US EditionWhat Is Wage Garnishment, and What Should You Do if You're Facing It?
UNITED STATES, JUL 20 – The new law limits lifetime federal student loan amounts to $257,500 for 43 million borrowers and ends many income-driven repayment plans, affecting low-income and minority borrowers most.
- In May 2025, the Education Department resumed efforts to recover unpaid student loan debts, putting millions of American borrowers at risk of having a portion of their wages garnished.
- This move comes after President Trump signed a tax bill earlier this month that implemented several modifications to the way student loans are repaid.
- TransUnion reported that about 1.8 million borrowers could default in July, with nearly one million more at risk in August; wage garnishment can withhold 15% of disposable income without court orders.
- Laura Mattia, a financial advisor, states wage garnishment often catches financially struggling borrowers off guard, and consolidation can be a practical option to regain good standing.
- The ongoing collections and evolving repayment plans suggest borrowers must act promptly, avoid paying third-party fees, and consider short-term income options to manage financial strain.
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Student loan borrowers face a new reality following the passage by Congress and former President Donald Trump of a sweeping budget reconciliation agreement earlier this month, dubbed the “big, beautiful bill.”
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Total News Sources47
Leaning Left4Leaning Right1Center38Last UpdatedBias Distribution88% Center
Bias Distribution
- 88% of the sources are Center
88% Center
C 88%
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