Student loan borrowers brace for wage garnishment: ‘Money is tight when you’re a teacher’

US Secretary of Education Linda McMahon was present at the International Women of Courage Awards Ceremony at the State Department in Washington, DC, on April 1, 2025.

Jason Collier, a special education teacher in Virginia, often finds himself waiting until payday to refuel his car’s gas tank, hoping not to run out of gas. Collier, 46, mentioned that finances are tight for teachers. He fears that the US Department of Education might soon withhold up to 15% of his wages due to overdue student debt payments. Balancing expenses from raising two children and medical bills following a cancer diagnosis has made it challenging for him to meet his monthly student loan obligations for years.

Following a pause of five years on the collection of federal student loans, the Trump administration announced on April 21 that it would resume seizing tax refunds, paychecks, and Social Security benefits of defaulted borrowers. The Education Department reported that over 5 million borrowers are currently in default, with estimates suggesting this number could double to around 10 million borrowers within a few months. In contrast to the relief measures implemented by the Biden administration to aid struggling borrowers during the Covid pandemic, the Trump administration’s aggressive collection actions mark a significant departure from that approach.

With more than 42 million Americans carrying student loans totaling over $1.6 trillion, the Education Department has the authority to withhold up to 15% of disposable income and federal benefits, including tax refunds, from defaulted borrowers. Nancy Nierman from the Education Debt Consumer Assistance Program in New York highlighted that this withholding could create challenges for individuals in meeting essential expenses, potentially forcing them to make difficult financial choices.

Marceline Paul, a retiree reliant on a monthly Social Security benefit, expressed concern about potential garnishment by the Trump administration, which would hinder her plans to visit her home country of Trinidad. Amidst a tight retirement budget, the offset would compel her to cut back on daily expenses, forego home repairs, and abandon travel plans. She emphasized her belief in being entitled to retirement benefits after contributing to the system over the years.

After a period of suspension in loan collection activities by the Education Department, significant changes and disruptions have occurred in the lending system. Borrowers who enrolled in the Biden administration’s repayment plan, SAVE, faced uncertainties after legal challenges blocked the program. The reduction in department staff has led to delays for borrowers seeking guidance on their debt, despite efforts by the Trump administration to assist them.

Kia Brown, a management analyst at the Department of Veterans Affairs, encountered difficulties in repaying her student loans due to a lack of clarity and conflicting information from loan servicers. Uncertain about her repayment options, Brown expressed concerns about the challenges faced by borrowers in navigating the loan repayment process. She underscored the need for clearer guidance and support to ensure borrowers can manage their obligations effectively.