Retirement Social Security

Nearly 500K June Social Security Checks Will Be Smaller Than Expected (See Who’s Impacted)

Find out what you can do to keep more money in your pocket.

By Adam Palasciano

Edited by Chris Kissell

Updated June 3, 2025

Many retirees depend on every dollar of their Social Security benefits, so even a small reduction can be disruptive. Beginning in June, more than 450,000 seniors might face unexpected cuts to their monthly payments.

The reason? Unpaid student loan debt that is now in default. If you're trying to crush your debt before or during retirement, now is the time to take action.

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Why might checks be smaller?

Social Security checks can be garnished when federal student loans go unpaid. If a borrower defaults, the government can use the Treasury Offset Program (TOP) to recover the debt by withholding a portion of federal benefits.

This includes reducing Social Security payments, which many retirees rely on to cover essentials. After a multi-year pandemic pause, these offsets are restarting and could impact checks as early as this June.

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How many people might be impacted?

A loan goes into default when the delinquency becomes 270 days past due.

According to recent reports, more than 450,000 older borrowers are in default and potentially at risk of losing part of their benefits. These seniors were protected from garnishment during the pandemic-era pause, but that protection ended in May.

With enforcement ramping back up, a large number of retirees could soon be caught off guard.

How much of their benefit could they lose?

The government can legally withhold up to 15% of a person's monthly Social Security benefit if they are in default on a federal student loan. However, it cannot reduce payments below $750 per month.

For retirees already living on a tight budget, even a 15% cut can be substantial. It may create financial strain for those counting on every penny.

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Is this a new policy?

No, this is not a new policy. The federal government has long had the ability to garnish Social Security benefits for unpaid student loans.

However, those garnishments were paused during the COVID-19 pandemic. That pause remained in effect through several policy extensions.

Now, the government has returned to its pre-pandemic rules and resumed the collection process.

How will I know if I might be impacted?

Before reducing your benefits, the government is required to notify you in writing.

You'll receive a letter detailing the offset, indicating what portion of your benefit will be withheld, and that both the offset and negative credit reporting will begin in 65 days.

If you've received such a letter or know you're in default, it's critical to act quickly.

What can I do if I owe money?

If you're in default on a federal student loan, contact your loan servicer or the Department of Education. You may be eligible to apply for a period of deferment or forbearance. Or, you might be able to craft a flexible repayment plan that fits your budget.

Taking action now can stop garnishments and even restore access to full benefits in the future. The longer you wait, the harder it may become to protect your Social Security income.

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Bottom line

If you're one of the hundreds of thousands of seniors who has defaulted on a student loan, your June Social Security check might be smaller than expected.

While the government can't reduce payments below $750, losing a portion of your benefit can significantly impact your financial stability.

If you're a senior who has student loan debt, this is a good time to review your loan status and take steps to avoid unnecessary financial surprises. Doing so can preserve your income and promote a more stress-free retirement.

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