Trump Administration To Begin Garnishing Wages of Defaulted Student Loan Borrowers

Thousands of Americans will start 2026 receiving notices that their paychecks will be smaller as the government begins garnishing their wages to pay back their student loans. And the number will grow as the year progresses.The Education Department says it will resume garnishing wages for borrowers who are in default. The last time the federal government took such a step was nearly six years ago, before the beginning of the Covid-19 pandemic. The Education Department has the authority to take up to 15 percent of a borrower’s after-tax income to help pay down their debt, CNBC reported.Around 1,000 defaulted student loan borrowers will begin receiving notices of administrative wage garnishment the week of January 7, an Education Department spokesman tells the Sun. The number of notices that go out will increase on a month-to-month basis.More than 5 million borrowers are in default, according to the Education Department, which added that “many” borrowers have been in default for more than seven years. The number of borrowers in default could nearly double, as the department reported in April that there were 4 million borrowers who had not made a payment in up to 180 days. President Trump instituted a moratorium on defaulted student loan payments during the pandemic, and President Biden repeatedly extended the freeze on collection activity. In April, the secretary of education, Linda McMahon, said that her department would resume loan collections and criticized the Biden Administration for extending the freeze on collections.“The Biden Administration misled borrowers: the executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear,” Ms. McMahon said. She said the department will help borrowers “return to payment” for the “sake of their own financial health and our nation’s economic outlook.”

Trump Administration To Begin Garnishing Wages of Defaulted Student Loan Borrowers

Trump Administration To Begin Garnishing Wages of Defaulted Student Loan Borrowers

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