Social Security recipients who are behind on student loan payments may see their benefits reduced by as much as 15% starting next month. The Trump administration announced in May the resumption of the Treasury Offset Program, aimed at collecting from individuals in default on their student loans. This program permits the government to withhold up to 15% of a Social Security benefit to repay overdue loans, as reported by Newsweek. Payments cannot be reduced below $750. The 15% deduction is calculated from the total benefit amount prior to any deductions and applies equally to retirement or disability payments. Garnishments could begin as early as June. According to CNBC, approximately 2.9 million people aged 62 and older have federal student loans, marking a 71% increase since 2017 when there were 1.7 million such borrowers. Over 450,000 borrowers in this age group are in default and are likely to receive Social Security. The Department of Education has begun notifying about 195,000 defaulted borrowers that they are subject to TOP offsets, with the remainder expected to be informed later this summer. All will receive 30 days’ notice before withholdings commence. Payments and interest on student loans were paused during the COVID pandemic but resumed in 2023. In May, the Department of Education announced it would restart involuntary collections, including garnishing tax refunds, paychecks, Social Security, and disability benefits.
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