The Department of Education’s latest measure follows months of reforms and crackdowns in the federal student loan program.
Starting next month, borrowers who didn’t honor the conditions of federally backed student loans should notice smaller paychecks, a Department of Education senior official said on Dec. 23.
Notices of wage garnishment will be sent to about 1,000 defaulted borrowers the week of Jan. 7, and the number of notices is expected “to increase in scale on a month-to-month basis,” the senior official said in an email to The Epoch Times.
Pay garnishment for student loans was initially paused in early 2020 as part of COVID-19 relief measures and extended multiple times over the years.
After student and parent borrowers are provided sufficient notice and opportunities to repay their loans, collection activities are required under the Higher Education Act of 1965 and the Debt Collection Improvement Act of 1996.
The Federal Student Aid web page says student loans typically go into default if a payment hasn’t been made in 270 days. Under federal law, loan holders can order employers to withhold 15 percent of the borrower’s pay without taking them to court until the loan is paid back.
Those who receive garnishment notices have the right to a formal hearing or the chance to negotiate other terms with the Department of Education, according to the web page.
President Donald Trump has overhauled the federal student loan policies of his predecessor, President Joe Biden, who attempted to forgive hundreds of billions of dollars in delinquent debt to more than 5 million student borrowers.
A federal court ruled in February that Biden’s massive loan cancellation plan, which was not passed with congressional approval, was unconstitutional.
Trump has also capped student loan programs that previously allowed parents and students to borrow unlimited amounts.
All told, the debt of 43 million federal student loan borrowers totals $1.62 trillion.
Earlier this month, Education Secretary Linda McMahon announced that her agency this year has prevented more than $1 billion in student aid from occurring through controls like mandatory identity verifications for certain first-time loan applicants.
Her investigation determined that money had previously been dispersed to deceased individuals and chatbots disguised as student applicants. An identity verification measure was implemented in June. Within the first week, the federal agency identified almost 150,000 suspect identities and stopped money from being dispersed.
McMahon said there will be additional crackdowns on student aid fraud in 2026.
“American citizens have to present an ID to purchase a ticket to travel or to rent a car—it’s only right that they should present an ID to access tens of thousands of taxpayer dollars to fund their education,” McMahon said in a Dec. 11 news release.
“Merry Christmas, taxpayers,” she added.
