US EditionEducation Department to delay collections on defaulted student loans
The pause affects over 5 million defaulted federal student loan borrowers nationwide, giving them more time to consolidate or rehabilitate loans while new repayment reforms are finalized.
- On Friday, the U.S. Department of Education delayed involuntary collections including Administrative Wage Garnishment and the Treasury Offset Program to finalize new repayment plans.
- The Department is pausing collections to implement changes from the Working Families Tax Cuts Act, which simplifies repayment options and adds a second chance to rehabilitate a defaulted loan.
- Earlier this month the Department began sending wage-garnishment notices to some borrowers, with about 1,000 notices sent that could deduct up to 15% of a borrower’s paycheck.
- By pausing collections the Department still allows credit reporting of defaults to continue, and officials warned borrowers’ credit scores may be harmed without a new timeline for collections.
- A new income-driven repayment option launching July 1, 2026, will waive unpaid interest for on-time payments and include small matching payments from the Department.
129 Articles
129 Articles
Trump administration delays wage garnishment plan for student loan borrowers in default
The Trump administration is delaying its plans to withhold pay from student loan borrowers who default on their payments, backing off a measure that threatened to deliver a financial blow to millions of Americans.
Trump admin backs off wage seizures for defaulted student loans after fierce backlash
Billionaire US Education Secretary Linda McMahon has temporarily suspended the Trump administration’s plan to resume garnishing the wages of defaulted student loan borrowers, a reversal that came after advocates warned the pay seizures would have had devastating economic consequences for people acro...
Trump admin delays plan to withhold wages for student loan borrowers in default
The Trump administration is delaying its plans to withhold pay from student loan borrowers who default on their payments, backing off a measure that threatened to deliver a financial blow to millions of Americans. The Education Department announced Friday involuntary collections on federal student loans will remain on hold as the agency finalizes new repayment plans. The shift reverses course on earlier plans to restart wage garnishments this mo…
US Education Department delays plan to garnish wages of student borrowers in default • Washington State Standard
U.S. Education Secretary Linda McMahon takes in a selection of grade school students’ patriotic artworks and high schoolers’ recent output in a special installation set up at Exeter-West Greenwich Regional Junior High and High School in Rhode Island on Monday, Jan. 12, 2026. (Photo by Alexander Castro/Rhode Island Current)WASHINGTON — The U.S. Department of Education, for now, is backtracking on plans to garnish wages and seize tax refunds of st…
Trump Admin Pauses Tax Refund Seizures, Wage Garnishments for Defaulted Student Loans - The Thinking Conservative News
The U.S. Department of Education will suspend, for now, tax refund seizures and wage garnishments for people in default on their federal student loans. The post Trump Admin Pauses Tax Refund Seizures, Wage Garnishments for Defaulted Student Loans appeared first on The Thinking Conservative News.
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