Coalition Calls for Halt to Wage Garnishment on Defaulted Student Loans

January 27, 2026

A coalition of consumer, civil rights, and education organizations has urged the federal Education Department to stop plans to garnish wages of the nearly 9 million Americans currently in default on their student loans. New research reveals that student loan defaults are occurring at an alarming rate of one every nine seconds in 2025, representing nearly triple the default rate from 2019 before the pandemic. The crisis disproportionately impacts Black borrowers, who are five times more likely to default than white borrowers, and senior citizens, who comprise roughly one-third of those in default.

Who is affected

Nearly 9 million people in default on student loans (270+ days behind on payments)
Black borrowers (five times more likely to default than white peers)
Older/senior borrowers (approximately one-third of defaulted borrowers)
More than 2.6 million borrowers in Trump-won states who defaulted during the Trump Administration
Borrowers in Florida, Georgia, Ohio, and Texas (each with 100,000+ defaults last year)
Teachers and nurses specifically mentioned as affected professions
Parents with Parent PLUS loans
Nearly 1 million borrowers waiting in the Income-Driven Repayment plan application backlog

What action is being taken

The federal Education Department is planning to begin garnishing borrower wages this month
A coalition of seven organizations (Protect Borrowers, American Federation of Teachers, Debt Collective, NAACP, National Education Association, Student Debt Crisis Center, and Young Invincibles) sent a January 7 letter to Education Secretary Linda McMahon appealing to halt wage garnishment plans
Mass layoffs at the Department are occurring

Why it matters

This matters because the unprecedented rate of student loan defaults—one every nine seconds in 2025—represents a financial crisis that will be significantly worsened by wage garnishment for struggling borrowers. The issue has profound civil rights implications, as it disproportionately harms Black borrowers and seniors who are already facing economic challenges. Wage garnishment will deepen financial hardship for working families during a period of rising costs and economic uncertainty, effectively stripping away income when people need it most. The crisis threatens to undermine higher education as a pathway to opportunity and financial mobility, particularly for communities of color.

What's next

Beginning July 1, 2026, parents who take out new Parent PLUS loans will no longer be eligible for any income-driven repayment plan (including income-contingent repayment or repayment assistance plan), leaving only the standard repayment plan available. Borrowers with existing Parent PLUS loans can preserve access to income-contingent repayment if they consolidate their loans before the July 1, 2026, deadline.

Read full article from source: The San Diego Voice & Viewpoint