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wages
'Cruel, Unnecessary, and Irresponsible': Trump Admin to Resume Garnishing Wages of Student Borrowers
One group noted "the irony of a billionaire being in charge of collecting pennies from debtors."
Dec 23, 2025
The US Education Department confirmed Monday that, starting next month, it will resume seizing the pay of student loan borrowers in default as the Trump administration wages a broader war on debt relief and cancellation efforts.
The department, led by billionaire Linda McMahon—who is working to gut the agency from the inside—told the Washington Post that "it will notify about 1,000 defaulted borrowers of plans to withhold a portion of their wages to pay down their past-due debt," beginning the week of January 7, 2026.
"After that, the department said, notices will be sent to larger numbers of borrowers each month," the Post reported. "There were about 5.3 million borrowers who had not made a payment on their federal student loans for at least 360 days as of June 30, according to the latest available data from the Education Department. Many of them were in default before the federal government stopped collecting defaulted loans because of the pandemic nearly six years ago."
Persis Yu, deputy executive director and managing counsel of the advocacy group Protect Borrowers, said in a statement Tuesday that "at a time when families across the country are struggling with stagnant wages and an affordability crisis, this administration's decision to garnish wages from defaulted student loan borrowers is cruel, unnecessary, and irresponsible."
"As millions of borrowers sit on the precipice of default, this administration is using its self-inflicted limited resources to seize borrowers' wages instead of defending borrowers' right to affordable payments," said Yu. "There are still nearly a million unprocessed Income-Driven Repayment applications, and this administration has admitted to denying en masse borrowers who applied and requested the US Department of Education’s help in accessing the most affordable payment option."
“Finally, during the last Trump administration, hundreds of thousands had their wages improperly taken at the peak of the pandemic because the US Department of Education was unable to control this tool," Yu added. "It is irresponsible to turn on a debt collection tool that the administration cannot turn off."
In May, the Trump administration ended a pause on student loan repayments that had been in place since the onset of the Covid-19 pandemic in 2020.
The administration has also attacked student debt relief efforts launched under former President Joe Biden. Earlier this month, the Trump Education Department cut a deal to effectively end the Saving on a Valuable Education (SAVE) plan, jacking up monthly payments for millions of borrowers enrolled in the Biden-era program.
"While millions of student loan borrowers struggle amidst the worsening affordability crisis—as the rising costs of groceries, utilities and healthcare continue to bury families in debt—billionaire Education Secretary Linda McMahon chose to strike a backroom deal with a right-wing state attorney general and strip borrowers of the most affordable repayment plan that would help millions to stay on track with their loans while keeping a roof over their head," Yu said in a statement after the deal was announced.
"The real story here," Yu added, "is the unrelenting, right-wing push to jack up costs on working people with student debt."
"The federal government also wields vast extrajudicial powers to collect student debt, including garnishing wages and seizing Social Security payments."
The Education Department is legally allowed to withhold up to 15% of a borrower's after-tax income to pay down defaulted debt. As the Post noted, the Trump administration has already resumed seizing tax refunds and Social Security benefits student loan borrowers in default.
The Debt Collective, the first debtors' union in the US, noted "the irony of a billionaire being in charge of collecting pennies from debtors."
"The Department of Education pushes debtors toward payment to get out of default," the group added. "They don’t want you to know that you have other options. These include traditional repayment options, nonpayment options, and lesser-known options."
The Trump administration's decision to resume garnishing borrowers' wages comes as advocates are warning of a "default cliff" as borrowers struggle to afford basic necessities, leaving them unable to keep up with loan repayments. A Data for Progress survey released earlier this month found that more than 40% of borrowers report making tradeoffs between covering basic needs and staying current on student loan debt payments."
"Student loan default comes with severe and punitive consequences," Michele Zampini, associate vice president of federal policy and advocacy at the Institute for College Access and Success, wrote in a blog post earlier this month.
"In addition to ongoing credit score damage and hefty collection fees, the federal government also wields vast extrajudicial powers to collect student debt, including garnishing wages and seizing Social Security payments and tax refunds that are targeted to households with very low incomes, including the Child Tax Credit and the Earned Income Tax Credit," Zampini added. "These seizures compound financial hardship for those who can least afford it."
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As Americans Face Affordability Crisis, Two-Thirds Say Trump Policies Mainly Favor the Rich
Sen. Tammy Baldwin said that when Trump gives his economy high marks, "it is so clear that he's talking about the economy for him, his billionaire friends, his billionaire Cabinet members."
Dec 22, 2025
As Americans increasingly struggle with the cost of living, nearly two-thirds now say President Donald Trump's policies favor the wealthy over everyone else, according to poll results published Sunday.
When respondents were asked by a CBS News/YouGov poll back in March who they felt the president's policies were most geared toward, already a majority, 55%, said the wealthy were benefiting the most, while 33% said his policies benefited everyone equally. Just 1% said his policies would most benefit the poor.
