Tue Dec 23 20:37:31 UTC 2025: Summary:
The Trump administration will resume wage garnishment for defaulted student loan borrowers, starting January 7. The policy, paused during the COVID-19 pandemic, will initially affect around 1,000 borrowers, with that number increasing monthly. The Education Department says borrowers will receive sufficient notice and opportunity to repay before garnishment, which can take up to 15% of take-home pay. This move comes amid rising economic pressures, with concerns raised about the burden on families already struggling with rising prices and a cooling job market.
News Article:
Trump Administration to Resume Wage Garnishment for Student Loan Defaulters
Washington D.C. – The Trump administration has announced it will restart wage garnishment for borrowers who have defaulted on their federal student loans, effective January 7. This marks the end of a pandemic-era pause on such collections.
The Department of Education confirmed that initial notices will be sent to approximately 1,000 borrowers, with the number of affected individuals expected to grow each month. The department claims that collections are “conducted only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans.”
Under federal law, the government can garnish up to 15% of a borrower’s take-home pay, provided the individual retains at least 30 times the federal minimum wage per week.
The decision to resume wage garnishment comes at a time when many Americans are facing economic hardship. Rising prices, combined with recent job losses and an increase in the unemployment rate, are putting a strain on household budgets.
Critics argue that the policy will further burden families already struggling to make ends meet. “Families are being forced to choose between paying their bills and putting food on the table,” said Julie Margetta Morgan, former deputy undersecretary at the Education Department. “The Trump administration’s decision to begin garnishing wages takes even that meagre choice away from student loan borrowers who are living on the brink.”
With over $1.6 trillion in outstanding student loan debt held by one in six American adults, the resumption of wage garnishment is expected to have a significant impact on a considerable portion of the population.
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