Is one group of Social Security beneficiaries in for some bad news this June? Well, according to the Social Security Administration (SSA), one group of beneficiaries may be facing a 15% benefit cut. Beginning as of next month, some retirees and disabled citizens may see a percentage of their Social Security benefits garnished by the federal government. The main reason for the loss of a percentage of their benefits is that the Treasury Offset Program (TOP) has begun its collection efforts after having slowed down and paused during the pandemic.
All about the Treasury Offset Program
Since the Treasury Offset Program has resumed as of May 5, 2025, it is important to know why this program is so important and who this program is affecting. Firstly, the core focus of this Treasury Offset Program is to enable the federal government to collect delinquent debts by either reducing or stopping federal payments. While Social Security is one federal fund affected, so too is citizens’ tax refunds.
This time around, the Treasury Offset Program will reduce certain citizens’ Social Security benefits by 15%, ensuring that benefits do not get reduced below $750 per month. The Department of Education is involved in this particular cut that will be calculated according to citizens’ Social Security amounts before deductions (the gross benefit amount).
According to the Department of Education, notices are generally sent out a month (30 days) in advance; however, this time around, some citizens may see their Social Security benefits being cut without receiving notices. This is because some of the notices may have been sent out before the upheaval of the COVID-19 pandemic. As of June, borrowers may face benefit cuts.
Student borrowers are being targeted for benefit cuts
This time around, the group of individuals affected is students who may have fallen behind on their student loan payments, and the number of Americans with student loan debt is growing.
As reported by Newsweek, 195,000 borrowers have been made aware that their Social Security benefits will be garnished. There are many more citizens who will still be contacted about garnishing. The need to cut Social Security benefits comes at a time when 2.9 million people aged 62 and older have federal student loans. This amount shows a 71% increase since 2017.
Many retirees have to face the consequences of having taken out student loans years before that weren’t settled. They may have to pay off loans taken out for their children and grandchildren that have increased due to the interest rate, penalties, and fees. Of course, the expected cuts have made citizens feel worried about running out of money in retirement.
The different views on cutting benefits for borrowers
The Treasury Offset Program in the Bureau of Fiscal Service sees the cut of Social Security benefits as a necessary step in getting operations in order. Certain advocacy groups, such as the Student Borrower Protection Center, feel that this is unnecessarily punitive.
However, borrowers may have a way to bypass these punitive measures. According to many financial experts, elderly citizens can reach out to loan servicers, among other options. Choosing income-driven repayment plans or deferments are some options available at Social Security recipients’ fingertips. Such plans will lower monthly payments considerably.
Nevertheless, for many citizens who do not reach out to loan servicers, they could see a cut in their Social Security payments from June. This would be a painful shift in the Treasury Offset Program’s duty resumption, as the policy will affect thousands of elderly Americans with student debts. While one group of Social Security beneficiaries was targeted with boosted payments in April, another group of beneficiaries will be targeted with reduced benefits this June.
