• The Education Department confirmed to BI that it's pausing Social Security garnishment for defaulted student loans.
• The department said it plans to resume offsets "sometime this summer."
• It is also still planning to garnish wages for defaulted borrowers this summer.

President Donald Trump is pausing one of the harshest consequences for student-loan borrowers who default on their debt.

On Monday evening, the Department of Education confirmed to Business Insider that it would be pausing Social Security garnishment for defaulted student-loan borrowers after restarting collections on May 5.

"The Department has not offset any social security benefits since restarting collections on May 5, and has put a pause on any future social security offsets," Ellen Keast, an Education Department spokesperson, told BI.

"The Trump Administration is committed to protecting social security recipients who oftentimes rely on a fixed income," Keast continued. "In the coming weeks, the Department will begin proactive outreach to recipients about affordable loan repayment options and help them back into good standing."

A notice posted to the Department of Education's debt resolution page also said that the department is "delaying offsets of these monthly benefits for a couple of months and plans to resume sometime this summer."

The notice added that the department still intends to resume wage garnishment "later this summer."

This announcement comes after a five-year pause that Trump started during the pandemic, halting negative credit reporting and collections on defaulted student loans. Linda McMahon, Trump's education secretary, said that collections would resume once again in an effort to restore accountability to the student-loan system.

"Borrowing money and failing to pay it back isn't a victimless offense. Debt doesn't go away; it gets transferred to others," McMahon wrote in a May opinion piece.

A federal borrower typically enters default after missing payments for more than 270 days. Those who are in default can rehabilitate their loans or consolidate their loans — both of which can be time-consuming — or file for bankruptcy.

Over 5 million borrowers are currently in default. The New York Federal Reserve recently found that the number of borrowers who moved into serious delinquency surged to 8.04% in the first quarter of 2024, meaning that millions more could enter default this summer.

Some student-loan borrowers previously told BI that they cannot afford to lose their Social Security income if they default on their debt.

"There will be no retirement. I'll die on the job," James Southern, a 63-year-old borrower, said. "Even if I were at my full retirement age, they'd garnish the Social Security, so I'm still going to have to work in order to survive."

Are you in default, or concerned about defaulting on your student loans? Share your story with this reporter at [email protected].

• Running out of money in retirement is a big concern for many Americans.
• Economic uncertainty is making it even harder to afford retirement.
• These are the top states where your retirement nest egg will go the furthest.

As people live longer and spend more time in retirement, it's more important now than ever to plan for life after your job.

To make matters even more complicated, the ongoing trade war has created a tricky economic backdrop for older Americans to retire in, causing people to delay their retirements, wait to collect Social Security, or "unretire" and go back to work.

That's why being smart about where you live in your golden years can have far-reaching consequences, as housing costs — whether it be a mortgage, property taxes, or rent expenses — are typically the largest part of your monthly expenses.

Financial technology company Remitly compiled data on Americans' retirement savings across the country. How much you need in retirement varies, but the rule of thumb is that by the time you retire, you should aim to have around 10 times your salary saved. Remitly found that Americans between the ages of 55 and 64 have typically saved an average of $537,650 and a median of $185,000 — meaning there's high variability in the amounts that people have saved.

When calculating how much money you need for a comfortable retirement, take into consideration annual expenditures such as housing, utilities, transportation, and healthcare — and also factor in an additional 20% buffer for unexpected costs.

Depending on the state you retire in, the cost of living could fluctuate wildly. Remitly looked at the average retirement savings and expected annual expenditures for a comfortable retirement for each state to calculate how long a retirement nest egg lasts in different parts of the country.

While the annual expenditure to retire comfortably in many states hovered in the $60,000 to $80,000 range, a few states took the cake for sky-high costs of living. In Hawaii, Remitly found the average annual expenditure to be $129,296. California was the second-most expensive state, with annual retirement expenditures coming out to $100,687. In those states, retirement savings will only last 2.8 and 4.5 years, respectively.

On the other hand, Kansas takes first place for sustainable living costs in retirement — retirement savings last 7.5 years on average there.

Listed below are the top ten states where retirees can get the most bang for their buck. The average amount of savings at the time of retirement, the annual retirement expenditures, and number of years the retirement savings will last are also included.

Kansas

Average retirement savings: $452,703
Annual expenditures: $60,620
Years of comfortable retirement: 7.5 years

Iowa

Average retirement savings: $465,127
Annual expenditures: $62,565
Years of comfortable retirement: 7.4 years

Minnesota

Average retirement savings: $470,549
Annual expenditures: $65,828
Years of comfortable retirement: 7.1 years

Virginia

Average retirement savings: $492,965
Annual expenditures: $70,342
Years of comfortable retirement: 7 years

Pennsylvania

Average retirement savings: $462,075
Annual expenditures: $66,384
Years of comfortable retirement: 7 years

Illinois

Average retirement savings: $449,983
Annual expenditures: $64,787
Years of comfortable retirement: 6.9 years

Connecticut

Average retirement savings: $545,754
Annual expenditures: $78,605
Years of comfortable retirement: 6.9 years

South Dakota

Average retirement savings: $449,628
Annual expenditures: $64,856
Years of comfortable retirement: 6.9 years

Michigan

Average retirement savings: $439,568
Annual expenditures: $63,745
Years of comfortable retirement: 6.9 years

Kentucky

Average retirement savings: $441,757
Annual expenditures: $64,301
Years of comfortable retirement: 6.9 years