Introduction to Student Loan Debt
Borrowers who have defaulted on their federal student loans will no longer be at risk of having their Social Security benefits garnished, an Education Department spokesperson said.
Background on Student Loan Collections
The government last month restarted collections for the millions of people in default on their loans. An estimated 452,000 people age 62 and older had student loans in default, according to a January report from the Consumer Financial Protection Bureau.
Policy Change on Social Security Offsets
The department has not garnished any Social Security benefits since the post-pandemic resumption of collections and has paused “any future Social Security offsets,” department spokesperson Ellen Keast said last week.
“The Trump administration is committed to protecting Social Security recipients who oftentimes rely on a fixed income,” Keast said.
Advocates’ Response to the Policy Change
Advocates encouraged the Trump administration to go further to provide relief for the roughly 5.3 million borrowers in default.
“Simply pausing this collection tactic is woefully insufficient,” said Persis Yu, executive director of the Student Borrower Protection Center. “Any continued effort to restart the government’s debt collection machine is cruel, unnecessary and will further fan the flames of economic chaos for working families across this country.”
Growth of Student Loan Debt Among Older People
Student loan debt among older people has grown at a staggering rate, in part due to rising tuition that has forced more people to borrow heavily. People 60 and older hold an estimated $125 billion in student loan debt, according to the National Consumer Law Center, a sixfold increase from 20 years ago.
That led Social Security beneficiaries who have had their payments garnished to balloon from approximately 6,200 beneficiaries to 192,300 between 2001 and 2019, according to the CFPB.
Conclusion
The decision by the Education Department to pause Social Security offsets for borrowers in default on their student loans provides some relief to affected individuals. However, advocates argue that more needs to be done to address the growing issue of student loan debt among older people.
FAQs
- Q: Will borrowers in default on their federal student loans have their Social Security benefits garnished?
A: No, the Education Department has paused any future Social Security offsets. - Q: How many people age 62 and older have student loans in default?
A: An estimated 452,000 people age 62 and older have student loans in default. - Q: What is the total amount of student loan debt held by people 60 and older?
A: People 60 and older hold an estimated $125 billion in student loan debt. - Q: How has the number of Social Security beneficiaries who have had their payments garnished changed over time?
A: The number of Social Security beneficiaries who have had their payments garnished has increased from approximately 6,200 beneficiaries to 192,300 between 2001 and 2019.
