Trump administration's 'Cruel' move: Wage garnishment for student loan defaults starts soon
TOI GLOBAL DESK | TOI GLOBAL | Dec 24, 2025, 22:26 IST
Attention student loan borrowers: a new chapter begins as the Trump administration prepares to implement wage garnishment for those in default, commencing early next year. This change comes on the heels of the pandemic payment pause, affecting millions currently in default. Rest assured, notifications will be sent before any actions take place, marking a sharp turn from past leniency.
The Trump administration announced it will begin garnishing the wages of student loan borrowers in default early next year. This action follows the end of a pandemic-era pause on student loan payments and comes after previous collection activities like withholding tax refunds. The department will send initial notices to approximately 1,000 borrowers the week of January 7, with plans to increase the scale of these notices monthly.
Millions of borrowers are currently considered in default, meaning they are at least 270 days behind on their payments. Before wages can be garnished, the department is required to provide borrowers with 30 days' notice. Collection activities will only commence after borrowers have been given adequate notice and a chance to repay their loans.
This move marks a shift from a period of leniency for student loan borrowers. Payments on federal student loans restarted in October 2023, though the Biden administration had extended a one-year grace period. Since March 2020, no federal student loans, including those in default, had been referred for collection until the Trump administration's policy changes earlier this year.
The Biden administration had previously attempted to implement broad student loan forgiveness, but these efforts were ultimately blocked by the courts.
Persis Yu, deputy executive director for the Student Borrower Protection Center, expressed strong criticism of the decision to garnish wages. She stated that the department has not adequately assisted borrowers in finding affordable payment options.
“At a time when families across the country are struggling with stagnant wages and an affordability crisis, this administration's decision to garnish wages from defaulted student loan borrowers is cruel, unnecessary, and irresponsible," Yu said in a statement.
“As millions of borrowers sit on the precipice of default, this Administration is using its self-inflicted limited resources to seize borrowers' wages instead of defending borrowers' right to affordable payments.”
Millions of borrowers are currently considered in default, meaning they are at least 270 days behind on their payments. Before wages can be garnished, the department is required to provide borrowers with 30 days' notice. Collection activities will only commence after borrowers have been given adequate notice and a chance to repay their loans.
This move marks a shift from a period of leniency for student loan borrowers. Payments on federal student loans restarted in October 2023, though the Biden administration had extended a one-year grace period. Since March 2020, no federal student loans, including those in default, had been referred for collection until the Trump administration's policy changes earlier this year.
The Biden administration had previously attempted to implement broad student loan forgiveness, but these efforts were ultimately blocked by the courts.
Persis Yu, deputy executive director for the Student Borrower Protection Center, expressed strong criticism of the decision to garnish wages. She stated that the department has not adequately assisted borrowers in finding affordable payment options.
“At a time when families across the country are struggling with stagnant wages and an affordability crisis, this administration's decision to garnish wages from defaulted student loan borrowers is cruel, unnecessary, and irresponsible," Yu said in a statement.
“As millions of borrowers sit on the precipice of default, this Administration is using its self-inflicted limited resources to seize borrowers' wages instead of defending borrowers' right to affordable payments.”