Sponsors
The bill strongly limits and pauses federal student loan wage garnishment and increases remedies for wrongly garnished borrowers — improving borrower protections and transparency — but it raises privacy risks, adds employer and administrative burdens, and may delay collections and increase costs to taxpayers.
Borrowers who were improperly subject to wage garnishment (especially students, young adults, and low-income people) will receive twice the wages that were withheld as a refund once the Department processes returned funds, providing direct, rapid financial relief.
Borrowers (including students, young adults, and middle-class families) are protected from ongoing garnishment while statutory safeguards are certified — and the Secretary is barred from garnishing wages on loans outstanding more than 10 years — pausing or limiting collections and reducing the risk of ongoing income loss.
States, schools, employers, and borrowers benefit from greater transparency and fewer improper withholdings because the bill creates a centralized garnishment database with regular reporting to Congress and requires employers to verify garnishment data quarterly.
Taxpayers and loan holders may face higher costs because suspending garnishment and pausing collections can delay recoveries, potentially increasing the ultimate cost of unpaid loans.
Borrowers' personal and employment information could be exposed to added privacy and data‑security risks due to the creation and maintenance of a centralized database containing detailed garnishment data.
Employers — particularly small businesses — face increased legal and financial risk because the bill imposes liability for amounts improperly withheld after notice and increases ongoing compliance burdens for verifying garnishment data.
Based on analysis of 2 sections of legislative text.
Suspends federal administrative wage garnishment for certain student loans until required safeguards are certified, creates a centralized garnishment database, adds employer verification and liability, and bars garnishment after 10 years.
Introduced May 14, 2025 by Ayanna Pressley · Last progress May 14, 2025
Suspends federal administrative wage garnishment for certain student loan borrowers from enactment until the Secretary of Education certifies completion of specific safeguards (not earlier than one year after enactment). If the Department implements the required protections, garnishment may resume under new rules; if it cannot, garnishment will not be applied. The bill also requires fast refunds for improperly garnished wages, creates a centralized garnishment database, requires employer verification and employer liability after official suspension/termination notices, mandates reporting to Congress, and prohibits garnishment for loans outstanding more than 10 years.