Student Loans: Ed Dept pauses plan to garnish Social Security checks

Yahoo

2 days ago

(NewsNation) — The Trump administration has paused a plan to garnish the Social Security checks of those who have defaulted on their student loans, an Education Department official told NewsNation on Monday.
'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,' Ellen Keast, a department spokeswoman, said in a statement to NewsNation.
The announcement will come as welcome news to hundreds of thousands of older Americans with defaulted student loans, after the Education Department warned in May that federal benefits would be subject to offset as soon as this month.
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In May, the Education Department resumed involuntary collections on defaulted federal student loans for the first time since March 2020. As part of that process, hundreds of thousands of older borrowers were expected to be at risk of having their Social Security checks garnished.
But on Monday, Keast said Social Security offsets have been paused, and that the Trump administration is 'committed to protecting social security recipients.'
'In the coming weeks, the Department will begin proactive outreach to recipients about affordable loan repayment options and help them back into good standing,' Keast said.
This year, an estimated 452,000 people aged 62 and older had student loans in default and were likely to experience the renewed forced collections, according to a January report from the Consumer Financial Protection Bureau (CFPB).
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The Education Department did not say whether the garnishment pause applied only to Social Security benefits or also to other federal benefits. NewsNation has asked for clarification.
The Social Security Administration (SSA) did not respond to NewsNation's request for comment.
When the Education Department initially announced the restart of involuntary collections, it warned that the Office of Federal Student Aid (FSA) would begin administrative wage garnishment 'later this summer' after sending required notices.
Last month, a federal judge blocked the Trump administration's plan to move the $1.6 trillion student loan portfolio to the Small Business Administration, keeping the Education Department in charge of managing those loans, CNBC reported.
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