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Posted on 12/23/2025 12:57:08 PM PST by Red Badger
Key Points
* The Trump administration will start garnishing the wages of student loan borrowers in default in early January, a spokesperson for the U.S. Department of Education confirmed to CNBC on Tuesday.
* More than 5 million student loan borrowers are currently in default, and that total could swell to roughly 10 million borrowers soon, the Education Department said earlier this year.
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The Trump administration will start garnishing the wages of student loan borrowers in default in early January, a spokesperson for the U.S. Department of Education confirmed to CNBC on Tuesday.
It will be the first time a portion of borrowers’ paychecks has been at risk since the beginning of the Covid pandemic, when collection activity was halted.
Starting the week of Jan. 7, the Education Department expects around 1,000 defaulted student loan borrowers to receive notices of administrative wage garnishment, the spokesperson said. After that, the number of notified borrowers will continue to increase.
The U.S. government has extraordinary collection powers on federal debts, and it can seize borrowers’ federal tax refunds, wages, and Social Security retirement and disability benefits.
The Education Department can seize up to 15% of a student loan holder’s after-tax income to put toward their debt. By law, borrowers must be left with at least 30 times the federal minimum hourly wage ($7.25) a week, which is $217.50, said higher education expert Mark Kantrowitz.
Student loan holders have been under pressure from a weakening labor market, a barrage of changes to the lending system and recent trouble accessing relief programs. More than 5 million student loan borrowers are currently in default, and that total could swell to roughly 10 million borrowers soon, the Education Department said earlier this year.
More than 42 million Americans hold student loans, and the outstanding debt exceeds $1.6 trillion.
To try and avoid wage garnishment, consumer advocates say student loan borrowers should contact the government’s Default Resolution Group and pursue a number of different avenues to get current on their loans, including signing up for loan rehabilitation.
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Fine, let the crimes continue.
Make sure to get those refunds before they are gone out the door.
The government should put a halt to government-backed student loans. Stop the madness.
After that, we can discuss debt restructuring for the idiots.
I didn’t even THINK to vote for this!
They ought to start seizing the endowments of the colleges and universities that exploited dumb 18-year olds for their student loan dollars.
I’m sure those with gender-studies and other victim-ology degrees are not included among the loan defaulters.
The government should put a halt to government-backed student loans. Stop the madness.
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if you do that the “higher education” industry will scream bloody murder. Lots of money involved. Why, they might have to become efficient and productive.
I have earplugs - Do It.
Do it.
I voted for this!
We will have to adjust our noise cancelling headphones to remove the whining we will hear. Whining from people who haven’t been paying for a long, long time.
The government doesn’t “start” their process with docking your pay. You have to ignore stuff for a while before that comes on the table.
To heck with the earplugs. I want to hear their pathetic lamentations.
Seizure?
Isn’t that perhaps the single most scary word in the government lexicon that doesn’t involve (direct/indirect) state-sanctioned murder?
I see this and I keep being reminded - that campaign promise to abolish the department of education is never going to be held. I say this with no happiness. They could ask Congress for abolish bill, but they choose not to.
I don’t advocate eliminating student debt at all. But the structure of some of it is just crazy. My daughter has several outstanding loans from undergrad and grad school. She’s never missed a payment and kept paying during COVID. She is the kind of person we “celebrate”, she pays her bills.
But, she got a bonus last year and wanted to pay down one of her “expensive” loans (she has them that go from like 6% to 13%.). Of course, you would want to pay down the higher rate first. The system would not let her. She had to pay the lower rate first, and the higher rate last.
That is some bullshit.
Once the schools get the tuition money, they don’t care what happens to the student. After all, someone has to pay for the bloated administrator salaries and billion dollar sports stadiums.
the education industry has pushed so many young people into college and often the students out of panic just start taking silly lightweight courses for low potential degrees....the debt is still there however.
Kill their credit score
GOOD!
Excellent! I’m tired of pay for their education. I paid for my own.
“The Education Department can seize up to 15% of a student loan holder’s after-tax income to put toward their debt. By law, borrowers must be left with at least 30 times the federal minimum hourly wage ($7.25) a week, which is $217.50, said higher education expert Mark Kantrowitz.”
This is, not surprisingly, poorly written. For those in Rio Linda it means they must be left with 30 hours x $7.25 / hour = $217.50 per week or $11.310 per year which is well below the poverty line thus making them a working ward of the state but soon not to be working at all and just a ward of the state. Not much the gooberment does makes sense. In fact, noting the gooberment does makes sense that I am aware of.
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