Social Security under threat for millions of seniors — thanks to new Trump admin policy

Student loan debt is often described as a major problem for Millennials and members of Generation Z. Baby Boomers who graduated from college back in the 1960s or 1970s or Gen-Xers who earned their college degrees in the 1980s or 1990s have had more time to pay back student loan debt.

But according to Newsweek's Aliss Higham, unpaid student loan debt is a problem for millions of older Americans — and may endanger their ability to collect Social Security.

In an article published on May 15, Higham reports, "Millions of Americans who rely on Social Security could see some of their monthly benefits seized, starting in June, if they have defaulted on their student loan debts…. Roughly 2.9 million Americans aged 62 or older hold federal student loan debt, a number that has grown by more than 70 percent since 2017, according to the U.S. Department of Education. According to CNBC, more than 450,000 elderly borrowers are currently in default and potentially subject to benefit reductions."

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The second Trump Administration, according to Higham, has "resumed aggressive collection efforts that were paused during the COVID-19 pandemic."

"Through a process known as Treasury Offset Program (TOP)," Higham notes, "the federal government can offset up to 15 percent of Social Security benefits to repay defaulted federal student loans. They cannot reduce your monthly check to lower than $750…. Starting May 5, the White House resumed these Treasury offsets for borrowers in default, including automatic garnishment from Social Security payments."

The Newsweek reporter notes, however, that "defaulted borrowers" still have "ways of getting back on track" for student loan debt they owe.

Bethany Hubert, a financial aid specialist for Earnest, told Newsweek, "First, reach out to your loan servicer. They can guide you through available options like deferment, forbearance, or creating a flexible repayment plan. Programs like income-driven repayment can adjust your monthly payment to better match your budget."

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Read the full Newsweek article at this link.