Millions of Americans Could Be Shielded From Social Security Seizures Under a New Bill

A proposed bill could help protect Americans against the garnishment of Social Security senior benefits and Social Security Disability Insurance (SSDI) benefits. The bill, proposed by Senator Bernie Sanders and co-sponsored by Senators Elizabeth Warren and Ed Markey, would prohibit the federal government from seizing Social Security benefits in an effort to collect defaulted student loans.

If it becomes law, the change may offer anyone with outstanding student loans an extra bit of peace of mind. Here's what to know about the bill, how it might work, and who might benefit.

How the government may garnish Social Security benefits

Under current law, the federal government is permitted to garnish Social Security payments to collect on defaulted student loans.

The Education Department may use Administrative Wage Garnishment to require employers to withhold up to 15% of a borrower's disposable pay. This may be implemented without having to first sue the borrower. Additionally, the Treasury Offset Program may intercept payments such as tax refunds and Social Security benefits in an effort to recover a defaulted loan. Law permits the garnishment of up to 15% of Social Security benefits.

In June 2025, the Trump Administration stated that it wouldn't cut Social Security benefits for borrowers, but in January 2026, the Education Department stated it planned to delay wage garnishment and involuntary collections. Tax law reforms reduced the number of repayment plans available to borrowers. At this time, garnishments are still paused, giving borrowers time to address their defaulted loans.

What the Stop Social Security Garnishment Act seeks to change

The bill seeks to prohibit the federal government from garnishing Social Security payments. Its protection would extend to SSDI payments, meaning the bill would help protect older adults and those with disabilities from forced collections. 

It would help ensure that older adults retain their benefits to help cover expenses like health care, medicine, and groceries without worry that those funds might be disrupted because they have a student loan in default.

"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," Sanders said. "This is especially true when seniors throughout the country already cannot afford the skyrocketing price of healthcare, prescription drugs, groceries and housing."

Who is exposed to defaulted loans and potential garnishment

According to Sanders' statement, nearly 43 million Americans face a total of $1.7 trillion in student loan debt. That includes 3 million Americans over age 62.

Older borrowers may be particularly vulnerable to benefits garnishment. Sanders' statement reports that over 40% of older workers have no retirement savings, while nearly half of seniors survive on less than $30,000 per year. Benefits garnishment could be financially devastating to older adults who already live on so little.

How Social Security garnishment affects Americans

Many Americans rely heavily on Social Security benefits, and any potential reduction of those benefits may cause financial distress. The Consumer Financial Protection Bureau (CFPB) estimates that more than one in three Social Security recipients who have student loans rely on their benefits to survive.

When benefits are garnished, they have a significant impact on beneficiaries; the CFPB found that half of beneficiaries who had a Social Security check garnished due to a defaulted student loan reported skipping a doctor's appointment or being unable to afford a prescription they needed.

The surge in student loan defaults

Sanders' act comes as the number of Americans with student loans in default surged when pandemic-era protections for borrowers ended. Loan payments resumed in 2023, and borrowers still had protections from some missed payment consequences until fall 2024. When those last protections ended, more borrowers went into default, beginning in June 2025.

Default numbers surged afterward. In June 2025, about 5.3 million borrowers were in default. By March 2026, that number had climbed to approximately 9.5 million.

The race against the garnishment pause

As the Education Department works to implement new loan repayment rules, wage and federal benefit garnishments are temporarily paused. According to the Education Department, the pause gives borrowers an opportunity to explore a new repayment option, consolidate their loans, or rehabilitate their loans.

Though Sanders' bill doesn't address potential wage garnishment, it would offer protection against the garnishment of certain federal benefits, like Social Security benefits. If it passes through the legislative process quickly, the bill might lock in protection before the pause on garnishment lifts.

Bottom line

The bill is in the very early stages and needs to pass through the House and Senate before receiving a presidential signature, so its future is uncertain. In the meantime, borrowers with student loans in default should contact the organization that notified them of the default. By explaining their situation and learning about their repayment options, especially early on, borrowers may be able to resolve the default.

Even a 15% reduction in benefits may cause financial difficulty for retirees living on fixed budgets, especially when they're paying higher housing, health care, and food costs. The bill might help many Americans retain their Social Security benefits, including helping older adults save money in retirement.

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