Trump Admin to Begin Garnishing Wages for Defaulted Student Loans in January

"President Donald Trump's administration will start garnishing the wages of student loan borrowers in default beginning early next year, the U.S. Education Department said Tuesday. In an email, the department said it expects the first notices to be sent to roughly 1,000 borrowers in default the first full week of January and that the number of notices would increase each month. Wages could be garnished as early as 30 days after borrowers receive notice."

"The agency noted that collections activities would be conducted only after borrowers were given sufficient notice and the opportunity to pay back their loans. Persis Yu, deputy executive director and managing counsel for the advocacy group Protect Borrowers, blasted the decision as "cruel, unnecessary, and irresponsible" in a Tuesday statement. "As millions of borrowers sit on the precipice of default, this Administration is using its self-inflicted limited resources to seize borrowers' wages instead of defending borrowers' right to affordable payments," Yu added."

"The agency resumed collections for defaulted federal student loans in May, following a pause that started during the early weeks of the COVID-19 pandemic. As a consequence of defaulting on one's student loans, a borrower can have their wages garnished, and the "loan holder can order your employer to withhold up to 15% of your disposable pay to collect your defaulted debt" without being taken to court, according to Federal Student Aid, an office of the Education Department."

The Education Department will begin sending notices to borrowers in default about impending wage garnishment starting early January, with roughly 1,000 notices expected during the first full week and monthly increases thereafter. Wages can be garnished as soon as 30 days after receipt of notice. Collections activities will be conducted only after borrowers receive notice and an opportunity to repay. The agency resumed collections in May after a COVID-19 pause. Defaulted borrowers can have employers ordered to withhold up to 15% of disposable pay without court action. Advocacy groups criticized the move as harmful and misusing resources.

Read at Truthout