A New Social Security Garnishment Is Set to Begin This Summer -- but There Are 2 Legal Ways Most Retirees Can Avoid It

Sean Williams, The Motley Fool

Sun, Jun 8, 2025, 3:44 AM 6 min read

• Getting as much as possible out of Social Security isn't a luxury for most retirees -- it's an absolute necessity.

• This summer, the Trump administration will begin garnishing up to 15% of Social Security benefits for delinquent federal student loan borrowers.

• Two perfectly legal solutions exist that may allow a majority of tardy federal student loan borrowers to avoid having their Social Security checks garnished.

• The $23,760 Social Security bonus most retirees completely overlook ›

For most retirees, Social Security isn't just income that's deposited into their checking or savings account on a monthly basis. It represents a financial lifeline that many would likely struggle to make do without.

In 2023, Social Security was responsible for lifting 22 million people above the federal poverty line, some 16.3 million of whom were adults aged 65 and above. Meanwhile, 23 years of annual surveys from national pollster Gallup find that up to 90% of retirees require their monthly benefit, to some degree, to make ends meet.

Getting as much out of Social Security isn't a luxury -- it's often a necessity.

But beginning sometime this summer, select retirees can expect their Social Security checks to shrink by up to 15%. For some of these beneficiaries, it's income they simply can't afford to lose.

For well over six decades, the federal government has played a role in subsidizing and guaranteeing student loans. As of April 2025, the U.S. Department of Education (DOE) notes that 42.7 million Americans had a cumulative $1.6 trillion in federal student loans outstanding.

However, the collection of federal student loan repayments was halted during the early stages of the COVID-19 pandemic (March 2020) and was simply never lifted. According to the DOE, more than 5 million borrowers haven't made a payment in 360 days, and another 4 million are between 91 and 180 days late on their monthly payments.

While higher education student loans may sound like something that affects relatively younger Americans, they've become a prominent issue for retirees. Whereas the aggregate number of student loan borrowers under the age of 62 has declined by 1% from 2017 to 2023, the number of student loan borrowers aged 62 and above has surged 59% to approximately 2.7 million over the same period, based on data from the Consumer Financial Protection Bureau (CFPB).

Per the CFPB, an estimated 452,000 of these senior borrowers have defaulted on their federal student loans and are likely receiving Social Security benefits.