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Social Security Warning For Millions of Older Americans


Senators have warned that millions of senior Americans could be at risk of losing their Social Security payments if they default on student loan repayments.

Democratic senators have written to the Social Security Administration (SSA), as well as the Treasury and Education Departments, urging them to take action on the risk faced by student loan borrowers aged over 65.

Failure to meet repayment schedules means Social Security recipients can lose up to 15 percent of their monthly benefits under the Treasury Offset Program (TOP), which collects overdue payments owed to state and federal government agencies.

Massachusetts Senator Elizabeth Warren, Oregon Senator Ron Wyden and 14 other lawmakers have signed the March 19 letter detailing concerns that TOP disproportionately affects older borrowers who also “often face the greatest repayment struggles.”

Social Security
Social Security card and dollar bills. Lawmakers have requested older Social Security recipients be exempted from TOP collections.

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The collective has called for Social Security retirement, survivor and disability benefits to be exempted from student loan-related offsets.

The letter cites a post by liberal think tank New America which found that in 2023 there were over 3.5 million Americans aged 60 and above with unpaid student loan debt, which is six times higher than in 2004. The accumulated amount of this debt reached $125 billion, a 19-fold increase since 2004.

In the same time frame, there was also a significant rise in the number of Social Security beneficiaries who had their benefits reduced due to defaulting on their student loans. In 2002, approximately 36,000 individuals were affected by this issue, whereas in 2015, that number surged to a total of 173,000, according to a report by the Government Accountability Office.

“When borrowers are in collections, on average their Social Security benefits are estimated to be reduced by $2,500 annually,” the lawmakers wrote. “This can be a devastating blow to those who rely on Social Security as their primary source of income.”

The lawmakers noted that “roughly 44 percent of borrowers who were 50 years and older at the time of their initial offset were subject to this maximum Social Security benefit withholding.”

“Offsetting Social Security benefits can push beneficiaries closer to – or even into – poverty,” the letter reads. They said the collections also undermine the “Social Security Act’s mission of providing for “the general welfare,” basic economic security, and the well-being of vulnerable Americans.”

The lawmakers requested a response from all three government departments by April 3. Newsweek has contacted the SSA, Treasury and Education Departments via email to see if this deadline has been met.

Millions of federal borrowers began making payments again in October 2023 after Congress ended a pause on loan payments and interest for the duration of the coronavirus pandemic. Since 2023, President Joe Biden has also progressed plans to cancel and reduce student debt under his Saving on a Valuable Education Plan (SAVE).