The Trump administration announced Tuesday that it will start garnishing the wages of student loan borrowers who are in default as early as next year, marking a decisive end to the pandemic-era pause on collections.
Wage Garnishment Plan
The Department of Education said it will send notices to roughly 1,000 borrowers the week of January 7, with additional notices expected each month as the program scales. The notices will identify borrowers who are 270 days past due, the threshold that classifies a loan as in default. The department emphasized that it will only begin garnishment after providing borrowers with sufficient notice and an opportunity to repay.
The plan follows a May change that ended the pause on student loan payments and began collecting on defaulted debt through withholding of tax refunds and other federal payments. That shift ended a period of leniency that had kept all federal student loans from being referred for collection since March 2020.
Legal and Procedural Requirements
Under federal rules, the department must give borrowers a 30-day notice before wages can be garnished. The notice period is designed to allow borrowers time to arrange repayment or seek alternative options. The department reiterated that it will not initiate collection activities until borrowers have received the required notice and have had a chance to address the debt.
The policy also reflects the department’s stated intent to “only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans.” This language underscores the procedural safeguards that the administration claims will accompany the new enforcement measures.
End of Pandemic Pause
Payments on federal student loans restarted in October 2023, but the Biden administration extended a one-year grace period for borrowers who had been affected by the pandemic pause. That grace period allowed borrowers to postpone payments without incurring default status. Since the pause ended, the Trump administration’s changes have re-enabled the collection of defaulted debt.
The transition from a pause to active collection has been a significant policy reversal. The Trump administration’s decision to resume collections on defaulted loans represents a departure from the lenient approach that had prevailed during the pandemic.
Attempts at Forgiveness
The Biden administration had attempted multiple times to offer broad forgiveness for student loans. Those efforts, however, were ultimately halted by court rulings that blocked the proposed forgiveness programs. The courts’ decisions reinforced the legal constraints on large-scale debt cancellation.
The contrast between the two administrations’ approaches-one pursuing forgiveness and the other enforcing collections-highlights the divergent policy priorities on student debt relief.
Criticism from Student Borrower Protection Center
Persis Yu, deputy executive director for the Student Borrower Protection Center, condemned the wage-garnishment decision. She said the department had failed to help borrowers find 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.”
Yu’s remarks reflect broader concerns that the wage-garnishment strategy could exacerbate financial hardship for borrowers who are already facing wage stagnation.
Key Takeaways
- The Trump administration will begin garnishing wages for defaulted student loan borrowers starting early next year, beginning with 1,000 notices in the week of January 7.
- Borrowers in default are those who are 270 days past due, and the department must provide a 30-day notice before garnishment.
- The policy reversal follows the end of a pandemic pause and a series of court-blocked forgiveness efforts by the Biden administration.
The announcement signals a renewed focus on enforcing collections on federal student loan debt, a move that has drawn sharp criticism from advocacy groups concerned about borrower affordability and financial stability.
