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If you are a retiree who receives benefits from Social Security, you may experience a garnishment of your payments. Millions of people depend on Social Security benefits to cover basic needs during their retirement, but now they are worried about a possible reduction in their payments because they have federal government debts – probably coming from
Federal Student Loans
. Why? Well, Donald Trump has decided to restart the garnishment process in which the Social Security Administration (SSA) and the Department of the Treasury, retain part of beneficiaries’ monthly payments to pay off debts. The reason behind this decision is that the government wants to reduce the public debt.
So, let’s see how thousands of retirees will be affected by the possible comeback of the Treasury Offset Program.
Federal Student Loan
The Federal Government of the U.S. gives different types of loans to help people pay for their education, start a business or recover from disasters. However, the most common one is the Federal Student Loan.
If you apply for this loan, you could be lent money from the government to help you with college or university tuition. This might seem wonderful, but you must pay the loan back later. They expect you, or the person who has taken full responsibility for the payment, to pay after you graduate or you stop going to school, but this is not the common thing and this is why so many American people are in debt.
What’s the problem with Social Security benefits?
When the COVID-19 happened, the government decided to stop retaining parts of the monthly payments of beneficiaries to give them a break having in mind the horrible situation the world was going through. However, Donald Trump’s Administration announced he would like to go back to the Treasury Offset Program, so that debtors pay the money back.
Millions of American people are beneficiaries from the SSA and are in debt because of Federal Student Loans, so if Trump’s desire becomes a reality, these people will be very affected.
The Treasury Offset Program
This is the name of the process we previously explained, the garnishment of the monthly payments American people receive from the SSA to pay their public debts. This program allows the government to retain 15% of what beneficiaries receive from the Social Security system, but they can’t leave you with less than $750 per month.
Do you receive
SSI (Supplemental Security Income)
? Don’t worry, the government can’t retain any amount from that benefit.
How do you know you will be one of the affected beneficiaries?
First of all, the government will send you a letter called ‘’Notice of Intent to Offset’’ notifying the garnishment process will start, which must be sent 30 days before they start retaining payments. From this point, they will automatically retained your monthly payments.
For how long? There’s not a fixed date. The garnishment will stop when the debt is over or when you start paying the debt on your own.
Why are they doing it now?
There’s no specific reason on why they are doing this now, but the government wanted to reactivate the Treasury Offset Program back in 2024, so this is not something new. The possible reason behind this decision is because the government has the right to obtain the money it was lent to students who haven’t finished paying their public debts.
Of course, every loan the government gives should be returned, but millions of Americans depend on these benefits to face the cost of basic needs. This is a difficult situation because with that amount of money the government can improve public services, but, on the other hand, millions of people will suffer on a daily basis. What do you think about this decision?
