A bill has been introduced in the Senate that would prohibit the garnishment of wages, tax returns, and Social Security checks as a tool to recover unpaid federal student loans.
📜 The big picture: The Ending Administrative Garnishment Act of 2025, introduced by Senators Cory Booker [D-N.J.] and Elizabeth Warren [D-Mass.] and Rep. Ayanna Pressley [D-Mass.], would suspend the Secretary of Education’s authority under the Higher Education Act of 1965 to collect on defaulted student loans through administrative wage garnishment.
🧾 Why it matters: Roughly 5.5 million Americans are in default on their federal student loans. The Department of Education resumed garnishment collections on May 5, after a five-year pause. Supporters of the bill say that restarting these collections, especially without safeguards or borrower support systems in place, will financially devastate vulnerable households.
🔍 Key provisions of the bill:
- Suspends garnishment powers until the Department of Education can certify to Congress that a system is in place to:
- Refund improperly garnished wages within one week.
- Suspend garnishment activities independently and at will.
- Receive quarterly verification from employers to confirm garnishment accuracy.
- Prohibits garnishment for loans that are more than 10 years old.
- Creates a right of action for borrowers to sue employers who continue garnishment after receiving a suspension or revocation notice.
- Requires double damages to be paid by the Department to borrowers whose wages were improperly garnished.
- Mandates a centralized database tracking demographics and employer data related to garnished borrowers.
📢 What they’re saying: “Wage garnishment allows the government to instruct employers to withhold up to 15 percent of an individual’s hard-earned wages, as well as intercept tax refunds, and seize Social Security benefits in order to collect student loan debt,” said Sen. Booker. “If resumed, this harmful practice will hurt millions of Americans already struggling to make ends meet while paying off their student loans. This legislation will put an end to the Trump’s administration’s attempt to punish vulnerable student loan borrowers.”
🧠 Between the lines: Critics say the Department’s current infrastructure is ill-equipped to handle a return to aggressive collections, especially after widespread layoffs and mounting borrower confusion around repayment plans.
