Trump administration to resume wage garnishment for student loan defaulters

Borrowers to receive wage garnishment notices starting January 7, Department of Education confirms.Published On 23 Dec 2025The administration of United States President Donald Trump says it will begin garnishing wages from some borrowers who have defaulted on their student loans, marking the first time the federal government has taken such action since the onset of the COVID-19 pandemic.Affected borrowers will begin receiving notices on January 7, a Department of Education spokesperson told Al Jazeera on Tuesday.Recommended Stories list of 4 itemslist 1 of 4Trump pauses more offshore wind projects citing national security concernslist 2 of 4US wants to sell GM soya and corn to India, farmers warylist 3 of 4UPS stumbles into holiday season amid shifting trade ruleslist 4 of 4Canada names new ambassador to US as key trade talks loomend of listThe policy is expected to initially impact about 1,000 borrowers, and the number is to grow over time.“The notices will increase in scale on a month-to-month basis,” the spokesperson said.Al Jazeera asked the department for clarification on how borrowers were selected for the first round of garnishments, how many additional people may be affected and the rationale behind those decisions.The agency did not clarify but said collections are “conducted only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans”.Under federal law, the government may garnish up to 15 percent of a borrower’s take-home pay as long as the individual is left with at least 30 times the federal minimum wage per week. The federal minimum wage is currently $7.25 an hour, a rate that has remained unchanged since July 2009.About one in six American adults holds student loan debt, which totals about $1.6 trillion. As of April, more than 5 million borrowers had not made a payment in at least a year, according to the Education Department.The garnishments are planned as economic pressure mounts for many Americans amid rising prices and a cooling labour market. According to consulting firm Challenger, Gray & Christmas, more than 1.1 million people lost their jobs in 2025 as job growth slowed. Federal data also showed mixed employment trends in recent months with job losses reported in October followed by modest gains in November.