Bipartisan Bill Seeks to Suspend Student Loan Wage Garnishments as Collections Resume

The return of administrative wage garnishment for defaulted federal student loans has triggered significant congressional action, with bipartisan legislation introduced to suspend the controversial collection practice. As federal student loan collections resumed in May 2025 following a multi-year pause, approximately 5.5 million defaulted borrowers nationwide now face the government's authority to seize up to 15% of their disposable pay without a court order.

In response to the renewed collection efforts, legislators from both chambers introduced the Ending Administrative Garnishment Act of 2025 (S. 1764 / H.R. 3412), which seeks to immediately suspend the Secretary of Education's authority to use wage garnishment for defaulted student loans. The Department of Education's comprehensive debt collection restart also includes the interception of tax refunds and Social Security benefits, creating additional financial pressure on millions of Americans already struggling with consumer debt.

The proposed legislation not only mandates a suspension of wage garnishment but calls for substantial reforms to the collection system. Key provisions include prohibiting garnishment on loans outstanding for more than 10 years, requiring the Department of Education to refund improperly garnished wages within one week, and establishing quarterly verification processes for employers to confirm garnishment information accuracy. The bill also establishes a private right of action allowing borrowers to sue employers who improperly garnish wages after an order is suspended.

Proponents argue the current administrative wage garnishment system contains significant flaws that disproportionately harm vulnerable workers. The legislation would require the Department to pay double damages for improper seizures, providing stronger financial recourse for affected borrowers. For employers nationwide, the return of garnishment orders means increased administrative burden and compliance complexity, as they must navigate complicated withholding rules while avoiding potential legal and financial penalties for improper implementation.

The bipartisan nature of the legislative response reflects growing concern about the intersection of federal debt recovery efforts and employee financial stability. As the bill advances through congressional committees, stakeholders across the spectrum—from borrowers and consumer advocates to employers and payroll professionals—are monitoring developments that could fundamentally reshape student loan debt collection practices in the United States.