More than 5 million people in the United States could soon have their student debt sent to collections — and another 4 million are months behind on their payments. Combined, that’s almost 1 in 4 student loan holders across the country.
Since the Department of Education resumed sending accounts in default to collections last week, some lawmakers like U.S. Rep. Ayanna Pressley are trying to curb the hurt that can cause — like wage garnishment.
“[Garnishment] is cruel. It has a disparate impact on those families that have the greatest need for every dollar,” Pressley told Boston Public Radio on Thursday.
Wage garnishment for student loans means an employer can be required to withhold up to 15% of person’s earnings in order to pay down that debt to the federal government.
Pressley and Sens. Elizabeth Warren and Cory Booker reintroduced a bill on Wednesday that would stop garnishment as a tool for student debt collection by the federal government. The Department of Education hasn’t collected on defaulted federal student loans since the start of the pandemic in March 2020.
The Ending Administrative Wage Garnishment Act of 2025 would suspend Secretary of Education Linda McMahon’s authority to garnish wages, tax refunds, Social Security checks or other earned benefits. It would also mandate the Education Department refund improperly garnished wages within one week and pay “double damages” to borrowers whose wages are improperly garnished. It would also prohibit garnishment on loans outstanding for more than 10 years and allow borrowers to sue employers who garnish wages after a garnishment order is suspended.
The government started efforts to collect on defaulted loans starting May 5, and borrowers will receive notices about wage garnishment “later this summer,” according to the Education Department’s press release.
The Trump administration will, in some cases, also begin seizing federal benefits like Social Security from defaulted student loan borrowers.
“This is happening at a time of great economic instability and destabilization because of Donald Trump and his policies,” Pressley said. “Now he’s coming for your hard-earned benefits and your money.”
Pressley said many people may not realize that their loans are in default because of the many payment pauses since the pandemic. Default is different from forbearance or deferment. She encouraged people who have questions about their loan status to call the Student Borrower Protection Center or her congressional office.
