Wage garnishment for defaulted student loans set to resume next year
Dec. 23 (UPI) — The U.S. Department of Education has signaled that next year it will resume garnishing wages of people who’ve defaulted on their student loans.
The change, reported by multiple news outlets, comes after a years-long respite on garnishment that began as a pandemic-era economic relief measure. The resumption follows other Trump administration efforts to recoup past-due student loan debt.
The department intends to notify about 1,000 borrowers who have defaulted on their debt that it will begin seizing parts of their paychecks, The Washington Post reported Monday. The initial notices will go out the week of Jan. 7, with more going out to borrowers each month, according to the paper.
Roughly 5.3 million borrowers have not made student loan payments, with many having fallen behind before the federal government stopped collecting on defaulted loans nearly six years ago, the Post reported.
A borrower is considered to be in default on their loan when they have not made a payment for more than 270 days. Up to 15% of their pay can be garnished as a result.
After returning to power earlier this year, the Trump administration has sought to undo Biden-era policies meant to ease the burden of student loans on borrowers. The department announced in April that it would again require defaulted borrowers to make payments on their loans and has sought to tighten rules for the Public Service Loan Forgiveness program.
The Trump administration has defended its approach, saying it’s holding irresponsible borrowers accountable for loans that have cost taxpayers billions.
However, the Student Borrower Protection Center criticized the department for resuming garnishments, saying the measure is used without oversight and has been used to unjustifiably seize wages from hundreds of millions during the pandemic.
“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,” Persis Yu, the group’s deputy executive director and managing counsel, 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.”
