The Trump Administration will begin garnishing the wages of student loan borrowers whose current debt is in default, the Department of Education has announced.
Beginning on Jan. 7, the department will send out notices to approximately 1,000 defaulted borrowers informing them of their status, The Hill reports.
The upcoming action follows through on the administration’s vow to return to student loan repayments after a years-long pause during the COVID-19 pandemic and the Biden administration.
The federal government can garnish up to 15% of one’s wages if they are in default. However, the Education Department did indicate how much borrowers could expect to see deducted from their wages. In May, the agency warned student loan borrowers that there would be financial consequences for non-repayments, including blocked federal payments such as Social Security and tax refunds.
The Education Department stated that no wage garnishments would occur until student and parent loan borrowers were informed of their status and given sufficient time to take action. The Trump Administration has also made it clear that there would be no Biden-era student loan forgiveness, as seen in past years.
More than 5 million borrowers are in default, and only 38% of borrowers are current on their student loans.
Student loan advocates are slamming the move by the Trump Administration.
“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,” said Protect Borrowers Deputy Executive Director and Managing Counsel Persis Yu. “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.”
Black student loan borrowers faced significant barriers compared to other racial groups, including higher borrowing rates, greater debt accumulation, increased difficulty with repayment, and higher default rates. The student debt crisis has also exacerbated the racial wealth gap.
Borrowers who want to avoid default or wage garnishment can still apply for Income-Driven Repayment programs still offered by the Trump Administration. However, Yu of Protest Borrowers noted, “There are still nearly a million unprocessed Income-Driven Repayment applications, and this Administration has admitted to denying en masse borrowers who applied and requested the U.S. Department of Education’s help in accessing the most affordable payment option.”
She added, “During the last Trump Administration, hundreds of thousands had their wages improperly taken at the peak of the pandemic because the U.S. Department of Education was unable to control this tool. It is irresponsible to turn on a debt collection tool that the Administration cannot turn off.”
