Trump's Education Department Pauses Social Security Change

Newsweek

2 days ago

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
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The Department of Education has said it will not be garnishing Social Security checks to collect unpaid student loans.
"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," a spokesperson for the department said in a statement emailed to Newsweek.
Why It Matters
In May, the Education Department restarted involuntary collections on defaulted federal student loans for the first time since March 2020. As a result, hundreds of thousands of older borrowers faced the risk of having their Social Security benefits garnished.
According to a January report from the Consumer Financial Protection Bureau, an estimated 452,000 people aged 62—the minimum age to collect retirement benefits—and older had student loans in default this year and were likely to face forced collections.
What To Know
Under the Treasury Offset Program, the federal government can collect delinquent debts owed to its agencies. Its rules state that up to 15 percent of a person's Social Security benefits can be withheld to recover defaulted federal student loans. Garnishments cannot lower the monthly benefit amount to less than $750.
For beneficiaries who claim retirement, spousal and survivor checks and receive the average $1,976 monthly payment from the Social Security Administration, a 15 percent garnishment would result in a loss of $296.40 every month.
The spokesperson said that "in the coming weeks," the Education Department would "begin proactive outreach to recipients about affordable loan repayment options and help them back into good standing."
A stock photo of a Social Security card with U.S. dollars.
A stock photo of a Social Security card with U.S. dollars.
GETTY
What People Are Saying
The Education Department said in its statement: "The Trump Administration is committed to protecting Social Security recipients who oftentimes rely on a fixed income."
Secretary of Education Linda McMahon said in a statement on May 5: "As we begin to help defaulted borrowers back into repayment, we must also fix a broken higher education finance system that has put upward pressure on tuition rates without ensuring that colleges and universities are delivering a high-value degree to students.
"For too long, insufficient transparency and accountability structures have allowed U.S. universities to saddle students with enormous debt loads without paying enough attention to whether their own graduates are truly prepared to succeed in the labor market."
Tom O'Hare, a holistic college adviser at Get College Going, told Newsweek in May: "It should be noted that these debt recovery practices are not new and have been in use for over two decades. They were suspended to assist delinquent borrowers during COVID-19 and during the remaining time the former Administration was in office."
What Happens Next
Other types of garnishment, including from wages and federal tax refunds, are expected to go ahead, according to the Education Department's announcement.
"Before the offset begins, a notice of intent to offset will be sent to your last-known address to inform you that the offset and negative credit reporting are scheduled to begin in 65 days," the Federal Student Aid website said. "The notice may only be sent once, and offsets will continue until your debt is paid or the default status is resolved."