Trump White House plans to garnish wages of student loan borrowers

The Department of Education announced Monday that it will resume garnishing the wages of federal student loan borrowers. The program, known as “involuntary repayment,” was put on hold in 2020 in response to the COVID-19 pandemic.

About 5.3 million federal student loan borrowers are currently in default. They will be given 30 days to enroll in repayment plans before garnishment begins. In addition to salaries, tax refunds and Social Security benefits will also be subject to collection.

The change is a sharp departure from the Biden Administration, which made alleviating student loan debt a top priority. In a statement, Education Secretary Linda McMahon characterized those efforts as reckless and unfair.

“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” McMahon said. “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.”

This is not entirely accurate. The Secretary of Education can “compromise, waive, or release” federal student loan debt. This power has been used in the past to successfully wipe out debt for disabled people, defrauded students, and public service employees.

For many, the garnishing of wages comes at a perilous moment. Inflation continues to drive up the cost of basic necessities like groceries and housing. Economists expect President Donald Trump’s trade policies to exacerbate those price increases in the coming months and years.

The Debt Collective, an organization advocating for student loan forgiveness, says the resumption of wage garnishing will disproportionately affect lower-income earners.

“40% of people with student debt don’t have a college degree,” the group wrote on X  “So whenever we talk about people who defaulted on their loans, it’s usually people who are being paid at the level of a high school diploma recipient. This is a massive regressive tax on the low income [earners].”

A poll from March 2024 found that more than 50% of Millennial and Gen Z voters support partial or total student loan forgiveness.