logo
A person holding cash | Source: Pexels
A person holding cash | Source: Pexels

Trump Administration to Resume Wage and Benefit Garnishment for Millions of Defaulted Student Loan Borrowers

Edduin Carvajal
May 06, 2025
06:32 P.M.

The Trump administration will begin garnishing the wages of 5.3 million federal student loan borrowers in default later this summer, marking a significant escalation in collection efforts after a five-year pause.

Advertisement

The U.S. Department of Education announced Monday that it has resumed default-related collection activities, which had largely been suspended since March 2020 due to the COVID-19 pandemic. As part of this move, around 195,000 borrowers have already been notified that their federal benefits—including Social Security—may be garnished within 30 days.

A notebook with "Pay Debt" written on it | Source: Pexels

A notebook with "Pay Debt" written on it | Source: Pexels

“These borrowers could see their retirement checks seized by June,” the department stated. In addition to benefits, the Treasury Department will soon send notices about the garnishment of wages to millions more, with actions expected to begin in the coming months.

This policy shift contrasts sharply with the Biden administration’s focus on borrower relief during the pandemic. “Borrowers should pay back the debts they take on,” said U.S. Secretary of Education Linda McMahon in a video posted to X on April 22.

Advertisement

Experts have raised concerns about the abrupt and aggressive approach. Higher education analyst Mark Kantrowitz noted that a 30-day notice period is unusually short. “Offsets to retirement and disability benefits were historically a last resort,” he said, typically occurring only after a year of failed collection attempts.

A person holding cash | Source: Pexels

A person holding cash | Source: Pexels

Advocates are especially worried about the impact on older borrowers. “Losing a portion of their Social Security benefits to repay student loans could mean not having enough for food [or] medical appointments,” said Carolina Rodriguez, director of the Education Debt Consumer Assistance Program.

Borrowers are urged to contact the government’s Default Resolution Group to explore options such as income-driven repayment plans, loan rehabilitation, or deferment and forbearance programs.

Advertisement

Advertisement

Related posts