Trump administration to resume wage garnishment for student loan defaulters

The administration of US President Donald Trump announced that some borrowers who have defaulted on their student loans will begin receiving wages garnishes. This is the first time the government has done this since the COVID-19 pandemic started.

A Department of Education spokesman told Al Jazeera on Tuesday that affected borrowers would start receiving notices on January 7.

Around 1, 000 borrowers are anticipated to be affected by the policy initially, and this number will increase over time.

The spokesperson stated that “the notices will grow in size from month to month.”

Al Jazeera contacted the department for clarification on the selection of borrowers for the initial round of garnishments, the number of potential victims, and the justification behind those choices.

The organization did not provide more details, but it stated that collections are only conducted after student and parent borrowers have been given enough time to pay their loans.

As long as the borrower is paid at least 30 times the weekly minimum wage, the government is permitted to garnish up to 15% of the borrower’s take-home pay. The hourly rate has remained constant since July 2009, and the federal minimum wage is currently $7.25 per hour.

Student loan debt totaling about $1.6 trillion is held by roughly one in six Americans. More than 5 million borrowers, according to the Education Department, had not made a payment in at least a year as of April.

The garnishments are intended to relieve many Americans’ economic strain from rising prices and a sluggish labor market. More than 1.1 million people lost their jobs in 2025 as job growth slowed, according to consulting firm Challenger, Gray &amp, Christmas. Employment trends in recent months were mixed, according to federal data, with modest increases in November and job losses reported in October.

According to the Bureau of Labor Statistics of the US Department of Labor, the unemployment rate increased to 4.6% in the months of October and November, which is the highest rate since 2021.

Families are being forced to choose between putting food on the table or paying their bills. According to Julie Margetta Morgan, a former deputy undersecretary at the Education Department under former President Joe Biden, the Trump administration’s decision to begin garnishing wages, “the Trump administration has taken even that meager decision away from student loan borrowers who are living on the brink.”

The president is further punishing families and making them resent the very basics, in addition to addressing the affordability crisis that is making Americans incapable of making student loans payments.