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 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. 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.
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