Social Security Garnishment Bill: Many older Americans are still paying federal student loans even after reaching retirement age. Now a new proposal from Sen. Bernie Sanders could change what happens to their Social Security money.
The proposal is called the Stop Social Security Garnishment Act of 2026. It would stop the federal government from using Social Security retirement and disability benefits to collect defaulted federal student loan debt. Sanders is backed by Sens. Elizabeth Warren and Ed Markey on the measure.
Under current rules, the government can use the Treasury Offset Program to take part of certain federal benefits when a borrower has a defaulted federal debt. Federal Student Aid says this can include part of Social Security benefits.
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Why Social Security and Student Debt are Being Linked?
Student loans are not only a problem for young people. Millions of older Americans also have these loans. Federal Student Aid data shows that about 3.2 million borrowers who are 62 or older held nearly $144 billion in student loan debt.
Data cited by Sanders’ office also says around one in five student loan borrowers are at least 50 years old. Borrowers between 50 and 61 have an average balance of about $48,875. More than one-third of Social Security recipients with student loans rely on those benefits as their main source of income.
Sanders says taking money from Social Security can make life harder for people who already use those payments for basic needs.
“In the richest country in the history of the world, no senior should have their Social Security payments taken away from them to pay back student debt,” Sanders said.
“This is especially true when seniors throughout the country already cannot afford the skyrocketing price of healthcare, prescription drugs, groceries and housing. Congress must pass this legislation.”
What will the New Bill Do?
The proposal would not erase student loan balances. It also would not tell borrowers that they no longer have to repay their loans.
Instead, the main goal is to remove Social Security garnishment as a way of collecting defaulted federal student loans. The bill would protect Social Security retirement and disability payments for older borrowers and people with disabilities.
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There is still a large number of borrowers in default. Sanders’ office says more than 9 million federal student loan borrowers are currently in default. Federal Student Aid says a federal loan generally enters default after at least 270 days without a required payment.
The federal government can also use other collection methods in default cases. These can include wage garnishment and Treasury offsets. Up to 15% of disposable pay can be taken through administrative wage garnishment while Treasury offsets can affect certain federal payments.
What Happens while Congress Decides?
The Education Department announced in January 2026 that it was delaying involuntary collections, including wage garnishment and Treasury Offset Program actions, while new repayment changes were being put in place.
Borrowers who are already in default still have ways to deal with their loans. Loan rehabilitation is one option. Eligible borrowers generally need to make nine on-time voluntary payments during a 10-month period to complete rehabilitation. Successful rehabilitation removes the default status and stops collections.
The proposed Social Security protection is not law yet. Sanders and his supporters are pushing Congress to approve it. Reports say the Senate is expected to take up the measure after lawmakers return from recess in September.
Until Congress takes action, older Americans with federal student loans will need to keep watching their loan status and collection notices while the government’s repayment system continues to change.
