WAGES MAY BE GARNISHED FROM SOCIAL SECURITY TO COLLECT STUDENT LOANS

Washington – After a five-year suspension, the federal government has officially resumed involuntary collections on defaulted student loans beginning today, marking a significant shift in how the nation addresses educational debt.

Starting May 5, borrowers who have fallen into default now face wage garnishment, tax return interception, and the withholding of Social Security benefits—enforcement mechanisms that have been suspended since March 2020 when the COVID-19 pandemic began disrupting the economy.

"The Trump administration has clearly indicated that additional debt forgiveness programs are not forthcoming," said financial policy experts familiar with the situation. Congressional Republicans are simultaneously pushing for an overhaul of the student loan repayment system.

For millions of borrowers who have never experienced these enforcement measures, the change represents uncharted territory. According to Aissa Canchola Bañez, policy director at the Student Borrower Protection Center, "The resumption of involuntary collections will be catastrophic for those unable to keep up with their loans. We're seeing the people who can least afford it being penalized with this change."

How Default Works

Student loan borrowers enter delinquency after missing payments for 90 days, which negatively impacts credit scores. After 270 days of missed payments, loans enter default status, triggering more severe financial consequences.

Education Department officials have confirmed that defaulted borrowers will receive a mandatory 30-day notice before wage garnishment begins. Federal regulations permit garnishment of up to 15 percent of a person's paycheck to satisfy defaulted loans.

Education Secretary Linda McMahon defended the resumption of collections: "American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies. The Biden Administration misled borrowers: the executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear."

Resources for Struggling Borrowers

Financial advisors are urging affected borrowers to immediately contact their loan provider, consider income-driven repayment plans, and explore loan consolidation options.

"Consumers are searching for assistance and help and aren't quite sure what to do," said Rochelle Gorey, founder and CEO of Spring Four, a financial health firm. "They can't solve this problem on their own."

Gorey emphasized the importance of seeking legitimate assistance: "We're helping direct people to food savings, utility and heating resources, financial counseling, and ways to reduce household expenses to create more cash flow for outstanding debt."

Departmental Changes and Congressional Action

The enforcement restart comes amid significant changes at the Department of Education, which has recently reduced its workforce by half and faces potential elimination under the Trump administration. Despite these reductions, the agency maintains it can fulfill its legal obligations.

Julie Morgan, former deputy under secretary at the Education Department, expressed concern: "They fired all the people overseeing the student loan providers, who have an abominable track record on serving their borrowers." During her tenure, Morgan noted widespread problems with providers failing to answer calls, leaving borrowers on hold for hours, and delaying enrollment in payment plans.

Meanwhile, House Republicans recently introduced budget reconciliation text proposing to consolidate student loan repayment options into just two programs. This has alarmed some advocates who fear the streamlined plans could increase monthly payment amounts for many borrowers.

"Nobody is actually trying to solve the loan service problem," Morgan added, "and the Republicans in Congress are trying to make the plans less affordable. It's going to be extraordinarily difficult for borrowers to make their payments."