Shocking 15% Cut To Social Security Benefits Starts Next Month – Will You Be Affected?

A New Round of Social Security Cuts Could Start in June 2025

Starting as early as June 2025, thousands of older Americans could see their Social Security payments reduced due to unpaid federal student loans.

The Department of Education, working with the Treasury Offset Program (TOP), has resumed collecting overdue debts. This includes taking money directly from Social Security and disability benefits.

If you’re behind on your student loans, your monthly Social Security check could be reduced by up to 15%, a major blow to seniors who depend on a fixed income.

Why Are Social Security Benefits Being Cut?

The government is bringing back student loan collections that were paused during the COVID-19 pandemic.

Those temporary protections ended in 2023. Now, under the Biden administration, the Treasury Offset Program has been reactivated. This program lets the government collect unpaid debts by withholding money from things like tax refunds, federal salaries, and Social Security benefits.

If you’re receiving Social Security, up to 15% of your gross (before deductions) payment can be taken to repay student loan debt.

Who Is Affected by the 15% Cut?

This reduction will mostly impact older Americans who:

• Have federal student loans that are in default
• Have not started a repayment plan
• Have not applied for deferment or forbearance

Key Numbers:

• 2.9 million Americans aged 62 or older still owe federal student loans
• Over 450,000 are already in default
• 195,000 have been notified of garnishment, with more expected this summer

How the Garnishment Works

The Treasury Offset Program can take up to 15% of your Social Security or Social Security Disability Insurance (SSDI) payments.

But some protections exist:

• Your monthly benefits cannot be reduced below $750, no matter what
• The 15% is calculated from your gross benefit, before Medicare or other deductions
• Both retirement and disability benefits can be garnished

Example Garnishments:

Benefit Amount	15% Garnishment	Final Payment (If Over $750)
$1,200	$180	$1,020
$1,000	$150	$850
$800	$120	$750 (minimum limit)
$750 or less	No garnishment	$750

If your benefit would drop below $750 after the deduction, the garnishment will be reduced to keep your payment at that minimum.

What You Can Do If You’re at Risk

The Department of Education has already started sending out warnings. If you’re affected, you’ll have 30 days before deductions begin.

Steps You Can Take:

• Contact your loan servicer or the Department of Education right away
• Apply for an Income-Driven Repayment (IDR) plan or start Loan Rehabilitation
• Request a hardship exemption or file an appeal
• Keep a close watch on your Social Security letters and respond quickly

If you do nothing during the 30-day window, your benefits could be automatically reduced.

What Restarted the Offset Program?

During the pandemic, the government paused all forced student loan collections, including garnishments from Social Security. But by May 2025, the Treasury Offset Program was brought back, following new guidance from the Department of Education.

This return to collections comes after more than two years of relief. It’s part of a broader effort to recover long-overdue federal debts, especially student loans that have been in default for years.

For seniors who still owe, this could mean losing hundreds of dollars each month starting in June 2025.

If you’re one of the 195,000+ people who received a notice, now is the time to act. Contact your loan provider, enter a repayment plan, or apply for relief. Doing nothing could result in a sudden cut to your Social Security check.

This situation highlights a growing issue: student loan debt is no longer just a young person’s problem. Older Americans need to stay informed and take action to protect the benefits they rely on.

FAQs