White House pauses Social Security penalties for student loan borrowers
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The Department of Education is pausing the plan to garnish the Social Security benefits of those in default on their student loans, a White House spokesperson confirmed to Axios Tuesday.
Why it matters: It's a welcome bit of relief for older Americans who are in the awful position of still owing money for school loans and already receiving Social Security benefits.
- It's also a notable backflip for the White House, which has taken a tough stance on student loans.
What they're saying: A spokesperson from the Department of Education said it had not garnished any Social Security benefits since collections on student loans resumed May 5.
- For now, the agency "has put a pause on any future Social Security offsets."
- "In the coming weeks, the Department will begin proactive outreach to recipients about affordable loan repayment options and help them back into good standing."
- "The Trump Administration is committed to protecting Social Security recipients who oftentimes rely on a fixed income," they added.
- The pause — previously reported by NewsNation — is also a notable backflip for the White House, which has taken a tough stance on student loans.
Between the lines: The pause comes as the administration's handling of Social Security overall is under a microscope— with worries that DOGE cuts have harmed the beloved program.
By the numbers: The number of adults over age 60 with student loan debt has skyrocketed over the past 20 years.
- 3.5 million have over $125 billion in debt, according to a study from last year.
- About 800,000 of borrowers age 62 and older are in default, according to the report from the National Consumer Law Center and New America.
- The Consumer Financial Protection Bureau says 450,000 over age 62 are in default, per CNBC.
Reality check: Tuesday's move is not a reprieve for the millions of young Americans who are in default on their loans and could still see their wages or tax refunds garnished.
- The White House announced in April it would restart collections activities on student loans — those efforts had been paused since the first Trump administration in 2020.
Zoom out: Part of the worry is that the agencies that manage student loans and oversee the industry have been gutted by the White House, making it even more difficult to help those in default avoid devastating consequences.
- "This feels very much like it needs to be an all hands on deck effort, but they have dramatically cut the number of hands they have available," Sarah Sattelmeyer, project director in the Higher Education initiative at New America, told Axios last month.
Editor's note: This story has been updated to credit NewsNation for previously reporting the pause.
