Student Loan Wage Garnishment Plans Draw Coalition Pushback as Advocates Warn of Disproportionate Harm to Black Borrowers
Center for Responsible Lending senior fellow Charlene Crowell reports on a coalition of civil rights and consumer advocates urging the federal Education Department to halt wage garnishment plans for nearly 9 million student loan borrowers in default, citing research showing a student loan default occurred every nine seconds in 2025 and that Black borrowers are five times more likely to default than their white peers.
Citing new research from Protect Borrowers, formerly the Student Borrower Protection Center, the coalition advised Education Secretary Linda McMahon in a January 7 letter that a new student loan default occurred every nine seconds in 2025. That escalating rate is unprecedented and nearly three times as high as in 2019, the year prior to the COVID-19 pandemic.
On behalf of the nearly 9 million people now in default on their student loans, a coalition of consumer, civil rights, and education advocates is urging the federal Education Department to halt plans to begin garnishing borrowers’ wages this month. Default status means borrowers are 270 days or more behind on their payments.
Citing new research from Protect Borrowers, formerly the Student Borrower Protection Center, the coalition advised Education Secretary Linda McMahon in a Jan. 7 letter that a new student loan default occurred every nine seconds in 2025. That rate is unprecedented and nearly three times as high as in 2019, the year before the COVID-19 pandemic.
The advocates also warned that Trump administration student loan policies are disproportionately harming Black and older borrowers. Signatories to the joint letter include Protect Borrowers, the American Federation of Teachers, the Debt Collective, the NAACP, the National Education Association, the Student Debt Crisis Center, and Young Invincibles.
“Research shows that involuntary collections only exacerbate the economic challenges faced by defaulted borrowers, who are disproportionately seniors and Black borrowers,” the coalition wrote. “In fact, of the borrowers already in default, roughly a third of them are older borrowers. Black graduates are additionally five times more likely to default than their white peers.”
According to Protect Borrowers, nearly two-thirds of borrowers who defaulted during the Trump administration, more than 2.6 million people, live in states that President Donald Trump won in the 2024 election. Among the states most severely affected were Florida, Georgia, Ohio, and Texas, each of which saw 100,000 or more borrowers default last year.
“The decision to resume wage garnishment against millions of borrowers amidst a growing affordability crisis crushing working families is callous and unnecessary,” the coalition continued. “The decision also comes at a time when struggling borrowers have been forced to wait amidst a nearly 1 million application backlog to enroll in an Income-Driven Repayment plan, and as mass layoffs at the Department have made it even harder for borrowers to get help with their student loans or address issues with their servicer.”
For Derrick Johnson, president and CEO of the NAACP, the issue is fundamentally one of financial rights.
“By garnishing wages for defaulted student loan borrowers, the Trump administration will only deepen financial hardship for working families and disproportionately harm Black borrowers,” Johnson said. “Millions are already struggling with rising costs and economic uncertainty, and stripping wages will only push families further into financial crisis.”
Randi Weingarten, president of the American Federation of Teachers, echoed that concern. “This is not about borrowers’ responsibility… it’s outright hostility to the young people trying to get ahead,” she said. “The Trump administration is choosing to squeeze teachers, nurses, and others while prices are increasing and families are struggling to stay afloat, ripping away wages and tax refunds when people need them most.”
A fact sheet from the Center for Responsible Lending tracks key 2025 policy decisions and summarizes the Education Department’s actions against student loan borrowers.
In March 2025, the department cut nearly half its workforce, with the Federal Student Aid office and Office for Civil Rights among the hardest hit. With Federal Student Aid’s servicing and community outreach infrastructures dismantled, systemic errors are less likely to be caught or corrected, leaving borrowers with fewer avenues for help as major policy changes roll out.
In May 2025, the department reinstated the Treasury Offset Program, allowing the government to seize tax refunds from borrowers in default.
On Aug. 1, 2025, the Department of Education resumed interest accrual for borrowers with SAVE forbearance loans. Since 2023, the SAVE program’s unpaid interest provision has shielded borrowers from balance growth. With that protection removed, balances will now grow during forbearance and may continue rising if monthly payments do not fully cover accrued interest, adding long-term uncertainty for more than 7 million borrowers.
Beginning July 1, 2026, parents who take out new Parent PLUS loans will no longer be eligible for any income-driven repayment plan, leaving the standard repayment plan as their only option. Borrowers with existing Parent PLUS loans can preserve access to income-contingent repayment if they consolidate before the July 1 deadline.
“As safeguards are rolled back and oversight weakens, borrowers face growing balances and greater financial strain, making it urgent to press for stronger policies that preserve the promise of higher education as a pathway to opportunity,” the Center for Responsible Lending concluded.
Charlene Crowell is a senior fellow with the Center for Responsible Lending. She can be reached at Charlene.crowell@responsiblelending.org.