Trump Administration Economic Policy

The Education Department on Jan. 16 announced it will postpone restarting Administrative Wage Garnishment and Treasury Offset collections for federal student‑loan borrowers in default, reversing a December plan that would have sent notices to about 1,000 borrowers the week of Jan. 7. Officials, including Secretary Linda McMahon, said the pause gives borrowers time to rehabilitate loans and evaluate repayment reforms from last summer’s One Big Beautiful Bill Act and new income‑based options due July 1; advocates warned resuming garnishment would have pushed millions of defaulted borrowers deeper into debt (estimates cite more than 5 million already in default and as many as 9 million at risk), while critics say the delay is costly to taxpayers, and the department says it has already collected roughly $500 million since restarting collections though it’s unclear whether any wages were actually garnished.