WASHINGTON — Millions of student loan borrowers who have fallen into default will soon face collection efforts, including wage garnishments, the U.S. Department of Education announced Monday.
Starting May 5, the department will resume aggressive tactics like seizing tax refunds, docking federal salaries, and garnishing wages to recover debts, ending a years-long pause that began during the COVID-19 pandemic. Roughly 5.3 million borrowers are currently in default, officials said.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” said Education Secretary Linda McMahon, under the Trump administration.
The move officially shutters the leniency period that stretched across the Biden administration, during which multiple attempts to enact widespread student loan forgiveness were blocked by courts. Payments resumed last fall, and borrowers who miss payments for nine consecutive months are placed into default — a status that damages credit and triggers collection.
Trump administration goes after student loan borrowers in default
The decision to restart collections sparked immediate backlash from advocates who say the government is punishing vulnerable families still struggling to recover.
“This is cruel, unnecessary and will further fan the flames of economic chaos for working families across this country,” said Mike Pierce, executive director of the Student Borrower Protection Center.
Confusion remains high among borrowers. Ongoing layoffs at the Education Department’s Federal Student Aid office have made it harder to get help, according to Kristin McGuire, executive director of Young Invincibles. She noted that new rules about income-driven repayment plans — including the SAVE Plan popularized under President Biden — have shifted multiple times in recent months.
What is loan rehabilitation?
“We can’t assume that people are in default because they don’t want to pay their loans,” McGuire said. “People are in default because they can’t pay their loans and because they don’t know how to pay their loans.”
Borrowers at risk of wage garnishment can avoid it by entering a loan rehabilitation program — but it’s a one-time lifeline that requires nine months of on-time payments, explained Betsy Mayotte, president of The Institute for Student Loan Advisors.
Even as the administration cracks down, Biden’s term has seen over $183.6 billion in student debt canceled for more than 5 million borrowers through targeted forgiveness initiatives.
Still, McMahon emphasized a shift toward stricter enforcement.
“Going forward, the Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law,” she said. “Helping borrowers return to repayment — both for the sake of their own financial health and our nation’s economic outlook.”
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