Attention Retirees! 15% of Your Social Security May Be Withheld in June If You Owe Student Loans

• The U.S. government began enforced collections for overdue student loan debt on May 5.
• Tax refunds and federal payments may be withheld.
• Starting this summer, wage garnishments for student debt will begin.

Millions of Americans are once again facing pressure from federal payment obligations.

The restart of student loan collections marks a sharp shift after five years of pause.

This measure disproportionately affects Latino communities, Black communities, and low-income households.

The financial and emotional toll of student debt is becoming increasingly evident.

Automatic Collections and Immediate Consequences for Social Security Benefits

According to El País, as of May 5, the Department of Education resumed automatic collections for loans with overdue payments.

This allows the government to withhold any tax refunds or federal payments owed to the borrower.

Social Security benefits may be garnished up to 15% starting in early June.

During the summer, notifications will be sent to initiate direct wage garnishments.

Are Your Student Loan Payments Overdue? Here’s What You Need to Know

If you have student loans that are 270 days or more past due, your debt is considered in default.

Five million people will receive a letter from the Default Resolution Group.

This group can help you rehabilitate your credit and avoid more severe consequences.

However, failing to respond or ignoring the notice could result in your full loan balance becoming immediately due.

Serious Impact on Your Credit History

Defaulting on your loans damages your credit score and limits your access to other types of credit.

It can also make it harder to rent a home or be approved for credit cards.

Even if you make partial payments, the damage to your credit history can last up to seven years.

Resolving the issue in time is key to protecting your long-term financial stability.

How Student Loan Default Can Affect Everyday People

Many Latino workers live paycheck to paycheck and already face high living costs.

Wage garnishment or the loss of tax refunds will worsen their situation if they don’t act quickly.

Student debt doesn’t just impact personal finances—it also affects mental health and family planning.

Contacting the Department of Education or a free financial advisor is essential to understand your repayment options.