U.S. Social Security Beneficiaries Face 15% Cuts Next Month

Starting next month, Social Security beneficiaries who have fallen behind on their student loan payments will face garnishments of up to 15% of their monthly benefits.

The Treasury Offset Program (TOP) was suspended at the onset of the COVID-19 pandemic and remained inactive throughout the Biden administration for borrowers in default.

Earlier this month, the Trump administration announced that student loan borrowers in default will once again be subject to the long-suspended Treasury Offset Program (TOP), Chris McLaughlin reported for MassLive.

TOP is a federal collections program that allows the government to withhold funds from federal payments such as tax refunds, salaries, and benefits—including Social Security—to repay delinquent debts.

The program was suspended at the onset of the COVID-19 pandemic and remained inactive throughout the Biden administration for borrowers in default.

According to Newsweek, TOP can seize up to 15% of Social Security benefits to pay back defaulted federal student loans. However, benefit checks cannot be reduced below $750 per month.

In its May 5 announcement, the Department of Education said approximately 195,000 borrowers have begun receiving 30-day notices from the Treasury Department regarding the resumption of offsets.