Since then, Trump has imposed a series of regressive tariffs that have driven inflation up, costing the average family an extra $1,200 this year, according to an estimate by Democrats on the Joint Economic Committee in Congress.
He also passed what has often been described as the largest upward transfer of wealth in US history. After July's One Big Beautiful Bill Act, the top 1% of earners are poised to pay over $1 trillion less in taxes over the next decade.
Meanwhile, its cuts to Medicaid and Affordable Care Act health insurance subsidies are expected to result in around 15 million people losing health insurance, while roughly 4 million—including 1 million children—will see cuts to their Supplemental Nutrition Assistance Program (SNAP) benefits.
When CBS/YouGov asked the same question nine months later, the number who said Trump's policies favored the wealthy had shot up by 10 points to 65%. The number who said they'd benefit everyone equally has dropped by about the same amount, and Trump convinced no one that he was primarily looking out for the poor.
Trump's approval ratings have hit record lows in 2025, with the economy—once the area where Americans had the greatest faith in him—now serving as one of the biggest sources of backlash.
Last week, after months of delay, a Labor Department report showed that unemployment had climbed to 4.6% in November, the highest rate since 2021—nearly 50,000 manufacturing jobs, which Trump's tariffs are supposedly meant to protect, were shed between February and September. At the same time, wage growth has decelerated to 3.5% year-over-year, the department said.
Just 18% told CBS News/YouGov they felt as if they were financially better off since Trump took office, while 50% said they were worse off. Thirty-two percent said they were about the same.
When not simply pretending that the economy has improved under his watch—as he did in his primetime address last week—Trump and his allies have blamed economic sluggishness on his predecessor, former President Joe Biden.
But Americans largely do not buy this framing: 47% say Trump's policies are more responsible for the state of the US economy today, while just 22% still predominantly blame Biden, and another 22% say both are equally to blame.
Last week, Trump said his economic performance deserves an "A++++." But just 5% of voters gave him an A. Instead, 24% gave him an F, another 25% gave him a D, and 26% gave him a C.
In a post on social media, Sen. Tammy Baldwin (D-Wis.) said that when Trump gives his economy high marks, "it is so clear that he's talking about the economy for him, his billionaire friends, his billionaire Cabinet members."
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'Not a Pretty Picture,' Expert Says of Trump Economy as Job Growth Grinds to a Halt
"It seems to me like we are looking at a labor market with near-zero labor force growth and near-zero real wage growth," wrote economist Dean Baker. "This means that real labor income in the economy is essentially flat."
Nov 12, 2025
Even without the benefit of recent federal jobs data, which the Trump administration has withheld amid the government shutdown, a prominent US economist argued Wednesday that it's clear the labor market under Donald Trump's leadership is increasingly grim.
Citing private figures that have been used to fill the void left by two consecutive missed jobs reports from the federal government, Dean Baker of the Center for Economic and Policy Research argued that "we can infer" weak job growth in September and suggested Trump or his aides "likely reviewed the September data and made a decision not to release it."
More broadly, Baker wrote, the payroll firm ADP "shows average private sector job growth of just 10,000 a month for the three months from July to October. Since this excludes the government sector, which likely shed jobs over this period due to federal layoffs (even pre-shutdown), the ADP data imply essentially zero job growth over this period."
"The other part of the story is that wage growth also seems to have slowed especially for workers at the bottom end of the wage distribution," Baker added. "It looks to me like we are looking at a labor market with near-zero labor force growth and near-zero real wage growth. This means that real labor income in the economy is essentially flat."
"That is not a pretty picture from the standpoint of the bulk of the population, and it does not describe a very stable path of economic growth," he continued. "When the AI bubble bursts, things might get really ugly really fast."
Baker's assessment came as CNN reported that President Donald Trump considered "traveling the country to give economy-focused speeches" as consumer sentiment craters, tariffs drive up prices, millions face skyrocketing health insurance premiums, and people across the country reel from the administration's assault on safety net programs.
Publicly, Trump has dismissed the notion that people are struggling economically under his administration, calling polling to that effect "fake."
"The economy's the strongest it's ever been," Trump falsely declared during a recent Fox News interview.
On Tuesday, the White House was widely mocked for citing extremely limited data from the food delivery company DoorDash to proclaim that Trump's agenda is "delivering real results for American families."
They’ve laid off so many people that the government is now getting its economic data from DoorDash.
[image or embed]
— Dare Obasanjo (@carnage4life.bsky.social) Nov 11, 2025 at 8:09 PM
Economist Paul Krugman wrote in a blog post on Wednesday that Trump is beginning to face "backlash against his attempts to gaslight the public about the true state of the economy," pointing to "the blowout Democratic victories in last week’s elections" as just part of that backlash.
"Once again, these attempts aren’t about putting a positive spin on the data. They’re just flat-out lies," Krugman wrote. "And Democrats should hammer those lies as proof not just that Trump is utterly dishonest, but that he’s completely out of touch with the reality of American life."
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