Senators Propose Bill to Prevent Social Security Deductions for Defaulted Student Loans

Democratic senators in the U.S. Congress are pushing for a new bill aimed at preventing elderly student loan borrowers and disabled borrowers from having their Social Security benefits garnished after defaulting on their loans. This move comes amid rising student loan delinquency rates and changes to repayment policies under the Trump administration.

Three Senators Introduce the Bill
On Monday, Bernie Sanders, Elizabeth Warren, and Ed Markey jointly introduced the bill, which seeks to limit the federal government's methods of collecting debts from certain defaulted borrowers. The bill focuses on two groups: elderly borrowers and disabled borrowers.

Sanders stated that many elderly individuals already struggle to cover medical, prescription, food, and housing costs, and continuing to garnish Social Security benefits in such circumstances would further exacerbate their financial pressure.

High Delinquency Rates for Student Loans
The latest household debt report from the New York Federal Reserve shows that the student loan delinquency rate was 10.6% in the second quarter of 2026, up from 10.3% in the first quarter. Before the pandemic, this rate was approximately around 11%. Researchers believe that the current data indicates that the delinquency rate has temporarily stabilized.

• Delinquency rate in Q2 2026: 10.6%
• Delinquency rate in Q1 2026: 10.3%
• Pre-pandemic level was about 11%

However, researchers also noted that the delinquency rate could rise again, partly due to the cancellation of the SAVE repayment plan during the Biden administration. This plan was originally designed to provide borrowers with lower monthly payments and shorten the time needed for debt relief.

Government Has Not Specified Resumption Timeline
The Trump administration announced in May 2025 the resumption of mandatory collections on defaulted student loans. Weeks later, the government announced a pause on garnishing Social Security benefits, stating that this move was intended to allow time for the implementation of repayment system adjustments.

In January of this year, the U.S. Department of Education also announced a pause on wage garnishments to facilitate the student loan repayment reforms initiated by the Trump administration. So far, the government has not specified when these pauses will end.

The U.S. government is currently pushing over 7 million borrowers to exit the SAVE plan. Many borrowers have reported that their monthly bills have increased after the adjustments and are concerned that if they default, they may face garnishments of their wages and federal benefits.

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