A student studies in the Perry-Castaneda Library at the University of Texas at Austin on February 22, 2024 in Austin, Texas.
Brandon Bell | Getty Images
When the Trump administration first announced in April that it would soon resume student loan collection efforts, it said notices for wage garnishment would resume “later this summer.” It’s still a time frame the Education Department has cited in comments, as recently as earlier this month.
But with Labor Day coming up, it has yet to reveal a specific date.
The department did not respond to a request for comment on the timeline of wage garnishments.
“Getting these programs set back up takes time,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers. “I would expect at least a month or more” before garnishment begins, he said.
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Collection activity on federal student loans has been mostly paused for around five years, since the start of the Covid pandemic in 2020. It’s a significant change for borrowers to have their paychecks at risk again, consumer advocates say.
As of a May announcement, more than 5.3 million student loan borrowers are in default.
“I would strongly advise borrowers to not wait to take action until wage garnishment begins,” Buchanan said.
Here’s what to know about protecting your wages if you’re behind on your student loans.
Federal government can take up to 15%
The U.S. Department of Education can garnish up to 15% of your disposable, or after-tax, pay, said higher education expert Mark Kantrowitz.
By law, you must be left with at least 30 times the federal minimum hourly wage ($7.25) a week, which is $217.50, Kantrowitz said.
It is more difficult for the federal government to garnish the wages of someone who receives 1099 income, Kantrowitz said.
“If there is no employer, wage garnishment can’t happen,” he said.
You can challenge the garnishment
Borrowers in default should receive a 30-day notice before their wages are garnished, experts said.
During that period, you should have the option to have a hearing before an administrative law judge, Kantrowitz said. The Education Department notice is supposed to include information on how you request that, he said.
Your wages may be protected if you’ve recently been unemployed or filed for bankruptcy, Kantrowitz said.
Borrowers can also challenge the wage garnishment if it will result in financial hardship, he added.
Your employer can’t terminate you
Most employers will already be familiar with the wage garnishment process, Kantrowitz said. In addition to student loans, companies can also be asked to withhold a portion of their employees’ wages for child support, alimony and unpaid taxes.
Your boss is not allowed to terminate you because of the wage garnishment, Kantrowitz said.
Now is the time to get out of default
You can contact the government’s Default Resolution Group and pursue a number of different avenues to get current on your loans, including enrolling in an income-driven repayment plan or signing up for loan rehabilitation.
“Once garnishment begins there will be a flood of calls, and processing times for rehabilitations could be much longer depending on volume,” Buchanan said. “Use the next month or so to call the Default Resolution Group and discuss your options to avert garnishment.”