Trump pauses on social security benefits on default student loans

The United States Ministry of Education interrupt its plan to garnish people’s social security services if they have failed on their student loans, a spokesman for the agency told CNBC.

“The Trump administration has undertaken to protect the beneficiaries of Social Security who are often based on a fixed income,” said Ellen Keast, spokesperson for the Department of Education.

Development is a brutal change in policy by the administration.

The Trump administration announced on April 21 that it would resume the collection activity on the $ 1.6 billion student loan portfolio in the country. For almost half a decade, the government did not take those who had lagged behind in the cocvid era policies.

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The federal government has extraordinary collection powers on its student loans and can seize the tax reimbursements of borrowers, payroll checks and retirement and social security disability services. Social security beneficiaries can see their checks reduced up to 15% to reimburse their default student loan.

According to the financial consumer, more than 450,000 borrowers of federal student loans are in default of their student loans and likely to receive social security services, according to the Consumer Financial Protection Bureau.

The suspended administration gives students the older borrowers who have been lacking on their debt for more time to try to update themselves and to avoid checking reduced advantages.

Carolina Rodriguez, director of the Assistance Consumer Assistance Program in New York, recently told CNBC that she was particularly concerned about the consequences of the collections taken up on retirees.

“The loss of part of their social security services to reimburse student loans may mean that it does not have enough for food, transport to medical meetings or other basic necessities,” said Rodriguez in an interview in April.