Social Security benefits are being reduced! Most citizens of the United States make use of the SSA benefits and the amount will change for the worse. Student loans will be key for this reduction because the new government believes you have a debt with the country and you have to give the money back in some way. This will mostly affect the elderly, but no beneficiary will be exempt.
The new government and its new strategies
In 2025, Donald Trump was elected President of the United States and he has been very strict when it comes to money issues. Trump has made some changes in the money management of the country because his goal is to save and get back the money some citizens owe, and student loans are key in this process.
What are these student loans?
Some people don’t have enough money to go to college, so students can ask for a loan from the government and pay it bit a bit. However, you should be careful not to let it go and create a debt.
When you cannot pay this loan, it becomes a default debt which means that the payments are delayed and you aren’t fulfilling your obligation to pay. This is more common than you think and some Americans are paying this debt for their whole lives.
Treasury Offset Program is back
The new government is willing to fulfill its goal of getting back every debt citizens owe to America, so Trump has reactivated the TOP (Treasury Offset Program). This program was suspended in 2020 because of the pandemic situation and the difficult moments citizens were going through. What is this program about? Well, this is in charge of taking the money you receive every month from the Social Security benefits to make you pay those default debts coming from student loans.
Will Social Security in retirement be affected too?
I am afraid they are. American citizens whose applications for the Social Security in retirement benefits have been approved and have a default debt, will experience a reduction in their monthly payments.These beneficiaries will see a 15% reduction each month until their debts are done.
However, every person is allowed to have a minimum of $750 per month to face the cost of basic needs.
There are some options for you to soften this situation
If you experience this reduction on your Social Security benefits and you want to avoid it or stop it, you have some options to apply for:
One of them is the Hardship Exemption which could be the solution to eliminate your debt forever, but you have to prove this reduction in your benefits will make things like paying for the rent or food impossible. The Loan Discharge is another option that also eliminates your debt in cases of permanent disability.
If you want your income to be taken into account, you can apply for the Income Driven Repayment and the government will make you pay less or even nothing depending on your income.
Last but not least, is the Fresh Start Initiative. This is the newest program which can get you out of the default status if you match the requirements.
Save the date of the reduction
People who were affected by this were sent a letter by the government warning about their situations in May. They will have 30 days to ask for help or claim, if they don’t answer the letter, the reduction will be included on their Social Security benefits from the 30th of June of 2025.
Whether you receive the letter or not, the best way to face these situations is to be informed. So, find professional help or go to the official website of the government to find your options and avoid getting your Social Security benefits taken from you.