Just as many Americans are trying to get back on their feet after years of economic turbulence, a fresh wave of financial stress is on the horizon—this time, for more than 5 million people with defaulted student loans.
If you’re one of them, there’s a good chance your wages could be garnished starting in May to repay your overdue debts.
The End of the Pandemic-Era Grace
Back in March 2020, as the world shut down due to COVID-19, the federal government hit pause on student loan collections—even for those who had already defaulted.
The idea was to give folks some breathing room during an unprecedented crisis.
That pause continued through the Biden administration, which also pushed for sweeping loan forgiveness plans.
But much of that was eventually blocked by the courts.
Now, under the Trump administration, the Department of Education is putting an end to that leniency.
Secretary of Education Linda McMahon made it crystal clear: mass loan forgiveness is off the table.
Instead, the department is shifting gears and resuming aggressive debt collection.
Garnishments and Government Offsets Are Back
Beginning May 5, the Department of Education will restart involuntary collections.
This includes wage garnishments, as well as seizing tax refunds and federal benefits through the Treasury’s offset program.
If you’re in default, you’ll likely get an email soon outlining your repayment options.
But after a 30-day notice period, wage garnishment may kick in automatically if action isn’t taken.
Who’s Affected—and Who Might Be Next
Currently, 5.3 million Americans are already in default.
But the numbers could climb fast—another 4 million borrowers are just weeks or months away from defaulting, having missed payments for 91 to 180 days.
If that happens, nearly one-quarter of the federal student loan portfolio will be in default status.
And it’s not just about your credit score anymore.
Once you’re in default, collections can get real—and painful—real fast.
A Shift in Policy and Philosophy
While President Biden managed to cancel over $183 billion in student debt through targeted forgiveness programs, his broader effort to wipe out loans on a larger scale was stopped by the Supreme Court.
Secretary McMahon criticized those initiatives, saying the department is now focused on following the law and ensuring borrowers return to repayment—not relying on blanket relief.
“American taxpayers,” she stated, “will no longer be forced to serve as collateral for irresponsible student loan policies.”
Confusion and Criticism from Borrower Advocates
With so many shifts between administrations, many borrowers are feeling overwhelmed and uncertain about what to expect next.
Advocates for student borrowers say this move is harsh and poorly timed, especially as families continue to grapple with rising living costs.
“This is cruel, unnecessary, and will further fan the flames of economic chaos for working families,” said Mike Pierce of the Student Borrower Protection Center.
What Now?
If you’re currently in default or nearing it, this is the time to act.
Reach out to your loan servicer, explore repayment or consolidation options, and avoid waiting until garnishment notices show up at work.
While the political winds may shift again in the future, for now, collections are back—and they’re serious.