For the last 85 years, Social Security has stood as a financial pillar for America's aging workforce. Since 2002, national pollster Gallup has been surveying retirees to gauge how important their Social Security income is to their financial health. Consistently, between 80% and 90% of all respondents note the reliance on this all-important payout to cover at least some portion of their expenses.
For the program's more than 69 million beneficiaries -- 52.6 million of which are retired workers -- nothing is more important than sustaining this payout and steadily increasing it through annual cost-of-living adjustments (COLAs) over time.
But for approximately 2,000,000 beneficiaries, their Social Security income is anything but guaranteed at the moment.
Due to two notable policy changes under President Donald Trump, select beneficiaries, including retired workers, may see their Social Security checks marginally, or meaningfully, reduced in the coming months.
President Trump delivering remarks. Image source: Official White House Photo by Andrea Hanks, courtesy of the National Archives.
New Trump administration policy targets delinquent federal student loan borrowers
According to the U.S. Department of Education, some 42.7 million Americans have taken on a collective $1.6 trillion in outstanding federal student loans, as of April 2025.
But what you might not realize is that, as of August 2024, nearly 3.59 million of these borrowers were aged 60 and above. Based on a January 2025 report from the Consumer Financial Protection Bureau, some 452,000 borrowers aged 62 and older that are likely receiving Social Security benefits were in default on their student loans -- and that's a potential problem.
President Trump and his administration have placed great emphasis on weeding out perceived fraud and making the federal government more efficient. Among the many things on the Trump administration's agenda is collecting on defaulted federal student loans. The U.S. Department of Education hasn't collected on defaulted student loans since March 2020; but this COVID-19 era pause is coming to an end.
Beginning as early as June 2025, Social Security beneficiaries who are in default on their federal student loans could see up to 15% of their monthly payout garnished until their federal student loan repayment is no longer in default. Note, this garnishment applies to all types of beneficiaries: retired workers, workers with disabilities, and survivor beneficiaries (which means the actual figure of Social Security beneficiaries in default may be larger than 452,000).
Furthermore, the 15% Social Security check garnishment is based on your total benefit. For instance, if your Medicare Part B premium is automatically deducted from your monthly payout, the 15% will be reduced from this prededuction figure.
The icing on the cake is that the Trump administration is somewhat expediting collection from delinquent federal student loan borrowers. Whereas warning letters concerning possible garnishment came 65 days in advance of such an event prior to the COVID-19 pandemic, the new warning letters offer just 30 days' notice prior to deductions commencing.
The one caveat to this 15% offset is that a beneficiary can't be left with less than $750 per month. If, for example, you receive $800 per month from Social Security and are delinquent on your federal student loan, the maximum that you would be garnished is $50 per month instead of 15%.
Image source: Getty Images.
Social Security clawbacks can affect roughly 1.5 million beneficiaries
The other major policy shift that has the potential to impact in the neighborhood of 1.5 million Social Security recipients is benefit clawbacks.
From time to time, the Social Security Administration (SSA) overpays beneficiaries. Sometimes this error is entirely the fault of the SSA. In other instances, it's due to a workers' disability status changing, or perhaps an unreported change/increase in income received. Regardless of the reason, this overpayment needs to be recouped by the SSA.
We lack complete numbers on how many Americans fall into this group, but in 2023, then-acting SSA Commissioner Kilolo Kijakazi told members of the House Ways and Means Committee that north of 1 million Social Security beneficiaries were overpaid in fiscal year (FY) 2022 -- the federal government's fiscal year ends Sept. 30 -- and more than 980,000 recipients received too much in benefits in FY 2023.
It's possible that some of the recipients Kijakazi referred to have repaid what they owed under the Joe Biden administration's 10% clawback rate -- a garnishment rate that was lowered from 100% during the pandemic. The SSA's Office of the Inspector General hasn't provided any updates on overpayments since FY 2023.
Thus, I'm making the conservative estimate that around three-quarters of these prior overpayments are still outstanding (about 1.5 million beneficiaries) given the substantially lower clawback rate during the Biden era. These roughly 1.5 million overpaid beneficiaries, coupled with the 452,000 federal student loan delinquencies, equates to approximately 2 million people at risk of seeing their Social Security checks reduced.
Prior to the pandemic, previous presidents, including Barack Obama and Donald Trump during his first term in the White House, featured 100% clawback rates. This allowed the entirety of a beneficiaries' Social Security check to be withheld until the overpayment was fully collected.
In March, the Trump administration, via the SSA, stated plans to reinstate this 100% clawback rate on overpayments for retired workers, workers with disabilities, and survivor beneficiaries. But in late April, the administration backed off this aggressive collection rate and settled on a 50% garnishment of benefits until the overpayment is satisfied.
While recovering all SSA overpayments would save the program about $7 billion over the coming 10 years, this new 50% recovery guideline has the potential to financially strap some of these roughly 1.5 million recipients who rely heavily on their Social Security income to cover their expenses.
