The Department of Education plans to begin garnishing wages for borrowers with defaulted federal student loans starting in January.
The administration said in May it would restart collections on defaulted federal student loans—including wage garnishments and the seizure of Social Security benefits—for the first time since 2020. Collections referrals were paused in March 2020 at the start of the COVID-19 pandemic.
Now, the administration says wage garnishment will begin in early January after borrowers are given advance notice and a chance to make payments. Wage garnishment allows the U.S. government to order employers to withhold up to 15% of an employee’s after-tax wages to be applied toward student loan debt.
“We expect the first notices to be sent to approximately 1,000 defaulted borrowers the week of January 7, and the notices will increase in scale on a month-to-month basis,” a Department of Education spokesperson told Fox News Digital. “All (Federal Student Aid) collections activities are required under the Higher Education Act of 1965 and Debt Collection Improvement Act of 1996 and conducted only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans.”
Democrats, meanwhile, have tried to block the move. After the May announcement that collections would resume, Rep. Ayanna Pressley, D-Mass., and Sens. Elizabeth Warren, D-Mass., and Cory Booker, D-N.J., introduced legislation that would suspend the Department of Education’s authority to garnish wages, tax refunds, Social Security checks, and other government benefits.
“No one should have their hard-earned wages, tax refunds, and Social Security checks seized by Donald Trump—and our bill would ensure they do not,” Pressley said in a statement in May. “The Trump Administration should not be in the business of picking the pockets of our most vulnerable borrowers, gutting the Department of Education or exacerbating the student debt crisis.”
In May, the administration said about 43 million borrowers held federal student loan debt, with an outstanding balance totaling $1.6 trillion.
Trump has also pushed to restructure—or eliminate—the Department of Education and move its responsibilities to other agencies. If the department were dissolved, he has suggested that an agency such as the Department of the Treasury could take over oversight of student loans.
