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For many retirees, maximizing Social Security benefits isn’t just something nice to have. It’s often a necessity.
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This summer, the Trump administration will start withholding up to 15% of Social Security payments from those who owe federal student loans.
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There are two totally legitimate ways to help the majority of late federal student loan borrowers avoid this deduction from their Social Security checks.
Social Security isn’t merely a monthly deposit into a bank account for most retirees. It serves as a crucial source of income that many just can’t do without.
In 2023, Social Security lifted around 22 million individuals above the federal poverty line, with 16.3 million being adults over the age of 65. A 23-year annual Gallup survey revealed that about 90% of retirees rely on some form of benefits to meet their needs.
So, collecting sufficient Social Security isn’t a luxury; it’s more of a requirement.
However, beginning this summer, retirees are likely to see their Social Security checks shrink by as much as 15%. For many of these beneficiaries, that loss could be significant.
For over six decades, the federal government has managed and regulated student loans. As of April 2025, the Department of Education reported that 42.7 million Americans owe a total of $1.6 trillion in student loans.
The collection of federal student loan repayments was halted in March 2020 due to the pandemic, and repayment hasn’t resumed. Currently, over 5 million borrowers have not made any payments in 360 days, while another 4 million are behind by 91 to 180 days.
While one might think that student loans mainly affect younger people, they have increasingly become an issue for retirees. Between 2017 and 2023, the number of borrowers under 62 dropped by 1%, yet those over 62 saw a staggering 59% increase, totaling roughly 2.7 million.
Of these senior borrowers, around 452,000 are in default on their federal loans and might be receiving Social Security benefits.
Since Donald Trump took office, his administration has worked to address government fraud and enhance efficiency. A significant change involves influencing the Social Security Administration (SSA) by reinstating garnishments for federal student loan defaults.
Borrowers who are behind on payments can expect that this summer, the Trump administration will start garnishing their Social Security. This affects all kinds of beneficiaries—including retired workers, survivors, and those who are disabled. However, there’s a stipulation: the maximum amount reduced can only apply if the recipient is receiving more than $750 in monthly benefits.
Also, unlike in the past, borrowers won’t receive a lengthy notice about possible garnishment. Instead, they’ll just get a 30-day warning if they remain in default.
As noted in CFPB reports, 37% of Social Security recipients who have unpaid federal student loans depend on their monthly checks for over 90% of their income. Even a 15% reduction could be financially crippling.
The simplest way to avoid this garnishment is to stay current with federal student loans. But with around 452,000 retirees potentially affected, there are two legal options available that many may not know about.
One option for some default borrowers is the Total Disability (TPD) Discharge Program, which allows for the cancellation of federal student loans, halting collections.
The DOE collaborated with the SSA in 2021 to streamline the TPD eligibility process for disabled borrowers nearing retirement age.
However, a drawback is that the responsibility to apply for the TPD discharge rests with older beneficiaries who will be permanently disabled when they reach full retirement age.
Additionally, retirees struggling with federal student loans can apply for a financial hardship waiver through the DOE.
This requires submitting income documentation to prove that their income is lower than the qualification threshold. If granted, this waiver could alleviate the financial burden related to the 15% garnishment.
According to the CFPB, an estimated 82% of Social Security beneficiaries in default would likely qualify for a hardship exemption. However, past reports indicate that fewer than 10% of those who applied actually received a waiver.
Simply applying for this financial relief might lead to approvals for many individuals.
Like many Americans, you might be lagging on retirement savings. But the strategies related to Social Security can make a difference.
There is a chance to receive as much as $23,760 more annually. Learning how to enhance Social Security benefits holds potential for a more secure and stress-free retirement.
