The Trump administration has announced it will resume wage garnishment for millions of Americans who are in default on their federal student loans, according to The Associated Press. The U.S. Department of Education confirmed that starting May 5, 2025, the federal government will restart involuntary debt collection efforts—including garnishing wages, seizing tax refunds, and withholding federal benefits—after more than four years of pandemic-era relief.
According to federal data, roughly 5.3 million borrowers are currently in default. Under federal law, a loan enters default when payments have not been made for 270 consecutive days. Default status can lead to long-term damage to credit scores and trigger aggressive collection tactics.
Education Secretary Linda McMahon defended the administration’s decision, stating that prior relief measures—particularly those under President Joe Biden—had “gone too far.” McMahon cited the need to restore “legal and fiscally responsible management” of the federal student loan system. Under Biden’s administration, over $183 billion in student loan debt was forgiven for more than 5 million borrowers, a move that the Trump administration and conservative lawmakers have harshly criticized.
The resumption of garnishments follows the Supreme Court’s 2024 decision to strike down Biden’s broader student loan forgiveness plan. Borrowers now have 30 days from the May 5 start date to either get current on their payments or pursue options to prevent garnishment.
With fewer than 40% of federal student loan borrowers currently up to date on their payments, experts warn that the policy could trigger widespread financial distress. Borrowers are urged to explore available alternatives such as loan rehabilitation, income-driven repayment plans, or consolidation to avoid falling victim to collections.
