Millions of Americans carrying student debt could gain new protection for their Social Security benefits under legislation proposed by Senator Bernie Sanders that would prevent the federal government from seizing the payments to collect defaulted federal student loans.
Sanders, an independent from Vermont and the ranking member of the Senate Health, Education, Labor and Pensions Committee, announced the Stop Social Security Garnishment Act of 2026 on Monday. The measure is cosponsored by Democratic Senators Elizabeth Warren of Massachusetts and Ed Markey of Massachusetts.
The bill would amend federal higher education law so that payments made under the Social Security Act could not be offset because a borrower had defaulted on a federal student loan. Sanders’ office said the protection would cover older Americans as well as people receiving Social Security Disability Insurance.
Sanders said in announcing the proposal: “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.”
The legislation comes as the number of Americans in default on their federal student loans has climbed to a record level. Around 9.5 million borrowers, more than one in five federal student loan borrowers, were in default as of March, according to an Associated Press analysis of Federal Student Aid data. About $233.3 billion of the country’s roughly $1.7 trillion in federally backed student loan debt was in default.
Older Americans also account for a substantial share of outstanding debt. CNBC, citing second-quarter Education Department data, reported that around 9.6 million borrowers aged 50 and older owe nearly $457 billion in student loans. A 2025 Consumer Financial Protection Bureau analysis estimated that around 452,000 borrowers aged 62 and older had defaulted student loans and were likely receiving Social Security benefits.
Stock image: a Social Security card is covered with U.S. dollar bills.
How Social Security Garnishment Works
Federal student loans generally enter default once a borrower has gone more than 270 days without making required payments. If the debt remains unresolved, the government has collection powers that are broader than those available to many private creditors.
Through Administrative Wage Garnishment, the Education Department can direct an employer to withhold up to 15 percent of a defaulted borrower’s disposable pay without first suing the borrower in court. Separately, the Treasury Offset Program can intercept federal payments, including tax refunds and certain Social Security benefits, to recover delinquent government debt.
Under existing rules, up to 15 percent of certain Social Security benefits can be withheld, although federal law provides a minimum level of protection. Only $750 per month is explicitly protected by the statutory threshold, a figure that has not been increased since the 1990s.
Before the pandemic-era suspension of student loan collections, the number of people experiencing Social Security offsets had grown sharply. The Consumer Finance Protection found that the number of beneficiaries whose payments were reduced to collect student loans rose from about 6,200 in 2001 to 192,300 in 2019. The average amount taken in 2019 was $2,232 over the year, or $186 per month.
The agency also found that about 37 percent of 1.3 million Social Security beneficiaries with student loans relied on their benefits for at least 90 percent of their income. Half of beneficiaries with defaulted student loans who were in collections reported skipping a doctor’s visit or going without prescription medicine because of the cost.
Student Loan Defaults Have Surged
The current default wave followed the end of pandemic-era protections. Federal student loan payments resumed in 2023, followed by a one-year “on-ramp” period during which borrowers were protected from some consequences of missed payments. Once that period ended in fall 2024, borrowers again began progressing toward default, with new defaults appearing from June 2025 onward.
The number of borrowers in default subsequently jumped from around 5.3 million in June 2025 to roughly 9.5 million by March 2026. Millions more have also been navigating changes to federal repayment programs, including the elimination of the Biden administration’s SAVE income-driven repayment plan.
The federal government is not currently carrying out the involuntary collections Sanders’ bill targets. The Education Department announced in January that it would temporarily delay both Administrative Wage Garnishment and the Treasury Offset Program while implementing student loan repayment changes enacted under President Donald Trump’s tax and spending law.
The Education Department said the delay would give defaulted borrowers more time to use new repayment options, consolidate their loans or pursue loan rehabilitation, while arguing that borrowers should ultimately return to regular repayment.
Sanders’ bill would make the protection for Social Security payments permanent when the debt being collected is a federal student loan.
What Happens Next?
Sanders’ office announced the legislation on August 17, but the published draft still does not show an assigned Senate bill number, indicating it is at the earliest stage of the legislative process.
The proposal would need to move through Congress and pass both the Senate and House before it could be sent to the president’s desk.
Contact Newsweek editors on this story: Ben Kelly and James Debens
Related Articles
Start your unlimited Newsweek trial
