wage

Borrowers to receive wage garnishment notices starting January 7, Department of Education confirms.

The administration of United States President Donald Trump says it will begin garnishing wages from some borrowers who have defaulted on their student loans, marking the first time the federal government has taken such action since the onset of the COVID-19 pandemic.

Affected borrowers will begin receiving notices on January 7, a Department of Education spokesperson told Al Jazeera on Tuesday.

The policy is expected to initially impact about 1,000 borrowers, and the number is to grow over time.

“The notices will increase in scale on a month-to-month basis,” the spokesperson said.

Al Jazeera asked the department for clarification on how borrowers were selected for the first round of garnishments, how many additional people may be affected and the rationale behind those decisions.

The agency did not clarify but said collections are “conducted only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans”.

Under federal law, the government may garnish up to 15 percent of a borrower’s take-home pay as long as the individual is left with at least 30 times the federal minimum wage per week. The federal minimum wage is currently $7.25 an hour, a rate that has remained unchanged since July 2009.

About one in six American adults holds student loan debt, which totals about $1.6 trillion. As of April, more than 5 million borrowers had not made a payment in at least a year, according to the Education Department.

The garnishments are planned as economic pressure mounts for many Americans amid rising prices and a cooling labour market. According to consulting firm Challenger, Gray & Christmas, more than 1.1 million people lost their jobs in 2025 as job growth slowed. Federal data also showed mixed employment trends in recent months with job losses reported in October followed by modest gains in November.

In the months of October and November, the unemployment rate increased to 4.6 percent, the highest since 2021, according to the US Department of Labor’s Bureau of Labor Statistics.

“Families are being forced to choose between paying their bills and putting food on the table. The Trump administration’s decision to begin garnishing wages takes even that meagre choice away from student loan borrowers who are living on the brink,” Julie Margetta Morgan, former deputy undersecretary at the Education Department under former President Joe Biden, told Al Jazeera.

“Instead of solving the affordability crisis that’s leaving Americans unable to pay their student loans, the president is further punishing families and forcing them to forgo the very basics.”

In addition to wages, the federal government has the authority to garnish income from tax refunds, Social Security benefits and certain disability payments.

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.”