly payment. Nine percent say their student loan debt has forced them to forgo medical care, according to a survey by AARP.
Marjorie Sener, a 74-year-old legal secretary from Dallas, represents the face of this crisis. Originally borrowing about $5,000 for college credits in her 20s, she now owes more than $55,000—ten times her original debt—and has given up any hope of retirement.
"My payments are as small as I can make them, since I cannot repay the full amount," she said. "My financial goals are to be able to pay my rent, afford my car and medical bills and hopefully be able to provide for my own funeral expenses."
Racial and Economic Disparities
The crisis hits communities of color particularly hard. Older adults living in communities where the majority of residents are AIAN, Black, or Hispanic were less likely to repay their loans on time, with delinquency rates of 15%, 13%, and 10% respectively in predominantly minority communities, compared to an overall rate of 8%.
Collections Resume Under New Administration—With Key Exception
After a five-year pause during the COVID-19 pandemic, the Department of Education under the Trump administration resumed aggressive collection efforts in May 2025. The U.S. Department of Education announced its Office of Federal Student Aid (FSA) would resume collections of its defaulted federal student loan portfolio on Monday, May 5th, affecting millions of borrowers who had not made payments since March 2020.
However, in a significant policy shift announced June 3, 2025, the department said it would no longer garnish Social Security benefits from defaulted borrowers, providing relief to the estimated 452,000 elderly borrowers who were at risk of losing portions of their monthly benefits.
Despite this change, other collection mechanisms remain in place. The government continues to pursue wage garnishment, tax refund seizures, and other federal benefit offsets for the roughly 5.3 million borrowers in default nationwide.
Limited Relief Options
While seniors face the same debt forgiveness programs as younger borrowers, their advanced age makes most options impractical. Income-driven repayment plans that forgive debt after 20-25 years offer little hope to someone in their 70s. Total and Permanent Disability Discharge – cancels your debt if a doctor or the Social Security Administration or Veterans Administration determines you have a physical or mental ailment that prevents you from working, but If annual documentation to verify income is not submitted, a loan initially approved for a TPD discharge can be reinstated and offsets resume.
The Policy Debate
Advocates argue that the current system is fundamentally broken for older borrowers. "These folks do not have 25 years to make a payment plan, nor do they have money to quickly write off their balances," said Eleni Schirmer of the Debt Collective.
Recent proposals have called for automatic debt forgiveness for borrowers who have been paying for more than 20 years, but such relief remains uncertain under the current administration.
Looking Forward
As the crisis deepens, the fundamental question remains: Should a system designed to expand educational opportunity be allowed to trap seniors in debt they took on decades ago? With Social Security benefits serving as the government's ultimate collection tool, the federal student loan program has created a situation where the safety net meant to provide dignity in retirement becomes the mechanism for debt collection.
For Valerie Warner and hundreds of thousands like her, the cross-stitched debt numbers on protest banners represent more than statistics—they represent dreams deferred, retirements postponed, and a system that treats education as a commodity with lifetime consequences, regardless of age or ability to pay.
As student loan payments resume and collection efforts intensify, the intersection of aging, debt, and Social Security will likely become one of the most pressing financial issues facing American seniors in the coming decade.
Sources
- The Washington Post
- "Elderly student loan borrowers owe $121 billion. They ask Biden
for relief." (December 30, 2024)
https://www.washingtonpost.com/education/2024/12/27/elderly-student-loan-debt-forgiveness-biden/ - Axios
- "Millions of seniors behind on student loans risk losing Social
Security, lawmakers warn Biden" (March 20, 2024)
https://www.axios.com/2024/03/20/student-loans-relief-congress-debt-social-security - Civil Beat
- "Student Loan Repayments Could Hit Hawaiʻi Senior Citizens
Hard" (May 19, 2025)
https://www.civilbeat.org/2025/05/student-debt-puts-hawai%CA%BBis-older-adults-at-risk-of-social-security-cuts/ - The Hechinger Report
- "Student loan borrowers in their 60s and older fear payments
resuming" (September 1, 2023)
https://hechingerreport.org/as-student-loan-repayments-resume-older-borrowers-who-still-have-debt-keep-working/ - Bankrate
- "3.6 Million Seniors Have Student Loan Debt. Here's What To
Do" (April 1, 2025)
https://www.bankrate.com/loans/student-loans/seniors-carrying-student-loan-debt-in-retirement/ - Urban Institute
- "Ensuring Americans Can Retire Free from Student Loan Debt"
https://www.urban.org/urban-wire/ensuring-americans-can-retire-free-student-loan-debt - Legal Aid Society of Cleveland - "I am a senior with student loan debts. What
help can I receive?" (March 5, 2019)
https://lasclev.org/help-with-senior-student-loans/ - New America
- "Why Do So Many Older Americans Have Student Loan Debt?"
