From next month, social security beneficiaries who have lagged behind their student loan payments faced 15% of the seizure of their payments.
Earlier this month, the Trump administration announced that default student loan borrowers will once again be subject to the long-term treasury shift program (TOP).
TOP is a process of collections that allows the federal government to retain money from payments such as tax reimbursements, federal wages, social security and other advantages to reimburse the debts due.
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TOP was suspended at the start of the COVVI-19 pandemic for borrowers of suffering student loans and was not reactivated throughout the Biden administration for this group.
According to Newsweek, TOP can compensate up to 15% of social security services to reimburse federal student loans, however, the service check cannot be less than $ 750.
In its announcement of May 5, the Ministry of Education (DOE) said that around 195,000 default student loans began to receive official 30 -day opinions from the Treasury Department on the use of TOP.
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The DOE indicated that the first monthly services controls subject to the gap are scheduled for early June, once the 30 -day notice window has passed.
At the end of the summer, the DOE added that “all 5.3 million default borrowers will receive a notice from the Treasury that their winnings will be subject to an administrative salary intercourse.”
There are approximately 2.9 million people at the national level of 62 years or more federal student loans at the beginning of 2025, CNBC reported, citing the data of the DOE.
A report by the Consumer Financial Protection Bureau from the beginning of January noted that 452,000 borrowers in this category are likely to undergo forced collections on their social security services.
This report also warned that forced collections “can push older borrowers into poverty, undergoing the objective of the social security program”.
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CNBC indicated that the 15% discrepancy is calculated from the total advantage before any deduction and that it encompasses both the security and invalidity services of social security.
Default borrowers who receive a leading notice from the DOE should also receive information about how to challenge the collections if they can prove that they are experiencing financial difficulties or have a waiting loan, added CNBC in its report.
