Trump administration prepares to resume student loan wage garnishment

The Trump administration is reportedly preparing to resume aggressive collection efforts against defaulted federal student loan borrowers, ending a pause that has lasted over six years since the COVID-19 pandemic emergency. The Department of Education is expected to collaborate with the U.S. Department of the Treasury and private debt collection agencies to implement these measures.

Under these administrative tools, the federal government can withhold up to 15% of a borrower's wages, intercept federal tax refunds, and offset federal benefits such as Social Security. Reports suggest that approximately 9.3 million Americans who are at least 360 days late on payments could be affected.

Borrowers facing these actions will receive an “offset” notice providing a 65-day deadline before garnishment begins. To avoid or halt these processes, borrowers have several legal options, including making nine consecutive monthly payments to move the loan out of default, completing five rehabilitation payments, or utilizing a direct consolidation loan to create a fresh start.