Wyden, Merkley, Colleagues Call on Biden Administration to Stop Withholding Social Security Payments to Pay Defaulted Student Loans

Wyden, Merkley, Colleagues Call on Biden Administration to Stop Withholding Social Security Payments to Pay Defaulted Student Loans

Washington, D.C. - U.S. Senators Ron Wyden (D-Ore.) and Elizabeth Warren (D-Mass.), today led colleagues including U.S. Senator Jeff Merkley (D-Ore.) in calling on the Social Security Administration, the U.S. Department of the Treasury, and the U.S. Department of Education to end the practice of offsetting Social Security benefits to pay off defaulted student loans.

Offsets under the Treasury Offset Program (TOP) are particularly devastating for seniors and people with disabilities who rely on Social Security as their sole source of income. The practice can withhold up to 15 percent of monthly Social Security or disability benefits for those who have defaulted on their federal student loans, further driving people who rely on their monthly payments toward poverty.

"As a growing number of older Americans have federal student loan debt when they near or enter retirement age, we are concerned that these older borrowers are disproportionately subject to TOP collection," wrote the lawmakers. "These borrowers who have struggled with their student loan repayment progress could see their wages, tax refunds, and Social Security checks garnished or offset."

"Offsetting Social Security benefits can push beneficiaries closer to-or even into-poverty, undermining the Social Security Act's mission of providing for 'the general welfare,' basic economic security, and the well-being of vulnerable Americans," the lawmakers wrote. "Accordingly, we urge you to explore exempting Social Security retirement, survivor, and disability benefits from administrative offset due to student loan debt."

Roughly 44 percent of borrowers who were 50 years and older at the time of their initial offset were subject to this maximum Social Security benefit withholding.

Additionally, the lawmakers said there is little evidence that these offsets are a meaningful solution to collecting outstanding debt. Almost a third of borrowers 50 and older who had offsets lasting five years or longer had their loan balances increase during this time period with the majority of the offsets applying solely to fees and interest and few paying down principal on the loans.

The letter was led by Wyden and Warren, along with U.S. Representatives Ayanna Pressley (D-Mass.), Pramila Jayapal (D-Wash.), Raúl Grijalva (D-Ariz.), and John Larson (D-Conn.). Along with Wyden and Merkley, the letter was also signed by Senators Richard Blumenthal (D-Conn.), Laphonza Butler (D-Calif.), Mazie Hirono (D-Hawai'i), Edward J. Markey (D-Mass.), Alex Padilla (D-Calif.), Bernie Sanders (I-Vt.), Brian Schatz (D-Hawai'i), Tina Smith (D-Minn.), Chris Van Hollen (D-Md.), Peter Welch (D-Vt.), and Sheldon Whitehouse (D-R.I.). In the House, the letter is also signed by Representatives Alma Adams (D-N.C.), Becca Balint (D-Vt.), Jamaal Bowman (D-N.Y.), Cori Bush (D-Mo.), Danny Davis (D-Ill.), Robert Garcia (D-Calif.), Sheila Jackson Lee (D-Tex.), Doris Matsui (D-Calif.), James McGovern (D-Mass.), Jerrold Nadler (D-N.Y.), Alexandria Ocasio-Cortez (D-N.Y.), Bill Pascrell (D-N.J.), Janice Schakowsky (D-Ill.), Grace Napolitano (D-Calif.), and Frederica Wilson (D-Fla.).

The text of the letter is here.