White House Says It Will Seize Wages For Student Loans In Collection—Here’s What Borrowers Can Expect

Forbes - Apr 22nd, 2025

The Trump administration has announced that it will resume debt collections for federal student loan borrowers who have defaulted, a move that threatens millions with potential wage garnishment, pension withholding, and loss of tax refunds. Education Secretary Linda McMahon confirmed the decision to restart collections on defaulted loans such as Federal Family Education Loans, Direct Loans, and Perkins Loans, starting May 5. The decision affects over five million borrowers already in default and four million in late-stage delinquency. The Treasury Offset Program will facilitate withholding federal payments, leading to significant financial implications for those affected.

This development comes after the Biden administration's attempts to provide debt relief were blocked by the Supreme Court, with the Trump administration reversing these efforts, emphasizing fiscal responsibility towards taxpayers. The resumption of debt collection reflects broader policy shifts under Trump, including changes to income-driven repayment plans and the Public Service Loan Forgiveness program. The decision also coincides with organizational restructuring within the Department of Education, hinting at a shift in the administration's approach to managing student financial aid and its implications for millions of borrowers across the nation.

Trump Administration Linda Mc Mahon Education Department Student Loan Debt Wage Garnishment Federal Payments Treasury Offset Program

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RATING

6.0

Moderately Fair

Read with skepticism

The article provides a timely and relevant examination of the Trump administration's decision to resume debt collections on defaulted federal student loans. It effectively highlights the policy's potential impacts on borrowers, making it a significant topic for public interest and engagement. However, the story lacks balance and transparency, as it does not present a range of perspectives or clearly cite sources. The accuracy of some claims, particularly regarding administrative changes, requires further verification. While the article is mostly clear, the complexity of the topic may challenge some readers, and the potential for controversy is high given the contentious nature of student loan policies. Overall, the story is informative and impactful but could benefit from more balanced reporting and improved source transparency.

Accuracy

The article accurately reports the Trump administration's decision to resume debt collections on defaulted federal student loans. It correctly states that millions of borrowers are impacted and details the types of loans involved, such as Federal Family Education Loans and Direct Loans. The story also accurately describes the Treasury Offset Program's role in withholding federal payments like tax refunds and federal salaries. However, some areas, such as the specific dates and procedural details, require verification. The statement about the Trump administration dismantling the Department of Education could be misleading without further evidence, as it suggests a broader scope than what may be occurring.

Balance

The article presents the administration's actions and their implications for borrowers, but it lacks a balanced perspective. It primarily focuses on the negative impacts on borrowers without providing viewpoints from administration officials or experts who might justify these actions. The story could benefit from including perspectives on the potential benefits or reasons for resuming collections, such as fiscal responsibility or reducing taxpayer burden.

Clarity

The article is generally clear and well-structured, effectively conveying the main points about the resumption of debt collections. The language is straightforward, but the story could benefit from a clearer explanation of complex processes like wage garnishment and the Treasury Offset Program. Some sections are dense with information, which might overwhelm readers unfamiliar with the topic.

Source quality

The article does not clearly cite its sources, which raises questions about the reliability of the information presented. It mentions statements from the White House and the Department of Education but doesn't provide direct quotes or references to official documents or press releases. Including more authoritative sources or direct links to official statements would enhance the credibility of the reporting.

Transparency

The article lacks transparency in terms of sourcing and the basis for some of its claims. It does not disclose how the information was obtained, such as whether it was from press releases, interviews, or insider sources. Additionally, there is no discussion of potential conflicts of interest or biases that could affect the reporting. Greater transparency would improve reader trust and understanding.