https://www.newamerica.org/education-policy/edcentral/why-do-so-many-older-americans-owe-student-loans/ - CNBC
- "Millions of older adults with student debt are at risk of losing
some Social Security benefits, lawmakers warn" (March 26, 2024)
https://www.cnbc.com/2024/03/25/older-adults-with-student-debt-at-risk-of-losing-some-social-security-benefit.html - CNBC
- "Student loan borrowers in default could see up to 15% of Social
Security benefits garnished" (May 14, 2025)
https://www.cnbc.com/2025/05/14/social-security-benefits-at-risk-for-defaulted-student-loan-borrowers.html - Newsweek
- "Social Security Benefits Could Be Targeted for Nearly Half a
Million People" (May 2025)
https://www.newsweek.com/social-security-benefits-confiscated-student-loan-debt-2072570 - Consumer Financial Protection Bureau - "Issue Spotlight: Social Security Offsets and
Defaulted Student Loans"
https://www.consumerfinance.gov/data-research/research-reports/issue-spotlight-social-security-offsets-and-defaulted-student-loans/ - Center for Retirement Research - "How Do Unpaid Student Loans Impact Social
Security Benefits?"
https://crr.bc.edu/how-do-unpaid-student-loans-impact-social-security-benefits/ - Congressman John Larson - "How Student Loan Debt Could Impact Social
Security Benefits For Millions of Older Americans" (March 27, 2024)
https://larson.house.gov/media-center/in-the-news/how-student-loan-debt-could-impact-social-security-benefits-millions-older - LendingTree
- "Can Student Loan Debt Eat Up Your Social Security Benefits?"
(January 27, 2023)
https://www.lendingtree.com/student/social-security-garnished-student-loans/ - PBS News
- "Older Americans at risk as government restarts Social Security
garnishment on student loan debt" (May 2025)
https://www.pbs.org/newshour/nation/older-americans-at-risk-as-government-restarts-social-security-garnishment-on-student-loan-debt - Student Loan Borrower Assistance - "Social Security & Other Government
Benefits Seizure" (March 28, 2024)
https://studentloanborrowerassistance.org/for-borrowers/dealing-with-student-loan-debt/default-debt-collection/collection-of-student-loan-debt/social-security-other-gov-benefits-seizure/ - AARP
- "No Age Limit to Apply for FAFSA Student Grants and Loans"
(February 19, 2021)
https://www.aarp.org/money/credit-loans-debt/info-2021/fafsa-tuition-aid-for-all-ages.html - Appily
- "Eligibility for Federal and Private Student Loans"
https://www.appily.com/guidance/articles/paying-for-college/eligibility-for-federal-and-private-student-loans - U.S. Government Accountability Office - "Social Security Offsets: Improvements to
Program Design Could Better Assist Older Student Loan Borrowers with
Obtaining Permitted Relief"
https://www.gao.gov/products/gao-17-45 - U.S. Department of Education - "U.S. Department of Education to Begin Federal
Student Loan Collections, Other Actions to Help Borrowers Get Back into
Repayment"
https://www.ed.gov/about/news/press-release/us-department-of-education-begin-federal-student-loan-collections-other-actions-help-borrowers-get-back-repayment - Education Data
- "Student Loan Debt Statistics [2025]: Average + Total Debt"
(March 16, 2025)
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https://sandiegouniontribune.com
By the Numbers: Senior Student Loan Debt Crisis
Total Debt Owed
· $121.5 billion - Total federal student loan debt owed by 2.8 million borrowers age 62 and older
· $125 billion - Total debt (federal and private) owed by 3.5 million Americans age 60 and older
· 726,300 - Number of borrowers over age 71 with federal student loan debt
Individual Debt Amounts
· $17,857 to $44,834 - Average loan balance range for borrowers 62 and older
· Less than $10,000 - Amount owed by most seniors at the time of their initial Social Security offset
· $268,000 - Debt owed by 71-year-old activist Valerie Warner (law degree from 1980s)
· $55,000 - Current debt of 74-year-old Marjorie Sener (originally borrowed $5,000)
What Seniors Actually Pay
· $186 per month - Average monthly amount collected from individual Social Security beneficiaries in 2019
· $2,232 annually - Average yearly amount collected from seniors through benefit garnishment
· $2,500 - Maximum annual reduction in Social Security benefits for seniors in collections
· 15% - Maximum percentage of Social Security benefits that can be garnished
· $750 - Minimum monthly benefit amount that must be left after garnishment
The Collection Machine
· $171 million - Amount collected through Social Security offsets in fiscal year 2015
· 192,300 - Number of Social Security beneficiaries who had benefits garnished in 2019
· 6,200 - Number who had benefits garnished in 2001 (3,000% increase over 18 years)
· 452,000 - Estimated number of borrowers age 62+ currently in default and subject to collections
Time Factors
· 20+ years - Length of time 43% of older borrowers had held their loans before first offset
· 25 years - Time required for loan forgiveness under income-driven repayment plans
· More than 70% - Portion of collected funds that goes to interest and fees rather than principal
· One-third - Percentage of older borrowers who remained in default 5 years after initial offset
Growth Trajectory
· 6-fold increase - Growth in number of borrowers age 60+ since 2004
· 19-fold increase - Growth in total debt amount for seniors since 2004
· 65% increase - Growth in federal borrowers age 62+ from 2017 to 2024 (1.7M to 2.8M)
· 40% - Percentage of borrowers age 65+ who are in default
Sources: U.S. Department of Education, Consumer Financial Protection Bureau, Government Accountability Office, New America
As student loan payments resume and collection efforts intensify, the intersection of aging, debt, and Social Security will likely become one of the most pressing financial issues facing American seniors in the coming decade.
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