The Trump Administration Might Take Student Loan Payments out of Your Paycheck

Since the onset of the pandemic, student loan repayment plans have been in what seems like constant flux. They've been paused, and then President Biden attempted to cancel them. Now, President Trump's Department of Education seems like it's getting ready to pursue repayment of these loans more forcefully.

According to reporting from NPR, the Department of Education is planning to resume student loan payments in early 2026 and will garnish the wages of those who are in default on their loans. Following this news, many wanted to better understand what wage garnishment is. Here's what we know.

Wage garnishment is a policy that allows the federal government to work with non-federal employers to take a portion of payments from paychecks to repay loans. In essence, then, your student loan payments will be repaid not by you, proactively, but automatically through your paycheck. You'll never see the money that is taken out to pay your loans.

This is a policy the government can pursue for any kind of loan repayment.

Although wage garnishment means that anyone whose wages are garnished will receive less in their paychecks until their loans are paid off, the Department of Education says that the number of people who will have their wages garnished will be small, at least to begin with.

"We expect the first notices to be sent to approximately 1,000 defaulted borrowers the week of January 7," a spokesperson explained.

The spokesperson did say, though, that garnishment notifications are expected to increase monthly over the course of the year.

Borrowers are in default after they have stopped paying their loans for 270 days. Once that has happened, the government can claim payment by seizing tax refunds and social security benefits, and also by working with a person's employer to withhold up to 15 percent of their pay.

According to an analysis published by the American Enterprise Institute, 5.5 million borrowers are currently in default, and another 3.7 million have not paid on their loans for more than 270 days, and 2.7 million are in the early stages of delinquency. That's more than 25 percent of all student loan borrowers, and means that the government could be working toward garnishing the wages of millions of Americans.

It's unclear, then, how the government has selected the people who will be the first to receive notifications, or how quickly they plan to ramp up the program. The Trump administration has been signalling for some time that it would be pursuing repayment of student loans more forcefully, so this doesn't exactly come as a surprise.

In the midst of an economic climate that is sending confusing signals, though, many are naturally wondering whether this will put additional strain on affordability for millions of people. Wage garnishment is an effective way to reclaim student loan debt, but it might also leave millions of people facing difficult decisions about what they can and can't afford.