The U.S. Department of Education is pausing its plan to garnish people’s Social Security benefits if they have defaulted on their student loans (per The Hill.).
Ellen Keast, an Education Department spokesperson, said that the White House “has put a pause on any future Social Security offsets. The Trump Administration is committed to protecting Social Security recipients who oftentimes rely on a fixed income. In the coming weeks, the Department will begin proactive outreach to recipients about affordable loan repayment options and help them back into good standing.”
The development is an abrupt change in policy by the administration, who previously announced on April 21 that it would resume collection on the country’s $1.6 trillion student loan portfolio beginning May 5. For nearly half a decade, the government did not go after those who’d fallen behind as part of Covid-era policies under the Biden administration.
Borrowers who owed were to receive emails from the FSA to make them aware and to instruct them to contact the agency’s Default Resolution Group to first make a monthly payment, then either enroll in an income-driven repayment plan or sign up for loan rehabilitation. Notices that informed of administrative wage garnishment were to arrive later in the summer at an unannounced date. Social Security recipients could have as much as 15% of their checks taken to pay their defaulted student loans.
The Consumer Financial Protection Bureau reported in January that around 452,000 federal student loan borrowers aged 62 and older are currently in default and most likely have begun to collect Social Security benefits.
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