\t\t\t\t\tOverview:<\/p>\n
A coalition of consumer, civil rights, and education organizations is urging the US Department of Education to halt plans to begin garnishing wages of student loan borrowers in default, citing research showing that default rates are rising rapidly and disproportionately affecting Black and older borrowers. The coalition also criticized the Trump administration’s student loan policies, which they say have exacerbated the economic challenges faced by defaulted borrowers, and called for stronger policies to preserve higher education as a pathway to opportunity.<\/p>\n
On behalf of the nearly 9 million people who are now in default on their student loans, a coalition of advocates from consumer, civil rights, and education organizations is appealing to the federal Education Department to halt its plans to begin garnishing borrowers\u2019 wages this month. Default status connotes borrowers are 270 days or more behind on their payments.<\/p>\n
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 is nearly three times worse than in 2019, the year prior to the COVID-19 pandemic.<\/p>\n
Further, according to the advocates, the Trump administration\u2019s student loan policies are disproportionately harming Black and older borrowers. Signing the joint letter of appeal were:\u00a0\u00a0 Protect Borrowers, American Federation of Teachers,\u00a0the Debt Collective, NAACP, National Education Association,\u00a0the Student Debt Crisis Center, and Young Invincibles.<\/p>\n
\u201cResearch shows that involuntary collections only exacerbate the economic challenges faced by defaulted borrowers, who are disproportionately seniors and Black borrowers,\u201d wrote the coalition. \u201cIn 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.\u201d<\/p>\n
Additionally, and according to Protect Borrowers, nearly two-thirds of the borrowers who defaulted during the Trump Administration\u2014more than 2.6 million people\u2014live in states that President 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.<\/p>\n
\u201cThe decision to resume wage garnishment against millions of borrowers amidst a growing affordability crisis crushing working families is calloused and unnecessary,\u201d continued the coalition. \u201cThe 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 (IDR) plan, and as mass layoffs at the Department have made it even harder for borrowers to get help with their student loans or if they are experiencing issues with their student loan servicer.\u201d<\/p>\n
For Derrick Johnson, President and CEO of the NAACP, the nation\u2019s oldest civil rights organization, the Trump administration\u2019s policies are about financial rights.<\/p>\n
\u201cBy garnishing wages for defaulted student loan borrowers, the Trump Administration will only deepen financial hardship for working families and disproportionately harm Black borrowers,\u201d said Johnson. \u201cMillions are already struggling with rising costs and economic uncertainty, and stripping wages will only push families further into financial crisis.\u201d<\/p>\n
Randi Weingarten, President of the American Federation of Teachers, agreed with Johnson: \u201cThis is not about borrowers\u2019 responsibility; it\u2019s outright hostility to the young people trying to get ahead. 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.\u201d<\/p>\n
A\u00a0fact sheet\u00a0developed by the Center for Responsible Lending tracks key 2025 policy decisions that summarize the Education Department\u2019s actions taken against student loan borrowers. These include:<\/p>\n
Beginning July 1, 2026, parents who take out new Parent PLUS loans will no longer be eligible for any income-driven repayment plan. That means no access to income-contingent repayment (ICR) or repayment assistance plan (RAP) \u00a0leaving the standard repayment plan as their only choice. Borrowers with existing Parent PLUS loans can preserve access to ICR if they consolidate their loans before the July 1, 2026, deadline.<\/p>\n
\u201cAs 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,\u201d concluded CRL.<\/p>\n