New Bill Would Shield Social Security From Student Loan Collections
Sen. Bernie Sanders announced on August 17 that he plans to introduce legislation aimed at permanently blocking the federal government from withholding Social Security benefits to collect defaulted federal student loans.
The Stop Social Security Garnishment Act of 2026 is co-sponsored by Sens. Elizabeth Warren and Ed Markey. The proposal comes at a time when more than 9 million Americans are in default on their federal student loans, roughly one in four borrowers.
If enacted, the bill would amend Title IV of the Higher Education Act to prohibit Social Security payments from being offset under federal debt collection rules when a borrower defaults on student loans.
The protections would apply to both retirement benefits and Social Security Disability Insurance (SSDI) and would take effect immediately upon passage.
How Social Security Garnishment Works Today
Under the Treasury Offset Program, the federal government is currently allowed to withhold up to 15% of a monthly Social Security check to recover defaulted student loan debt. However, beneficiaries must be left with at least $750 per month.
That $750 threshold was set by Congress in 1996 and has never been adjusted for inflation.
Sen. Warren has estimated that roughly 450,000 seniors in default could lose more than $2,000 annually in benefits if full Social Security offsets resume.
Today, more than 3 million Americans over age 62 carry student loan debt. Some are still repaying their own education loans, while others took on debt through Parent PLUS loans to help fund their children’s education.
A fact sheet from Sanders’ office highlights the financial strain on older Americans, noting that more than 40% of older workers have no retirement savings, nearly half of seniors live on less than $30,000 per year, and over one-third of Social Security recipients with student debt rely on their benefits for basic living expenses.
What the Bill Would Do
The legislation would bar the federal government from garnishing any Social Security payments, including SSDI, to collect federal student loan debt.
It would ensure that beneficiaries retain their full monthly Social Security income, which supporters say is essential for covering necessities like housing, healthcare, medication, and food.
The proposal also highlights a broader issue: an estimated one in five Social Security recipients with student loans may already qualify for a disability discharge but have not received it. As a result, some borrowers facing garnishment may actually be eligible for loan forgiveness.
Student Loan Collections Are Already Resuming
The bill arrives as federal student loan collections are gradually restarting after years of pandemic-era relief.
The Department of Education resumed involuntary collections in May 2025 after a five-year pause. In June, it temporarily reversed plans to resume Social Security offsets following public backlash.
Since then, wage garnishment has been scheduled to restart, and the Treasury Department has taken over student loan collection responsibilities from the Department of Education. The Treasury also administers the federal offset program used to collect debts from benefits and tax refunds.
Reports from industry partners suggest that collections have already resumed on defaulted HEAL and FFEL loans, with Direct Loan collections expected to follow. Some borrowers have also shared online that their accounts have been sent to collections.
According to Sanders’ office, the push for this legislation is tied to rising default rates following the end of pandemic protections and the collapse of the SAVE repayment plan.
The office also cites data indicating that half of beneficiaries who previously had Social Security garnished due to student loan default skipped medical care or went without prescriptions because of reduced income.
Outlook for the Legislation
The proposal comes as student loan debt increasingly follows borrowers into retirement. On average, undergraduate borrowers take about 17 years to repay their loans, contributing to a growing population of older Americans still carrying education debt.
Despite its focus on financial hardship among seniors, the bill faces significant political hurdles. The Senate is currently controlled by Republicans, and no committee hearings have been scheduled.
If passed, the legislation would permanently prohibit Social Security benefits from being used to collect defaulted federal student loans. For now, it remains a proposal that must advance through Congress before any protections take effect.
