Trump admin starts sending notices to student loan borrowers in default ahead of wage garnishment

The Trump administration is set to resume wage garnishment for federal student loan borrowers in default, with notices set to be sent to affected borrowers starting on Wednesday.Student loan borrowers in default were given a reprieve from wage garnishment under a pandemic-era pause on collections, which has since elapsed and allowed the garnishment process to resume.A Department of Education spokesperson told FOX Business that "we expect the first notices to be sent to approximately 1,000 defaulted borrowers the week of January 7, and the notices will increase in scale on a month-to-month basis."Borrowers who are in default could see up to 15% of their after-tax wages garnished, along with tax refunds and certain federal benefits, although a minimum weekly income is protected from garnishment. Wage garnishment continues until the defaulted loan is paid in full or removed from default.TRUMP ADMINISTRATION SERVES A FINAL BLOW TO END BIDEN'S SAVE STUDENT LOAN PROGRAMNotices to federal student loan borrowers in default are required to be sent 30 days before wage garnishment begins to give borrowers a chance to repay what they owe or otherwise contest the garnishment. The notices give borrowers the opportunity to enter into a voluntary repayment agreement, and to request a hearing to raise objections to the garnishment.At a hearing, borrowers can object to the existence, amount or enforceability of their debt; object on the grounds that garnishing 15% of disposable income would produce an extreme financial hardship; or seek a ruling on whether garnishment can be used at the current time if the borrower has been employed for less than 12 months after an involuntary separation from employment.STUDENT LOAN DELINQUENCY RATES HIGHEST IN 21 YEARS AS COVID MORATORIUM FADES AWAYConsumer advocates say that borrowers in default can avoid wage garnishment by contacting the federal government, requesting a hearing, or enrolling in loan rehabilitation or consolidation programs.Borrowers have the right to not be discharged from employment, refused employment, or subjected to disciplinary action due to the garnishment. They may also initiate legal action against an employer if such are taken against the borrower due to the garnishment.TRUMP ADMINISTRATION AGREES TO SPEED UP STUDENT LOAN FORGIVENESS UNDER NEW COURT DEALAdditionally, borrowers have the right to not have information about the garnishment provided to the employer beyond what is necessary to comply with the withholding order.Over 5 million federal student loan borrowers are currently in default, and Trump administration officials warn that figure could rise sharply as repayment programs are revised.GET FOX BUSINESS ON THE GO BY CLICKING HEREEducation Department data showed that as of June 2025, there were 5.3 million borrowers in default – which represented 7% of the $1.58 trillion portfolio of federal student loans.Weiter zum vollständigen Artikel bei FOX Business Weiter zum vollständigen Artikel bei FOX Business