Education Department delays garnishment on defaulted student debt

The U.S. Education Department announced a pause on planned tax-refund seizures and administrative wage garnishments for loans in collection while it revises repayment regulations under the One Big Beautiful Bill Act.

The U.S. Education Department announced a delay to plans to seize tax refunds and garnish wages for student loans that are in collection. The pause will remain while the department works to revise student loan repayment regulations under the One Big Beautiful Bill Act. The department said changes aim to create clearer, more affordable repayment options and to improve how involuntary collection programs function. Advocacy groups and department officials framed the move as part of broader repayment-policy changes. Key facts: - The department announced a halt to planned Treasury offset (tax refund seizures) and administrative wage garnishment for loans in collection. - Officials said the delay will allow regulators to revise repayment rules in line with the One Big Beautiful Bill Act. - Nicholas Kent, under secretary of education, is quoted as saying the administration is committed to helping borrowers resume on-time repayment with clearer and more affordable options. - The National Consumer Protection Law Center said the pause will help former students and families and called for reforms to collection practices. - The One Big Beautiful Bill Act reduced the number of available repayment plans and allows for waiving unpaid interest for borrowers who make on-time payments. - The department said the pause also gives borrowers an opportunity to rehabilitate defaulted loans and resume normal payments as needed. Summary: The pause suspends planned tax-refund seizures and wage garnishments while repayment regulations are revised under the One Big Beautiful Bill Act. Officials described the changes as intended to improve repayment options and the functioning of collection programs. Advocacy groups welcomed the halt and called for further reforms before collection activities resume. The timeline for completing the regulatory revisions was not stated.