Economy|EducationTrump administration to resume wage garnishment for student loan defaultersBorrowers to receive wage garnishment notices starting January 7, Department of Education confirms.
The United States federal government has announced it will commence wage garnishment for select borrowers who have defaulted on their student loans. This measure marks the first implementation of such actions since the onset of the COVID-19 pandemic.
The United States federal government has announced it will commence wage garnishment for select borrowers who have defaulted on their student loans. This measure marks the first implementation of such actions since the onset of the COVID-19 pandemic.
Notices regarding this policy will be distributed starting on Tue, Jan 7, 2025. Initially, approximately 1,000 borrowers are expected to be impacted, with a gradual increase in the number of affected individuals over time.
According to federal regulations, up to 15 percent of a borrower's take-home pay can be garnished, provided the remaining income is not less than 30 times the federal minimum wage per week. The current federal minimum wage stands at $7.25 per hour, unchanged since Jul 2009.
The United States federal government has announced it will commence wage garnishment for select borrowers who have defaulted on their student loans.
The decision to initiate garnishments occurs amid rising economic pressures, including increased prices and a cooling labor market. In 2025, over 1.1 million individuals lost their jobs, and the unemployment rate rose to 4.6 percent, the highest since 2021, according to the US Department of Labor's Bureau of Labor Statistics. These developments reflect mixed employment trends during recent months, with job losses in October followed by moderate gains in November.
Beyond wage garnishment, the federal government is authorized to garnish income from tax refunds, Social Security benefits, and certain disability payments.
Based on reporting by Al Jazeera.