Big and bad news for those relying on Social Security benefits. After taking over for his second term, Donald Trump made a drastic change by dismantling the protection for student-loan borrowers, enforced by former President Joe Biden.
With this, many in need could be in massive financial trouble as the debt collection is also about to start this month, for those who have defaulted on their student loans.
The Education Department confirmed to MarketWatch that with this upcoming schedule, those on social security could witness a massive cut to their benefits, leaving them as little as $750. Previously, Biden had set the minimum monthly social security check at $1,883. It was set for defaulted student-debtors. With Trump administration’s new policy, many could be struggling.
These loan-borrowers could be getting a $750 a month, which is about $9,000 annually, or more than $6,000 lower than the federal poverty line. According to surveys, the number of defaulted debtors could be around 5 million, most of whom are now facing the looming risk of losing their Social Security and tax refunds.
Ellen Keast, the deputy press secretary at the Education Department, said, “The Biden Administration issued a policy memo just days before the inauguration, recognizing that their illegal student loan bailout had failed and issuing guidance that is not in line with the law.”
Keast wrote in an email that Trump admin’s drastic move is “to realign the portfolio and protect American taxpayers.” The Secretary of Education, Linda McMahon is also on board with this new move. She wrote to Wall Street Journal, that she believes that debtors should face the “hard truth” that student loans must always be paid back. McMahon added, “Borrowing money and failing to pay it back isn’t a victimless offense.”
Student loans are no different than a mortgage or rent for an apartment. If you agree to pay back these loans, then you must make payments, even if prices are high.https://t.co/08WGTFUEpo pic.twitter.com/c6d9dd1n6L
— Rand Paul (@RandPaul) May 12, 2025
However, the former President’s move was quite the opposite than the current. Biden wanted to protect the older and disable student-debtors by providing them sufficient Social Security Benefits. James Kvaal, the Biden-era undersecretary of education commented, “Available data suggest that these actions will effectively halt Social Security offsets for more than half of affected borrowers and reduce the offset amount for many others.”
He added, “As a result, many who receive Social Security, including older Americans and those receiving disability benefits, will be able to make ends meet while still being responsible for repaying their student loan debt.”
Kvaal also criticized the changes brought by Donald Trump. “There are people out there who went to school in the 1980s and were cheated by their college or weren’t able to complete their program, and they’re still struggling to repay what was initially a very small loan,” he lamented.
The former undersecretary of education added that the whole thing is “punishing them for having gone to college and tried to achieve some economic security for their families, at the cost of even basic security in old age.”
