Trump administration delays student loan wage garnishment amid Georgia lawsuit

After a threat at the end of 2025 to start garnishing wages, the Trump administration reversed course Friday announcing a delay in the procedure.

President Donald Trump’s administration said in December that it was planning on garnishing wages of default borrowers near the start of 2026. However, the U.S. Department of Education released a statement Friday announcing a delay in the implementation of garnishing wages to give borrowers more time to repay their loans.

A class-action lawsuit was filed in Georgia in late 2025 that alleges the Department of Education’s incompetence and “willful negligence” has led to the potential financial ruin of student loan borrowers.

The complaint estimates that the department’s alleged misconduct could cost borrowers up to $2 trillion in damages by April.

Devlin Cooper, the attorney litigating the case, said in a video statement that around 20 million individuals in America will be held improperly in default by the department by April.

Wayne Johnson, the financier of the case and former head of the Student Loan Program in President Donald Trump’s first term, said in the video that the department failed to prepare itself to restart payments for borrowers and that borrowers have been unable to contact the department to fix the issues, resulting in default.

“We’re hard-pressed to understand how if a borrower is trying to get themselves into repayment status and their creditor is failing to meet the responsibility of operationally enabling that, how the reporting of any delinquency associated thereto could be considered to be fair.,” Johnson said. “Very frankly, the Department of Education knows full well that it is failing miserably on its servicing obligations. Each of the servicers who the department keeps referring potential borrowers to are failing and have failed miserably.”

Georgia has a total of 1.7 million borrowers, with the country having 43 million borrowers, according to the Atlanta Journal-Constitution. After the end of the COVID-era pause on student loan payments, many borrowers struggled to start making payments.

“This legal action…is all about bringing the federal government and the credit bureaus held to be accountable for their unfair and, again, what the attorneys will determine, illegal activities,” Johnson said.