"WASHINGTON -- The Trump administration said on Tuesday that it will begin garnishing the wages of student loan borrowers who are in default early next year. The department said it will send notices to approximately 1,000 borrowers the week of January 7, with more notices to come at an increasing scale each month. Millions of borrowers are considered in default, meaning they are 270 days past due on their payments. The department must give borrowers 30 days notice before their wages can be garnished."
"In May, the Trump administration ended the pandemic-era pause on student loan payments, beginning to collect on defaulted debt through withholding tax refunds and other federal payments to borrowers. The move ended a period of leniency for student loan borrowers. Payments restarted in October of 2023, but the Biden administration extended a grace period of one year. Since March 2020, no federal student loans had been referred for collection, including those in default, until the Trump administration's changes earlier this year."
The administration will begin garnishing wages of federal student loan borrowers in default early next year, sending notices to about 1,000 borrowers the week of January 7 and scaling up monthly. Borrowers are in default after 270 days past due, and the department must provide 30 days' notice before garnishment. The administration resumed collections in May, ending the pandemic-era payment pause and collecting defaulted debt through withholding tax refunds and other federal payments. Payments restarted in October 2023 with a one-year grace extension, and past legal attempts to grant broad forgiveness were blocked by courts. Consumer advocates criticized the decision.
Read at ABC7 Los Angeles
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