Skip To Content
September 15, 2023

Dems Reintroduce Bill to Shield Social Security Payments from Garnishment

Credit: 401K Specialist

Legislation that would restore federal protections of Social Security benefits to prevent the federal government from garnishing them for the repayment of all non-tax federal debt—such as student loans—was reintroduced on Capitol Hill Thursday by Democrats.

The bill, the Protection of Social Security Benefits Restoration Act, was introduced by Senate Finance Committee Chairman Ron Wyden (D-OR) in the Senate and by Reps. John Larson (D-CT), Ranking Member of the House Ways and Means Subcommittee on Social Security, and Raúl Grijalva (D-AZ) in the House along with six original cosponsors.

“It is plain wrong to take away the Social Security benefits seniors earned through a lifetime of work because of the increasing burden of student loan debt,” Wyden said. “It’s past time Congress protects seniors and the Social Security benefits they have earned with every paycheck. That’s why I’m proud to reintroduce legislation that shores up protections for Social Security benefits and allows seniors in Oregon and nationwide to retire with the dignity they deserve.”

According to a Government Accountability Office report cited by the bill’s sponsors, at least 114,000 Americans have had their Social Security garnished because they could not make their student loan repayments. The same report found the number of retirees and people with disabilities whose Social Security benefits were seized by the government to pay off student loans increased more than five-fold between 2002 and 2016.

“Social Security is an earned benefit Americans have paid into their entire working lives, and garnishing these already-modest benefits to recover student loan debt hurts their ability to retire with dignity,” said Larson, who is also the author of the Social Security 2100 Act reintroduced in July with 177 democratic co-sponsors.

“With student loan debt payments resuming in October, it’s critical that we act now to protect the benefits seniors need to retire and live their lives with dignity,” Grijalva added.

The number of people age 60 and older who still have student loan debt has increased six-fold since 2004 to 3.5 million and the amount they owe is now 19-fold, amounting to more than $125 billion in student loans. More than 60% of older borrowers with outstanding student loan debt say they do not have enough savings to cover their expenses for three months in an emergency, and according to a survey by AARP 9% say their student loan debt has forced them to forgo medical care.

“For many, Social Security benefits are the only source of income they can depend on and it’s time we restore that certainty for seniors,” Grijalva said.

The law has traditionally protected Social Security benefits from garnishment for private debt and most types of federal debt. But in 1996, Congress enacted the Debt Collection Improvement Act, allowing garnishment of Social Security benefits for the repayment of federal non-tax debt, including student loans.

“We must restore the previous protections to ensure that the hard-earned benefits are there, and that seniors and those with disabilities are never reprimanded for getting an education,” Grijalva said.

Following the June Supreme Court decision to strike down President Biden’s student loan forgiveness plan, monthly payments for federal student loan holders are set to resume in October.

The reintroduced bill’s six original cosponsors include Reps. Jonathon Jackson (D-IL), Eleanor Holmes Norton (D-DC), Linda Sanchez (D-CA), Rashida Tlaib (D-MI) and David Trone (D-MD).

The Protection of Social Security Benefits Restoration Act is endorsed by the Alliance for Retired Americans, Strengthen Social Security Coalition, Social Security Works, National Committee to Preserve Social Security and Medicare (NCPSSM), AFL-CIO, Justice in Aging, the American Federation of Government Employees (AFGE), the American Federation of Teachers (AFT), National Organization of Social Security Claimant Representatives (NOSSCR) and the National Association of Disability Representatives (NADR).

The full text of the bill can be found here.