A new report from the Center for Retirement Research at Boston College finds that Social Security beneficiaries who are delinquent on federal student loans could face a four to six percent drop in retirement income due to withheld benefits.
A pandemic pause put garnishments on hold for now, according to CNBC.com. But when collections are in effect, the reduction in annual Social Security benefits is about $2,500 on average, based on 2019 data, according to the CRR report.
About 2.7 million consumers ages 62 and up owed more than $107.3 billion in federal loans as of September, according to the U.S. Department of Education.
The average annual Social Security benefits at risk due to student loan delinquency is expected to increase to $2,594 for future beneficiaries — those currently aged 35 to 61 — up from $2,299 for current beneficiaries ages 62 and up based on 2019 data, according to the Center for Retirement Research. Read the full report.