Trump admin to go after pensions, wages and tax returns to claw back student loan debt

[mystery-ak]

 Trump admin to go after pensions, wages and tax returns to claw back student loan debt
By Diana Glebova   
Published April 22, 2025, 3:37 p.m. ET

WASHINGTON — The Trump administration announced Tuesday that it would seize wages and go after the pensions of those who refuse to repay federal student loans they defaulted on.

“The government can and will collect default in federal student loan debt by withholding money from borrowers, tax refunds, federal pensions and even their wages,” White House press secretary Karoline Leavitt told reporters in her weekly briefing.

The Education Department had announced a day earlier it would be pursuing wages and tax refunds, but did not specifically state federal pensions would also be included.

The White House will restart the federal government’s “involuntary” collection program — that was paused under former President Joe Biden — on May 5.

The number of individuals defaulting on their student loans could reach 10 million in a few months, the Education Department said in a statement on Monday — accounting for 25% of federal loan portfolios.

All borrowers who have defaulted on their loans will receive a notice in two weeks informing them of the upcoming collection process.

“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” Secretary of Education Linda McMahon said in a statement.

“The Biden Administration misled borrowers: the executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear.

“Hundreds of billions have already been transferred to taxpayers. Going forward, the Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment — both for the sake of their own financial health and our nation’s economic outlook.”

A loan is considered in default if the borrower misses payment for 270 days, or about 9 months.

Under the Treasury Offset Program, the government has the right to withhold 100% of defaulted borrowers’ tax returns, 15% of federal salary and 15% of Social Security.

more
https://nypost.com/2025/04/22/us-news/white-house-to-go-after-pensions-wages-and-tax-returns-to-claw-back-student-loan-debt/

[rustynail]

'that was paused under former President Joe Biden',  haven't Judges Ruled that Trump may not undo Biden's actions without their expressed written permission?

[mountaineer]

I don't know why people expect (or demand) to have their student loans forgiven, when the same is not true of home loans, car loans or other debts. If you default, the lender still has a right to be paid. Pretty simple, actually.

[Smokin Joe]

I don't know why people expect (or demand) to have their student loans forgiven, when the same is not true of home loans, car loans or other debts. If you default, the lender still has a right to be paid. Pretty simple, actually.

For that matter, among other things, wages and payments are attached for things like back child support (your license gets suspended for that, too), unpaid fines, repayment of overpaid unemployment, etc.
Why not unpaid loan debt?--especially when those loans were (ostensibly) for the purpose of making more money than not going to school and getting a degree.

[mountaineer]

Yep. One of my jobs was enforcing child support orders. I garnished wages where possible. Once I sent the sheriff out to seize a guy's Corvette (he owed tens of thousands). When he saw the tow truck in his driveway, he somehow found some funds to greatly reduce his child support debt, and the car stayed with him.