452,000 Older Americans Could Lose Part of Their Social Security This Summer

Most people don't expect a decades-old student loan to follow them into retirement, much less reach into their Social Security check. But for hundreds of thousands of older Americans this summer, that's exactly the situation they're facing.

After a years-long pause, the federal government is expected to resume collections on defaulted federal student loans later this year. According to the Consumer Financial Protection Bureau (CFPB), the change could affect roughly 452,000 borrowers age 62 and older, with part of their monthly senior benefits potentially subject to withholding.

Here's how the process works and what retirees should know before collections resume.

How the offset works

A federal student loan enters default after about 270 days without payment. Once that happens, the government can recover what's owed through the Treasury Offset Program, which allows it to take money directly from certain federal payments, including Social Security.

For retirees, that can mean up to 15% of a monthly benefit is withheld before the payment reaches the bank account. On the average retirement benefit of $2,071, that would reduce a check by about $311 per month.

There is, however, a limit on how far that reduction can go:

• Monthly benefits cannot be reduced below $750
• Anyone receiving $750 or less is not subject to an offset

That protection has been in place since 1996 and has not been adjusted for inflation, leaving it well below the federal poverty line for a single person.

Why so many older borrowers are at risk

The fastest-growing segment of federal student loan borrowers is people over 60, a group that has nearly doubled since 2017. In many cases, these are not parents carrying debt for a child, but retirees still paying for their own education.

Research from the think tank New America found that about 80% of borrowers over 65 owe loans tied to their own schooling, often stretched out by years of accumulated interest. Some borrowed later in life for graduate school or career changes and reached retirement before the balance was fully paid off.

That creates a difficult position for borrowers who now rely heavily on Social Security. The CFPB found that 37% of beneficiaries with student loans rely on those checks for at least 90% of what they live on.

Where things stand now

Collections on defaulted federal student loans have been paused in different forms since the pandemic began in 2020. The government briefly restarted collections in 2025, but Social Security offsets were paused again after concerns about the impact on older borrowers.

A broader pause on involuntary collections followed in early 2026 while the Department of Education prepared a new repayment system called the Repayment Assistance Plan, which launches July 1, 2026.

The government has not announced exactly when Social Security offsets will restart, but many loan policy experts expect collections to resume sometime after the new program rolls out.

What to do while collections are still paused

The first step is finding out whether your loans are actually in default. You can check by logging into studentaid.gov with your Federal Student Aid ID or by calling the Treasury Offset Program hotline at 1-800-304-3107.

If your loans are not in default, Social Security offsets do not apply, even if you still have a federal student loan balance.

For borrowers already in default, there are two main ways to get out:

• Loan rehabilitation: Make nine income-based payments over 10 months, sometimes as low as $5, to remove the default from your record.
• Loan consolidation: Roll defaulted loans into a new Direct Consolidation Loan, usually within six to eight weeks, which ends the default status faster.

If you are unsure which path fits your situation, the Department of Education's Default Resolution Group at 1-800-621-3115 can walk through your options.

Relief options that may protect your check

Getting out of default is usually the strongest long-term fix, but it is not the only option. Some borrowers may be able to stop or reduce collections before an offset ever begins.

One possibility is a financial hardship exemption. If losing part of your Social Security check would make it difficult to cover basic expenses, you may qualify to have the offset reduced or paused.

The CFPB estimates that 82% of Social Security recipients with defaulted loans would qualify for a full suspension based on their income and expenses, but relatively few people have applied.

Note that the process depends on detailed paperwork, so gathering proof of income, bills, and medical costs ahead of time can improve the odds of approval.

Borrowers who are permanently disabled may also qualify for a Total and Permanent Disability discharge, which can cancel the loan and stop collections completely. In some cases, the process starts automatically, but many retirees still need to apply on their own.

Make sure warning notices can actually reach you

Before any Social Security offset begins, the government sends advance notice, usually about 65 days before collections start and again at least 30 days before.

Those notices go only to the address on file with Social Security and your loan servicer. If either one is outdated, you could miss important deadlines or lose time to respond. Taking a few minutes to confirm your information now is one of the simpler steps you can take while collections are still paused.

Bottom line

Carrying student debt into retirement is difficult enough without the added worry of losing part of a Social Security check. If you have a federal student loan in default, now is a good time to check where things stand and look into options that could reduce or stop collections before they begin.

For many borrowers, acting early is one of the simpler ways to make the right moves and protect more of their monthly retirement income.