Bill Would Block Social Security Garnishment for Student Loan Borrowers

A new bill spearheaded by Senator Bernie Sanders (I-VT) would permanently stop the federal government from garnishing borrowers’ Social Security checks to satisfy defaulted student loans.“As a result of Trump’s disastrous cuts to education, an increasing number of seniors are in danger of having their Social Security checks garnished to pay back student loans they took out decades ago.That is beyond unacceptable,” Sanders said in a statement on August 17, 2026, announcing the bill.“In the richest country in the history of the world, no senior should have their Social Security payments taken away from them to pay back student debt.

This is especially true when seniors throughout the country already cannot afford the skyrocketing price of healthcare, prescription drugs, groceries and housing.Congress must pass this legislation.” The bill, dubbed the Stop Social Security Garnishment Act, is also sponsored by Sens.Elizabeth Warren (D-Mass.) and Ed Markey (D-Mass.), and would protect borrowers from having their Social Security checks offset.The introduction of the new legislation comes amid rising federal student loan default rates and chaotic reforms disrupting the student loan repayment system.

Here’s what borrowers should know.Student loan defaults can lead to Social Security garnishment The federal government has powerful tools, authorized by law, to pursue borrowers who have defaulted on their federal student loans.Without a court order, the government can use administrative processes to garnish a borrower’s wages, for example.The Education Department can also refer borrowers to the Treasury Offset Program, which allows the government to intercept federal income streams, such as federal tax refunds, federal benefits and payments to federal contractors.  Treasury Offset also allows the government to seize up to 15% of a borrower’s Social Security payments, and apply that to their defaulted federal student loan balance.

While Social Security benefits are often exempted from collections by private creditors or as a result of state court judgments, those exemptions do not apply to the collection of defaulted federal student loans.“If you have defaulted on your federal student loans and you receive Social Security Disability or retirement benefits, the federal government may withhold up to 15% of your benefits each month to pay back your student loan debt, as long as your remaining monthly benefit stays above $750,” explains the National Consumer Law Center (NCLC) on its website.“This is called an offset.The offset continues until your defaulted loan is paid in full, you are removed from default, or you are able to get the Department of Education to stop the offset.” Some forms of Social Security and related benefits payments are exempt from collections.

“The government can’t take Supplemental Security Income (SSI) or Veterans Benefits to collect your defaulted student loan debt,” says NCLC.Student loan defaults are spiking as repayment changes hit Collection efforts against defaulted federal student loan borrowers were halted early in 2026 by the Trump administration.But the Department of the Treasury, which has been contracted by the Education Department to take over federal student loan collection efforts, is expected to resume pursuing defaulted student loan borrowers in the coming months.Default rates have spiked during the last year, as millions of borrowers struggle with the return to repayment and major changes to federal student loan programs.

“Over nine million Americans are now in default on their student loans,” said the statement from Senator Sanders this week.“This means nearly 1 in 4 student loan borrowers cannot pay back their loans and are at risk of having their wages or Social Security payments seized to pay back their outstanding student debt.” These soaring default rates may hit senior student loan debtors particularly hard, given that many rely on Social Security benefits as their main, or only, source of income.“A record-breaking 9 million Americans are now in default on their student loans,” said a fact sheet on the bill released by Senator Sanders’s office this week.“This means nearly 1 in 4 student loan borrowers cannot pay back their student loans and are at risk of having their wages seized to pay back their outstanding student debt.”  Bill would halt Social Security garnishment for defaulted federal student loan borrowers The Stop Social Security Garnishment Act, if passed, would permanently end Social Security garnishments for defaulted federal student loan borrowers.

“The Stop Social Security Garnishment Act of 2026 will put an end to this absurdity and ensure no Social Security payments are taken away from older adults or individuals with disabilities due to student loan debt,” explains the bill fact sheet.“The bill: Prohibits the federal government from garnishing any Social Security payments, including Social Security Disability Insurance, from older adults and individuals with disabilities; Protects older adults against unnecessary forced collections; [and] Ensures older adults retain access to their Social Security payments to access vital healthcare, medicine, and groceries without fear of having access to those basic needs disrupted due to a student loan in default.” Importantly, the bill only focuses on Social Security benefits.It would not protect defaulted federal student loan borrowers from other Treasury Offset collection efforts, such as the interception of federal tax refunds, nor would it block administrative wage garnishments, which allow the government to seize a portion of earned wages from a borrower’s paycheck without a court order or judgment.Options for defaulted federal student loan borrowers to stop Social Security garnishment While no major vote on the Stop Social Security Garnishment Act has taken place yet, the bill’s chances of passing a Republican-controlled Congress are not particularly high.

That means if the Education Department and the Treasury Department resume collection efforts against defaulted federal student loan borrowers in the coming months, seniors who depend on Social Security benefits could be at risk.But borrowers will still have options.“The government should send you a notice before your benefits are taken.After your loan enters default and becomes eligible for collections, you should get an initial 65-day notice from the Department explaining the actions the government can take to collect the default student loans,” explained NCLC.

“You should also get a second notice before your Social Security benefits are taken.The government will send you a more detailed warning letter at least 30 days before the offset occurs, letting you know when the offset will begin, the amount of offset, and the contact information for the federal agency to which the debt is owed.If you act quickly to get your loans out of default, you may be able to stop collections from beginning.” Defaulted federal student loan borrowers who want to avoid Social Security offset and other adverse collection actions may want to start evaluating their options sooner rather than later, before they receive the initial offset notices.Some borrowers, particularly older borrowers and those struggling with serious health conditions, may qualify for a discharge of their student loans due to a disabling medical impairment through the Total and Permanent Disability (TPD) discharge program.

Other borrowers can explore default resolution options such as loan rehabilitation or Direct Loan consolidation to return their student loans to good standing, although these options come with both benefits and potential drawbacks that should be carefully evaluated and considered.