Department of Education Delays Plan to Seize Social Security Benefits to Collect on Defaulted Student Loans

June 3, 2025 — Press Release

450,000+ student loan borrowers aged 62 and older are at risk of seizure of their Social Security benefits

WASHINGTON – The Department of Education announced in April that, as soon as June, it planned to begin seizing funds from borrowers’ Social Security benefits to collect on defaulted federal student loans. But last night a spokesperson for the Department told reporters that no Social Security benefits had been offset and that any future Social Security offsets were paused. 

“We are pleased to see the Department act to protect struggling older adults and people with disabilities who rely on Social Security to make ends meet,” said Abby Shafroth, co-director of advocacy at the National Consumer Law Center. “Seizing money from Social Security benefits would have pushed many people already living on tight budgets into poverty. This is a chance to rethink that approach.” 

When it announced plans to begin seizing funds from borrowers’ Social Security benefits to collect on defaulted federal student loans, the Department of Education confirmed it was abandoning the Biden-announced policy of protecting the first 150% of the Federal Poverty Line (roughly $1900/month) in Social Security benefits and reverting to the old policy, set in 1996 and never indexed for inflation, of protecting only the first $750 per month. Today, $750 is well under the poverty line.

But the statement provided by the spokesperson claims, “(t)he Trump Administration is committed to protecting Social Security recipients who oftentimes rely on a fixed income.”

“This is a good start, but Social Security recipients need more than just rhetoric, they need a concrete commitment to protecting their benefits. The Department can deliver for them by formalizing the pause on Social Security seizures and implementing a policy of protecting at least 150% of the Federal Poverty Line in Social Security benefits from seizure when it resumes collections. So borrowers can plan, the Administration should also commit to not resuming collections before a specific date and providing at least two months notice before resuming collections,” Shafroth added. 

A fact sheet prepared by NCLC and New America Foundation calls for protecting more Social Security benefits and capping collections of student loans at the amount borrowers would owe in an income-driven repayment (IDR) plan.

Related Resources

• Student Loan Borrower Assistance Project
• Social Security Offsets and Defaulted Student Loans, January 8, 2025 (Consumer Financial Protection Bureau)
• Student Loan Toolkit, May, 20, 2024
• Pushed into Poverty: How Student Loan Collections Threaten the Financial Security of Older Americans, May 9, 2017 (National Consumer Law Center)