Department of Education to garnish wages to pay for student loans
5.3 million borrowers who've defaulted on their student loans are at risk of having their wages garnished.
Next month, the Education Department plans to send the loans of around 5.3 million borrowers who’ve defaulted to collections. This marks the end of a period clemency stretching back to March 2020, in which the first Trump Administration instituted a pause on student loan collections in the wake of the COVID-19 pandemic.
Starting May 5, the department will begin involuntary collection by blocking social security benefits and tax refunds to impacted borrowers. Then, after 30 days, they will begin garnishing paychecks. Anyone who has missed payments on their student loans over a period of 9 months is at risk of having their loan sent to collections.
WWE mogul and Education Secretary Linda McMahon derided borrowers: “American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies.” The Trump Administration is framing the loan restart as righteous and just, as though borrowers are riding on the coattails of non-indebted Americans and that American taxpayers pay directly for students’ loans. The reality, by contrast, is that once collections begin, it’s not as though taxes will be dropped in tandem overnight, nor is it even particularly likely that most borrowers in collection will even be able to make their accounts whole.
Restarting student loans and sending them to collections will also have a deleterious effect on borrowers’ credit scores and disrupt their ability to subsist in other ways, such as creating inability to seek housing rentals or other necessary loans, such as medical debt. Most relevantly, the vast majority of these borrowers are taxpayers.
If you or someone you know is potentially going to be impacted by the resumption of student loan collections, consider reaching out to Debt Collective, a debtors union led by a team of qualified legal professionals. They have successfully helped abolish over $200 billion in student loan debt.