Key insights
- The Treasury Department is resuming garnishments of Social Security benefits for defaulted student loans, potentially impacting disposable income for some beneficiaries. The Social Security trust fund is projected to be depleted by 2032-2034, potentially leading to benefit cuts. Future COLAs are projected around 2.8%, but the adequacy of the CPI-W as a measure of senior inflation is debated.
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From Social Security garnishments for defaulted student loans to solutions that would grow the program's funds, here is what you need to know about Social Security for April.
Last year, the Department of Education resumed collections on defaulted student loan debt after an almost five-year pause. If a defaulted borrower doesn't get their account current, the government can garnish their wages to make up for missed payments.
In many cases, Social Security benefits can be garnished for defaulted student loans. However, in June 2025, the Education Department paused Social Security garnishments until further notice.
This month, the Treasury Department began taking over student loan responsibilities. Treasury said one of its first actions would be resuming garnishments for all defaulted borrowers. That includes Social Security benefits.
The Treasury Department can withhold about 15% of a defaulted borrower’s Social Security benefits. After defaulting, borrowers receive a 30-day notice before garnishment begins.
The Senior Citizens League projects the 2027 COLA at 2.8%. That matches this year's increase, which lifted the average benefit by $56.
The Social Security Administration adjusts benefits each year to account for inflation. It uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) and compares year-over-year changes in the third quarter.
Many experts say the inflation index doesn't provide seniors with enough benefits, while others say it is too generous and drains the program’s funds.
The Congressional Budget Office recently said the program's main trust fund is set to run out in 2032.
If combined with the Disability trust fund, Social Security has until 2034. At that point, benefits would be cut by about 17%, and further deteriorate in the following years, according to an estimate from Penn Wharton Budget Model, a nonpartisan policy group at the University of Pennsylvania.
There are solutions to delay the funding shortfall, but they are going to cost you. Some include the following:
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