Govt to resume payroll deduction for defaulted student loan borrowers

The Trump administration will resume student loan wage garnishment starting January 7, ending a pause in collections since the COVID-19 pandemic.

The Education Department confirmed this week that defaulted borrowers may see the federal government withhold a portion of their paychecks to cover overdue debt.

More than 5 million people in the US are currently in default on student loans, following roughly nine months without required payments.

Under federal rules, the government can take up to 15% of a borrower’s after-tax income, but must leave them with at least 30 times the federal minimum hourly wage ($7.25).per week, which comes to $217.50.