Sponsors (2)
The bill provides stronger, faster protections and remedies for borrowers harmed by improper wage garnishment and increases oversight, but it reduces some federal collection tools and shifts administrative burdens and potential costs onto employers and taxpayers.
Borrowers (especially students and low-income individuals) who had wages improperly garnished will get a prompt refund—the Secretary must pay twice the improperly garnished amount within 10 days.
Students and low-income borrowers will have wage garnishment paused for at least one year unless the Department certifies safeguards, reducing immediate income loss.
Workers harmed by continued garnishment (including students and small-business owners) gain a private right to sue employers who ignore the suspension to recover withheld wages, fees, and possibly punitive damages.
Taxpayers could face higher costs if pausing administrative wage garnishment reduces federal debt collection efficiency and delays repayments.
Small-business owners and other employers will face added administrative burden and legal liability from quarterly verification requirements and strict penalties if garnishment continues by mistake.
Taxpayers may experience budgetary and cash-flow pressure if the Department of Education must pay double improperly garnished wages within 10 days, straining agency finances.
Based on analysis of 2 sections of legislative text.
Suspends federal Administrative Wage Garnishment for student loans until certain safeguards are certified, requires a centralized database and reporting, adds borrower remedies, and bars garnishment after 10 years.
Introduced May 14, 2025 by Cory Anthony Booker · Last progress May 14, 2025
Suspends the federal Administrative Wage Garnishment (AWG) authority for federal student loans from enactment until the Education Secretary certifies that specified safeguards and capabilities are in place (certification cannot occur earlier than one year after enactment) or certifies that AWG will not be used. If the Secretary certifies implementation, the Department must create a centralized database and provide recurring reports; the bill also creates enforcement remedies for borrowers and the agency against employers who continue garnishing after a suspension and requires the Department to promptly reimburse improperly garnished amounts (double payment) and authorizes injunctive relief. The bill also prohibits garnishment for loans outstanding more than 10 years.