APPLETON (NBC 26) — Starting next month, the Trump administration will begin garnishing wages from student loan borrowers who are in default, marking the first time this collection method has been used since the COVID-19 pandemic paused such actions.
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Over 700,000 people in Wisconsin have student loans, and many are expressing concern about the upcoming change in enforcement.
"It seems harsh to recent grads considering cost of living," said Charlie Sunday, an Appleton resident who pays student loans.
Garnishing is a legal term for taking money directly from paychecks to pay debts like student loans, child support or taxes. The practice for defaulted student loans was suspended during the COVID-19 pandemic but will resume in 2026.
"It feels like garnishing paychecks is kind of rigging the system in that the government and the banks never lose because they'll just take the money from your paycheck," Sunday said.
The Education Department expects around 1,000 defaulted borrowers to receive notices starting the week of January 7. After that, the number will continue to increase.
Matthew and Hannah Siegler graduated this year facing thousands in loan payments.
"I would assume some people can't pay the loans off, so they'll be taking what's not there," Matthew Siegler said.
Under federal law, the Education Department can take up to 15% of a borrower's after-tax income to put toward their debt, but must leave at least $217 per week for living expenses.
