Thousands of student-loan borrowers are at risk of losing a portion of their Social Security checks starting this month. The Trump administration is resuming federal benefits garnishment for those in default. The Department of Education announced it will restart collections on defaulted student loans.
This move was initiated by President Donald Trump after a five-year pause. Beginning in early June, thousands of borrowers could see their monthly Social Security checks reduced. “The first monthly benefit checks subject to offset are those scheduled for early June,” the department stated.
Later this summer, all 5.3 million defaulted borrowers will receive notice that their earnings may be subject to administrative wage garnishment. In May, the Department of Education sent 30-day notices to 195,000 defaulted student-loan borrowers. The notices warned them of impending benefits garnishment.
This is part of an effort to restore accountability to the student-loan system. Education Secretary Linda McMahon said “Borrowing money and failing to pay it back isn’t a victimless offense. Debt doesn’t go away; it gets transferred to others.”
A federal student-loan borrower typically enters default after missing payments for more than 270 days.
Social Security benefits at risk
The number of borrowers who defaulted surged from 0.8% in 2024 to 8.04% in 2025. This puts more at risk of defaulting this summer.
Borrowers in default have limited options to address their situation. Loan rehabilitation requires a borrower to make nine payments within 20 days of their due dates for 10 consecutive months. This can result in the defaulted loan being removed from credit reports.
Loan consolidation into a federal direct loan is another option. Filing for bankruptcy is also a possibility. Some borrowers, both in default and delinquent on their loans, have expressed concern about their financial stability if their wages and benefits are withheld.
James Southern, a 63-year-old in serious delinquency, voiced his distress. “There will be no retirement. I’ll die on the job,” Southern said.
He emphasized the need to continue working even if his Social Security benefits are garnished.