“How the Offset Works
Under the Treasury Offset Program, authorized by the Debt Collection Improvement Act, the federal government may take up to 15% of a monthly Social Security check to collect defaulted federal student debt. Recipients are guaranteed to keep at least $750 per month, a floor Congress set in 1996 that has never been adjusted for inflation. In today’s dollars, that protection would be worth roughly $1,450 a month. Average annual household spending reached $78,535 in 2024.
The scale of this collection tool grew quietly. Beneficiaries hit by offsets rose from about 6,200 in 2001 to 192,300 in 2019, with annual collections climbing from $16.2 million to $429.7 million (inflation-adjusted). Nearly three-quarters of what is collected through these offsets goes to interest and fees rather than principal.”