U.S. President Donald Trump announces the creation of the \u201cTrump-class\u201d battleship during a statement to the media at Trump\u2019s Mar-a-Lago estate on December 22, 2025 in Palm Beach, Florida. <\/p>\n
Tasos Katopodis | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
The Trump administration will start garnishing the wages of student loan<\/a> borrowers in default in early January, a spokesperson for the U.S. Department of Education confirmed to CNBC on Tuesday. <\/p>\n It will be the first time a portion of borrowers’ paychecks has been at risk since the beginning of the Covid pandemic, when collection activity was halted. <\/p>\n Starting the week of Jan. 7, the Education Department expects around 1,000 defaulted student loan borrowers to receive notices of administrative wage garnishment, the spokesperson said. After that, the number of notified borrowers will continue to increase. <\/p>\n The U.S. government has extraordinary collection powers on federal debts, and it can seize borrowers’\u00a0federal tax refunds<\/a>,\u00a0wages<\/a>, and\u00a0Social Security retirement<\/a>\u00a0and disability benefits.<\/p>\n The Education Department can seize up to 15% of a student loan holder’s after-tax income to put toward their debt. By law, borrowers must be left with at least 30 times the federal\u00a0minimum hourly wage ($7.25) a week, which is $217.50, said higher education expert Mark Kantrowitz.<\/p>\n<\/div>\n Student loan holders have been under pressure from\u00a0a weakening labor market<\/a>, a barrage of changes to the lending system and recent trouble accessing relief programs. More than 5 million student loan borrowers are currently in default, and that total could swell to roughly 10 million borrowers soon, the Education Department said<\/a>\u00a0earlier this year.<\/p>\n More than 42 million Americans hold student loans, and the outstanding debt exceeds\u00a0$1.6 trillion<\/a>.<\/p>\n To try and avoid wage garnishment, consumer advocates say student loan borrowers should contact the government’s\u00a0Default Resolution Group<\/a>\u00a0and pursue a number of different avenues to get current on their loans, including signing up for\u00a0loan rehabilitation<\/a>. <\/p>\n<\/div>\nRead more CNBC personal finance coverage<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
![\"Trump](\"https:\/\/image.cnbcfm.com\/api\/v1\/image\/108245237-17665072591766507258-43131537177-1080pnbcnews.jpg?v=1766507259&w=750&h=422&vtcrop=y\")