Many New Yorkers Will Lose Tax Refunds & Social Security

New Yorkers expecting their tax refunds or social security benefits may be in for a total shock! I hate to be the bearer of bad news, but many New York residents will be in for a very rude awakening soon. Some New Yorkers will have money garnished from their paychecks. Under the Trump regime, the U.S. Department of Education has reignited its collection efforts on student loans. New Yorkers who defaulted on their school debts could face garnishments this year. Collections have been paused since the COVID-19 pandemic.

Under Trump's first term, in March of 2020, borrowers were protected from normal collection activities. The temporary relief officially ended in October of 2024. However, President Biden decided not to pursue any involuntary collections before the end of his term, leaving the decision to restart collections up to Trump.

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Due to these reignited collection activities, some New Yorkers may not receive their tax returns or their social security benefits. As the economy comes crashing down, some people will have no grace or consideration for their financial situation.

An educated population helps New York and America compete in the global economy. I know there is some pushback to globalism, but it is decades too late. It won't stop just because America refuses to participate.

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As someone who has had to pay off my student loans, in full, with no forgiveness, I understand the pain New Yorkers are going through. Even though I paid my loans without help, I am not opposed to people getting help with their loans (I guess I'm just not a misery loves company type of person).

The Department of Education, under Trump's direction, announced that it will begin collecting on defaulted student loans on Monday, May 5, 2025. Many New Yorkers are struggling with high grocery prices, job cuts, failing 401Ks, and an overall bad economy in 2025. Now, student loan borrowers will be responsible for paying back their student loans, regardless of any circumstances that make it difficult. This money can and will come from tax returns and social security benefits that are available.

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According to Business Insider,

"Starting in May, the Federal Student Aid office will restart the Treasury Offset Program, which withholds government benefits, including Social Security and tax refunds, from people with past-due payments. After 30 days, the Treasury Department would start garnishing wages for defaulted borrowers."

Thankfully, leadership in NY is working hard to make higher education affordable or free so that we can be at the forefront of the new digital world. Governor Kathy Hochul is offering a free community college education to adults in New York.

New Yorkers who owe money on their student loans and enjoyed the pandemic-era benefits Trump put in place will now have to face the music!

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