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The Department of Education will begin garnishing wages of those with defaulted federal student loans starting in January.
The Trump administration announced in May that it would resume collections on defaulted federal student loans — including wage garnishments and seizure of Social Security benefits — for the first time since 2020. In March 2020 at the onset of the COVID-19 pandemic, the government paused referring federal student loans to collections.
Now, the Trump administration has said that it will introduce garnishing wages in early January after providing student and parent borrowers ample heads up to repay their debts. Garnishing wages means that the U.S. government is authorized to order employers to withhold up to 15% of their employees’ wages after taxes, which would contribute toward paying off their student loans.
“We expect the first notices to be sent to approximately 1,000 defaulted borrowers the week of January 7, and the notices will increase in scale on a month-to-month basis,” a Department of Education spokesperson told Fox News Digital. “All (Federal Student Aid) collections activities are required under the Higher Education Act of 1965 and Debt Collection Improvement Act of 1996 and conducted only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans.”
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Meanwhile, Democrats have sought to stop the Trump administration from garnishing wages for student loan borrowers. After the Trump administration announced in May it would resume collections, Rep. Ayanna Pressley, D-Mass., and Sens. Elizabeth Warren, D-Mass., and Cory Booker, D-N.J., introduced legislation that would suspend the Department of Education’s ability to garnish wages, tax refunds, Social Security checks and other benefits.
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“No one should have their hard-earned wages, tax refunds, and Social Security checks seized by Donald Trump—and our bill would ensure they do not,” Pressley said in a statement in May. “The Trump Administration should not be in the business of picking the pockets of our most vulnerable borrowers, gutting the Department of Education or exacerbating the student debt crisis.”
In May, the Trump administration said that approximately 43 million student borrowers had federal student loan debt, which translated to an outstanding federal student loan balance of $1.6 trillion.
Meanwhile, President Donald Trump has sought to overhaul and eliminate the Department of Education and shift its functions to other agencies. Should Trump successfully dissolve the Department of Education, he’s indicated that an agency such as the Department of the Treasury could oversee student loans instead.
Fox News’ Patrick Ward contributed to this report.
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