Temporary Relief For Seniors After Education Department Halts Student Loan Seizures From Social Security — Here's What That Means For Retirees

The U.S. Education Department has halted plans to seize Social Security checks from the roughly 452,000 older Americans who have fallen behind on federal student loans, a policy reversal that offers immediate relief to retirees living on fixed incomes.

What Happened: The about-face comes less than a month after the government restarted collections on the 5.3 million borrowers already in default.

"The department has not offset any Social Security benefits since restarting collections on May 5, and has put a pause on any future Social Security offsets," U.S. Department of Education spokesperson Ellen Keast said in a statement shared with Scripps News. Keast added, "The Trump Administration is committed to protecting Social Security recipients who oftentimes rely on a fixed income."

According to a report by the Associated Press, collections on defaulted loans resumed through the Treasury Offset Program, which can withhold up to 15% of federal payments, including tax refunds and wages.

But garnishing retirement benefits drew the loudest backlash from advocates who say older borrowers face unique hardship. "Simply pausing this collection tactic is woefully insufficient," said Persis Yu, executive director of the Student Borrower Protection Center.

See also: OpenAI’s Srinivas Narayanan Says ChatGPT Is No Longer Just Conversational: It’s Now Taking Actions ‘On Your Behalf’

She warned that "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 number of Social Security beneficiaries hit by offsets has exploded, jumping from about 6,200 in 2001 to 192,300 in 2019, as tuition inflation and Parent PLUS borrowing pushed more seniors into default. Federal data show older Americans now owe roughly $125 billion in student debt, a six-fold increase over two decades.

Why It Matters: Tuesday's pause does not erase the underlying debt. More than five million borrowers could still face wage garnishment or tax-refund seizures later this summer when broader enforcement ramps up, according to an Education Department notice sent to colleges last month.

Lawmakers are also weighing permanent fixes. A bill from Rep. Ayanna Pressley (D-MA) and Sen. Cory Booker (D-NJ) would bar future Social Security offsets outright, a move Pressley recently called "shameful" that retirees ever faced the threat. Similar proposals gained traction after pandemic-era payment pauses lapsed, and analysts warn another wave of defaults could follow if Congress fails to act.

Image via Shutterstock

Read next: Palantir CEO Alex Karp Says You Can Have A ‘Great Social Life' At 20 Or Be Successful But You Can't Do Both