Student Loan Forgiveness Advocates rally outside of Supreme Court of the United States. (Kent Nishimura / Los Angeles Times via Getty Images)
WASHINGTON - The Department of Education will begin garnishing wages from borrowers who have defaulted on federal student loans starting in January.
Dig deeper:
The Trump administration announced in May that it would resume collections on defaulted federal student loans — including wage garnishment and the seizure of Social Security benefits — ending a pause that has been in place since 2020. The government stopped referring federal student loans to collections in March 2020 at the onset of the COVID-19 pandemic.
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Administration officials now say wage garnishment will begin in early January, after giving student and parent borrowers advance notice and time to make arrangements to repay their debts. Under federal law, the government can order employers to withhold up to 15% of a worker’s after-tax wages to apply toward unpaid student loans.
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What they're saying:
"We can confirm that administrative wage garnishment will begin early next year," The Department of Education said in a statement to FOX Television Stations. "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."
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"All FSA 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."
The other side:
Meanwhile, Democrats have moved to block the Trump administration from garnishing wages for student loan borrowers. After the administration announced in May that it would resume collections, Rep. Ayanna Pressley, D-Mass., along with Sens. Elizabeth Warren, D-Mass., and Cory Booker, D-N.J., introduced legislation that would halt the Department of Education’s authority to seize wages, tax refunds, Social Security payments and other federal benefits.
"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."
What's next:
Meanwhile, President Donald Trump has pushed to overhaul — and potentially eliminate — the Department of Education, proposing that its responsibilities be transferred to other federal agencies. Trump has suggested that, if the department were dissolved, student loan oversight could be shifted to the Department of the Treasury.
The Source: The information in this story comes from a statement provided by the U.S. Department of Education to FOX Television Stations, prior announcements by the Trump administration about resuming student loan collections, and existing federal law governing debt collection. FOX News contributed to this report. This story was reported from Los Angeles.