By Matt Durr
mlive.com
(TNS)
WASHINGTON — The Education Department has paused a plan to garnish Social Security payments for beneficiaries who are in default on their student loans. The decision was confirmed by the department in a statement issued to Newsweek.
The move comes just as the first round of June Social Security payments were expected to hit bank accounts. This month’s Social Security payment schedule lists payment dates of June 3, 11, 18 and 25.
For several weeks, the Education Department and the Treasury Department warned millions of Americans that their Social Security benefits were at risk under the Treasury Offset Program.
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That program allows for the Treasury Department to collect federal debts through the garnishment of Social Security payments, tax refunds, regular wages and more. Up to 15% of a beneficiary’s Social Security payment can be garnished per month, but the minimum payment must be for $750.
A student loan is considered to be in default after it has not been paid for 270 days or more. According to the Associated Press, an estimated 5.3 million borrowers are currently in default and another 4 million are between 91 and 180 days late on their payments. Less than 40% of all borrowers are up-to-date on their loan payments.
The offset program had been on pause since the early days of the COVID-19 pandemic. The pause was extended under former President Joe Biden.
Earlier this year, under the direction of President Donald Trump, Education Secretary Linda McMahon announced the offset program would resume and collections would start as early as June.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” McMahon said in April.
An estimated 195,000 borrowers who are in default were expected to receive the first round of notices, alerting them that their wages and benefits were subject to garnishment. When the restart was announced, the Education Department said it expected to issue 5.3 million notices by the end of summer.
The decision to garnish wages is part of an overhaul of the department by Trump that ultimately aims to shutter the department entirely.
Critics of the decision pointed out the anticipated harm it would do to older Americans. A report compiled in January by the Consumer Financial Protection Bureau found 452,000 people aged 62 and older are in default on their student loans.
With the Social Security garnishments now on pause, a spokesperson for the Education Department told Newsweek that the department will proactively contact recipients about affordable loan repayment options in the coming weeks.
The Education Department advises borrowers struggling to make payments to contact the Default Resolution Group to learn about options that can help. The department says the DRG can assist borrowers in making payments, enrolling in an income-driven repayment (IDR) plan, or signing up for loan rehabilitation.
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©2025 Advance Local Media LLC. Visit mlive.com. Distributed by Tribune Content Agency LLC.
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