In a recent announcement, the Trump administration revealed plans to begin wage garnishment for student loan borrowers in default. Starting the week of January 7th, the Department of Education will notify approximately 1,000 defaulted borrowers, with the number of notifications expected to grow. The government has the authority to seize up to 15% of a borrower’s after-tax income, ensuring borrowers retain at least $217.50 weekly, as per legal requirements.
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The Trump administration’s resumption of student loan collections has resulted in the garnishment of Social Security benefits for over 450,000 defaulted borrowers aged 62 and older, beginning as early as June. While up to 15% of benefits may be offset, leaving a minimum of $750, borrowers can challenge garnishments by proving financial hardship or pursuing loan discharge options, such as a Total and Permanent Disability discharge. Alternative solutions include getting current on loans through income-driven repayment plans or utilizing available resources to supplement income. The 15% cap applies to all Social Security benefits, including retirement and disability payments.
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John Q. Hosedrinker