The Social Security Administration will resume debt collection that had been on hold since March 2020 due to the pandemic.
SSA will now once again withhold payments from individuals who have unpaid debts to apply the funds toward the repayment of the defaulted loan — a process known as garnishment.
Before the pandemic, this impacted around 280,000 people with a collective debt balance of $2.7 billion, SSA said in a statement Thursday.
The process occurs through the Treasury Offset Program — administered by the Department of the Treasury’s Bureau of Fiscal Service — which is designed to collect delinquent debts owed to federal and state agencies by intercepting payments.
“Resuming collections through the Treasury Offset Program is a critical step in our commitment to being good stewards of taxpayer funds and ensuring the integrity of our programs,” Lee Dudek, acting commissioner of Social Security, said in the statement.
At the end of 2024, 2.8 million student loan borrowers age 62 and older owed a record $121.5 billion.
While it’s unclear how many older Americans have defaulted on their student loan debt, it’s expected that more than 9 million borrowers — or more than a quarter of the total outstanding — are currently behind on payments.
Prior to the suspension in March 2020, SSA had successfully collected almost $2 billion, according to the press release.
The programs also collect past-due debts from items such as unpaid child support payments that people owe to state and federal agencies. The Treasury can withhold a tax refund to delinquent debtors.
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