Is your Social Security check smaller this month? Here’s what it might be, and what to do

If you receive Social Security, Supplemental Security Income (SSI) or both, and you have outstanding student loan debts you haven’t been paying, your June check — and potentially future checks — may be smaller.

In May, the U.S. Department of Education announced that it would begin “involuntary collections efforts” against an estimated 5.3 million people who have defaulted on their federal student loans. Previously the government put repayments on pause at the start of the COVID-19 pandemic in 2020, but that has ended, as have some of former President Biden’s repayment options and loan forgiveness initiatives.

Notices sent out by the Education Department urged borrowers in default to contact their default resolution group to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation. To cover the debt owed, those who have not done one of those will see their wages garnished and tax refunds confiscated.

And their Social Security benefits reduced. Of the 5.3 million borrowers, an estimated 425,000 are 62 years old or older, according to the Consumer Financial Protection Bureau.

Here’s what you can do.

Social Security benefits have special protections against garnishment, with limits on how much can be garnished by the Treasury Offset Program.

Money cannot be taken for medical debts, bankruptcy or civil lawsuits. But it can be garnished, with different limits, to repay child support, alimony or restitution, and debts owed to the federal government, such as student loans.

The most that can be taken for federal debts, such as student loans. is 15%, which is not insignificant for people living on a fixed income. Currently, $750 per month of Social Security income is protected from garnishment, which can put recipients under the poverty line.

You should have received notice from the Education Department by now if you’re in default, and U.S. Secretary of Education Linda McMahon has urged all colleges and universities that receive federal funding assistance to reach out to all former students by June 30 to remind them of their obligation to repay any federal student loan that is not in deferment or forbearance.

To be in default, you would need to have 270 days (roughly nine months) of nonpayment for most federal student loan servicers. Check the terms of your specific student loans. After 360 days, loans are transferred to the Department of Education’s default collections program.