Summary
The U.S. Department of Education decided to pause efforts to take money from the wages and tax refunds of people who have defaulted on federal student loans. This pause is to give these borrowers time to fix their loans and to let the department start new loan repayment changes.
Key Facts
- The Department of Education is halting wage garnishment and seizure of tax refunds for defaulted student loan borrowers.
- The pause aims to give borrowers more time to manage their loans and prepare for new loan repayment changes.
- These changes are part of a law passed under the One Big Beautiful Bill Act.
- Initially, the administration planned to start garnishing wages on January 7.
- Education Secretary Linda McMahon mentioned that confusion from the previous administration led to payment issues.
- The department has already collected about $500 million from borrowers in default.
- There is no information yet on how long the pause on wage garnishment will last.
