Key Points
- New bill proposal would ban the garnishment of Social Security income for defaulted student loan collections.
- More than 9 million Americans are currently in default on their student loans, with an estimated 450,000 seniors.
- Collection activity has already resumed, with more garnishments and offsets to come.
Sen. Bernie Sanders (I-VT) announced on August 17 that he will introduce the Stop Social Security Garnishment Act of 2026, a bill that would permanently bar the federal government from seizing Social Security payments to collect defaulted federal student loans. Senators Elizabeth Warren (D-MA) and Ed Markey (D-MA) are cosponsoring the bill, which comes as more than 9 million borrowers are in default (nearly 1 in 4 Americans with federal student loans).
The bill itself (PDF File) amends Title IV of the Higher Education Act to add a new Section 493E, which states that no payments due under the Social Security Act can be offset under the federal debt collection statute when a borrower defaults on a federal student loan. The protection would cover retirement benefits and Social Security Disability Insurance, and would take effect immediately if the bill passes.
Why It Matters
Under the Treasury Offset Program, the government can currently take up to 15% of a monthly Social Security check to collect a defaulted student loan, as long as the borrower is left with at least $750 per month (Congress set this level in 1996 and never indexed to inflation). Senator Warren has estimated that roughly 450,000 seniors in default could lose over $2,000 per year in benefits if offsets resume at full scale.
The population at risk is not small. More than 3 million Americans over age 62 hold student loan debt, and older borrowers are one of the fastest-growing segments of student loan holders. Many are still paying on loans taken out for themselves or for their children through Parent PLUS loans.
Sanders’ fact sheet notes that over 40% of older workers have no retirement savings, nearly half of seniors live on less than $30,000 a year, and more than 1 in 3 Social Security recipients with student loans depend on their benefits to get by.
For borrowers in that position, a 15% offset can be the difference between making rent and missing it.
What The Bill Does
According to the fact sheet from Sanders’ office, the legislation goes further than past garnishment protections by writing the ban into the Higher Education Act itself. The bill:
- Prohibits the federal government from garnishing any Social Security payments, including Social Security Disability Insurance, to collect student loan debt
- Protects older adults from forced collections on defaulted federal loans
- Ensures beneficiaries keep full access to their checks for healthcare, medicine, and groceries
Notably, the fact sheet points out that an estimated 1 in 5 Social Security beneficiaries with student loans may already qualify for a disability discharge but have never received it — meaning many borrowers facing a garnishment may have student debt that should have been forgiven.
The Collections Backdrop
The bill responds to a collections machine that has been restarting in stages. The Department of Education resumed involuntary collections in May 2025 after a five-year pause, then walked back Social Security offsets in June 2025 following public pressure.
Since then, wage garnishment has been slated to restart, and the Treasury Department has taken over student loan collections from the Education Department, putting the agency that runs the offset program in charge of the debt itself.
We’ve heard from some partners that collections has already restarted on defaulted HEAL loans and FFEL loans, and that collections on defaulted Direct loans will resume soon. In fact, some Redditors have recently posted about their loans being sent to collections.
Sanders’ office frames the bill as a response to the default surge following the end of pandemic-era protections and the SAVE plan’s collapse. The fact sheet cites data showing half of beneficiaries who had a check garnished over a defaulted loan skipped a doctor’s visit or went without a prescription because of cost.
How This Connects
Social Security offsets sit at the intersection of two problems we track closely: the record default cliff and the growing number of borrowers carrying student loan debt into retirement. With the average undergraduate borrower taking 17 years to repay, debt that follows borrowers to age 62 and beyond is now a structural issue of the system, not an edge case.
The bill faces long odds in a Republican-controlled Senate, and no committee action has been scheduled. Watch for whether it picks up bipartisan cosponsors, whether the Treasury Department restarts Social Security offsets this fall alongside wage garnishment, and whether the legislation gets attached to a larger package.
Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.