Wage Garnishment to Resume Over Student Loans

It's bad news for those in default on their student loans: The federal government is going to resume garnishing wages starting next month, reports the Washington Post. The first 1,000 notices will go out on Jan. 7, and the number of notices will increase monthly from there. The announcement from the Education Department brings to an end a relief program that began during the pandemic, notes the New York Times.

Roughly 5.3 million people had gone at least 360 days without making a payment on their federal student loans as of June 30, many of them in default even before the government halted collections nearly six years ago. The Trump administration already restarted seizing tax refunds and federal payments such as Social Security benefits in May. Wage garnishment is the next step. The department can take up to 15% of a borrower's disposable income until the loans are either repaid or brought out of default.

Education Secretary Linda McMahon has argued that Biden-era promises of loan relief encouraged unrealistic expectations, saying earlier this year that "the executive branch does not have the constitutional authority to wipe debt away." She has cast the renewed use of garnishment and other enforcement tools as a way to push borrowers back into regular repayment, "both for the sake of their own financial health and our nation's economic outlook."