The Trump administration is moving to restart wage garnishment for Americans who have defaulted on their federal student loans, marking a significant shift after years of paused collections. Beginning January 7, the U.S. Department of Education will notify roughly 1,000 borrowers that the federal government intends to withhold a portion of their wages to recover unpaid debt. The action follows the end of pandemic-era relief policies that suspended enforcement measures.
The U.S. Department of Education confirmed Tuesday that collection activity will resume for borrowers who have been in default for at least 270 days. Wage garnishment authority has existed for decades, but enforcement was placed on hold during the coronavirus pandemic in 2020. The administration argues that resuming collections is necessary to restore accountability and protect taxpayers.
Under federal law, the government can seize up to 15 percent of a borrower’s after-tax income to repay defaulted student loans. Borrowers must still be left with a minimum weekly income equal to 30 times the federal minimum wage, currently $217.50 per week. The policy applies only to federal student loans and does not require a court order.
Outstanding student loan debt in the United States now exceeds $1.6 trillion, held by more than 42 million Americans. According to ABC News, approximately 5 million borrowers are currently in default, meaning they have missed payments for at least nine months. Once a loan enters default status, it becomes eligible for mandatory collections, including wage garnishment, tax refund seizures, and offsets to Social Security or disability benefits.
The administration has framed the move as a return to fiscal responsibility after years of what critics describe as unchecked borrowing and repeated loan forgiveness proposals. Supporters argue that continued pauses and forgiveness efforts have encouraged irresponsibility while shifting the burden onto taxpayers who either repaid their loans or did not attend college.
Criticism has come swiftly from progressive advocacy groups. Persis Yu, deputy executive director of Protect Borrowers, labeled the policy cruel and accused the administration of ignoring what she described as an affordability crisis. Yu argued that the government should focus on expanding income-based repayment options rather than enforcing collections.
Conservatives counter that repayment programs already exist and that enforcing existing law is not punitive but necessary. Federal officials note that borrowers receive multiple warnings and opportunities to rehabilitate their loans before wage garnishment begins. Rehabilitation programs allow borrowers to exit default by making a series of agreed-upon payments.
President Donald Trump has repeatedly emphasized personal responsibility and the rule of law in federal lending programs. The resumption of collections aligns with his broader efforts to rein in federal spending and reverse policies enacted during the pandemic that expanded government intervention in the economy.
As notices are sent and enforcement resumes, the issue is expected to become a flashpoint in Washington, highlighting deeper divisions over higher education financing, federal authority, and taxpayer responsibility.
